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How Gamification in Retail Increases Customer Loyalty

Incorporating games in your Marketing mix might sound childish at first but major enterprises rely on gamification for increased engagement and long-term loyalty incentives. Marketers are talking about gamification more and more. But what it is exactly and how it can help you as a retailer? According to the Oxford dictionary, Gamification is “the application of typical elements of game playing (e.g. point scoring, competition with others, rules of play) to other areas of activity, typically as an online marketing technique to encourage engagement with a product or service.”

Participating in games is, after all, a positive experience, and encouraging potential customers to suspender time engaging with your brand in a casual online environment might result in a long-lasting relationship. According to the Harvard Business Review, it rises customer attention by 5% generating a 25%-95% increase in profit. Use game mechanics in loyalty programs to achieve company goals, and to increase customer retention and brand engagement.

Usually, the retail and consumer products industry leads the gamification initiatives and sets the standards for the others. Digital e-commerce and physical retail could both benefit from the implementation of a gamification solution. Not only the pandemic but the world before that showed that successful consumer products companies rely heavily on information technologies like online-to-physical sales cross-over systems, white-label platforms for building custom loyalty solutions, customizable platforms that enable retailers to identify and segment customer categories, preferences and anticipate behavior as well as digital gamification experiences.

Gamification techniques – the main motivational drivers for customer action

To affect customer behavior thru gamification implementation you need to be aware of the main ingredients that are usually part of the winning strategy:

  1. Rewards – who is not getting excited when hearing this word? Everybody loves to be rewarded but in real life, a few get the chance to hold a trophy in their hands. This is why when designing a rewards system – it is a good idea to incorporate small rewards on every level so customers don’t feel discouraged. Competitiveness is part of human nature and therefore gamification-powered technologies stimulate the genuine desire in customers to partake in them. Rewards are the main reason that motivates people to try gamified experiences. Examples of rewards: badges, points, levels, special discounts, account credits, gifts, free shipping, free samples, being the first to try it, etc.

  2. Progress bar – this progress indicator triggers the human brain to complete the given task and simultaneously keeps the customer engaged in the process of coming to the 100% point. By reaching the goal humans get a dopamine rush and associate its positive feeling with the brand.

  3. Challenges – customized action plan where the company could direct the narrative to encourage customers to act when the company wants them to.

  4. In-game currency – The virtual currency is an added layer in the gamification applications that have a significant role in encouraging its users to cash them out for real-world money or rewards.

  5. AI and customer support – recognizing patterns in customer behavior can help with AI learning path planning and will increase the benefit that retailers have in capitalizing on users’ engagement.

Gamification strategies

Purchase driver – This short promotional form is a great way to launch and test different offerings and it also drives short-term behavior changes (ex. product awareness and trial, purchase frequency for a period, etc.) The gamification strategy enables brands to receive immediate consumer feedback to help them improve their product, services, and future offerings. This type of gamification promotion is suitable for medium-to-high purchase frequency companies with a wide range of product lines.

Lifestyle engagement – the long-term game for low purchase frequency brands that usually have products/services with hefty price tags and heavy shopping baskets. Enterprises must carefully approach this method because it needs a deeper understanding of customers' intent, an in-depth look into the goals that they want to achieve by purchasing a product, and what sparked the passion that lead potential customers to initiate a purchase. Whatever is the answer to why a customer is buying your product, you need to build your gamification strategy around those answers. Gamification can be leveraged to draw the connection between individual goals and passions and long-term brand purchases.

Should you invest in gamification?

It could be as easy as hosting a one-day in-store game with discount codes as rewards or it could be as tedious as building a game around your brand benefits. Whatever goal you want to achieve you need to keep in mind the main gamification techniques and implement them in your next marketing promotion strategy. Creating a sense of excitement in your brand via the human obsession with winning a prize inevitably leads to more impressions and increased brand awareness. Because a gamification experience has a huge positive impact on the company's brand awareness – we think that it is worth a try.


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