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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 relay on gamification for increased engagement and long-term loyalty incentives. Marketers are more and more talking about gamification. But what it is exactly and how it can help you as a retailer? According to 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 by encouraging potential customers to spent more time engaging with your brand in casual online environment it might result in a long-lasting relationship. According to the Harvard Business Review, rise of customer attention by 5% generates a 25%-95% increase in profit. Use game mechanics in loyalty programs in order to achieve company goals, to increase customer retention and brand engagement.

Usually the retail and consumer products industry lead the gamification initiatives and sets the standards for the others. Digital e-commerce and physical retail could both benefit the implementation of a gamification solution. Not only the pandemic but the world before that showed that successful consumer products companies relay on 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

In order 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 change 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, free gifts, free shipping, free samples, be 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 out the goal humans get a dopamine rush and associates its positive feeling with the brand.

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

  4. In-game currency – The virtual currency is an added layer in the gamification applications that has 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 promotions is suitable for medium-to-high purchase frequencies 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 their goals that they want to achieve with purchasing a product and what sparked the passion that lead potential customers to initiate a purchase. Whatever it 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 of winning a prize inevitably leads to more impressions and increased brand awareness. Considering the fact that a gamification experience has a huge positive impact on the companies brand awareness – we think that it is worth a try.