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Why loyalty programmes remain relevant in retail

By ANDREW WEINBERG, CEO of Retail Engage and 2019 Entrepreneur of the Year winner

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The first commercial loyalty programme appeared as early as the 18th century, with some US merchants starting by giving their customers copper tokens to redeem future purchases. This type of loyalty programme became more popular during the early to middle 19th century, with the concept really taking off with shopkeepers. Since then, loyalty programmes have become commonplace and have even been incorporated into multiple sectors as a means of trying to drive sales and encourage brand loyalty by consumers. 

After all these years though, are loyalty programmes still relevant and effective in the retail sector? 

In short – yes. However, the mechanics and channels of how loyalty programmes are run and who they even target has most certainly changed over recent years. In the retail landscape specifically, a number of external factors and developments have transformed this landscape. Some of these factors include the increased access to information via cellular phones, as well as the overall major advancements in technology to capture and mine data. Not only have marketeers seen a shift in consumer behaviour and buying patterns within the retail space, but even the focus of efforts by retailers and brands of who they should be targeting to see growth in a depressed economy has changed. 

54% of the South African population falls between LSMs 3 – 6, with there being an estimated 13-million shoppers in the independent and informal retail sector. These consumers are not traditional, bottom-end or emerging, they make up the ‘main’ market of South Africa. Previously it was the higher LSMs of eight to ten bracket that was targeted by brands through loyalty programmes and other advertising and marketing touchpoints, with 70% of spend being focused on this elite and yet smaller audience. South Africa’s main market (commonly also referred to as the ‘mass market’) didn’t even feature with over 81% of households not being proactively engaged with. Fortunately, in recent years we have seen first-hand how this approach and strategies by brands has changed through the introduction of loyalty programmes like bonsella, that successfully targets 10 million shoppers and consumers in the independent ‘main market’ sector in South Africa. 

To connect with this audience effectively by meeting the needs of the consumers to want to participate and engage with loyalty programmes, while still providing retailers and brands with access to valuable consumer insights critical to brand decision making and driving market share and sales – technology has proven to be key. 

A report authored by Jan Stryiak and Mayuran Sivakumaran, released by GSMA Intelligence earlier this year, revealed that at the end of 2018, 5.1-billion people around the world subscribed to mobile services, which accounts for 67% of the global population. Furthermore, the report revealed that of the 710-million people expected to subscribe to mobile services for the first time over the next seven years, half will come from the Asia Pacific region and just under a quarter will come from Sub-Saharan Africa. This mobile growth trend is not a new one and it’s this insight of the continual growth of consumers accessing and utilising their mobile phones on a daily basis that shaped bonsella as the leading digital platform for brands and retailers to reward customers in the main market. 

With the development of bonsella we focused on the currency of what the main market receives or redeems through this type of loyalty programme, which traditionally is deemed different to what resonated with consumers in higher LSMs. Every cent matters to the main market so we knew our loyalty programme needed to meet the consumers’ needs of doing their regular shopping while saving money on their monthly airtime spend. 

We have found great success in rewarding shoppers with instant airtime to their mobile phones for products on promotion in-store. We have seen participating stores realise increased sales revenue and increases in average basket size and foot traffic, while brands achieve a significant increase in product sales per campaign.

For the retailer, the benefits among others are access to a multi-million shopper loyalty programme, increased purchase value and turnover, the ability to communicate with their shopper base and dynamic reporting and analysis. bonsella is active in over 150 stores across South Africa, with over 1,2-million registered members to date. We recently launched a paid tier programme called bonsella Gold in SA, offering communities an array of services and discounts they would not normally be able to access in exchange for a minimum monthly investment. Our intention, through our parent company 2Engage, that currently operates in 14 African countries, is to launch bonsella into countries like Nigeria, Uganda, Zimbabwe and Malawi, as well as investigate further expansion into other emerging markets in South America and Asia.

So not only do I believe that loyalty programmes still have an important role in helping brands realise growth in market share and sales under conditions of severe economic pressure. But we are putting our money where our mouth is that loyalty programmes that deliver instant rewards to consumers and leverage on the developments of technology are the solution to bringing value, experience, trust and connection between brands, retailers and consumers in the main market space. Not just across Africa, but globally.

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TikTok takes on COVID-19

The fastest growing social media platform in the world has also become an epicenter of public education about the coronavirus, attracting more than 30-billion views, writes ARTHUR GOLDSTUCK

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The young have been getting a bad rap for wanting to party on while COVID-19 sends the world into lockdown. But a different movie is playing itself out on the social platform that is growing fastest among teenagers: TikTok.

Awareness campaigns by TikTok itself, collaboration with the International Red Cross, and spontaneous videos made by TikTok creators have combined into a barrage of information, education, awareness and social consciousness around the coronavirus.

Both globally and in South Africa, TikTok’s COVID-19 campaigns have gone viral.

The local #HayiCorona challenge, designed to remind people not to touch their face and wash hands regularly, has passed 1.5-million views. The TikTok collaboration with the International Red Cross, the #WashingHands challenge, has passed 12.6-million views.

One of the best-known participants in these challenges is the past year’s icon of South African talent, the Ndlovu Youth Choir, took up the global challenge with a 20-second hand-washing video. It put together a performance that brings tremendous energy to what can be a clichéd message, and ends with a punt for the Department of Health’s WhatsApp information service. The video can be viewed below.

@ndlovuyouthchoir

Our community has limited access to running water. Follow these instructions on how to safely wash your hands using a bucket. ##coronavirus##washinghands

♬ original sound – ndlovuyouthchoir

“On a global scale, TikTok also partnered with the World Health Organization (WHO) to ensure that, while creators are still having fun and expressing themselves on the platform, they stay informed with COVID-19 information coming from a reliable source,” a TikTok spokesperson told us. “Through the partnership, the WHO has created an informational page on TikTok that offers information to curb the spread of the coronavirus as well as dispelling myths.”

The page can be viewed at https://vm.tiktok.com/GHTEGf

TikTok has hosted a number of livestreams with WHO experts, attracting users from more than 70 countries, tuning in for live question and answer sessions. It has also introduced labels on coronavirus-related videos, to point users to trusted information. Resources are also offered directly in the app and in a dedicated COVID-19 section of TikTok’s Safety Center, at https://www.tiktok.com/safety/resources/covid-19.

If users simply want to explore videos on the topic, they can search via the #coronavirus hashtag, or click on https://vm.tiktok.com/swKbn4. The hashtag has had an astonishing 33.8-billion views, indicating the scale of activity and interest around the topic on the platform.

Read more on the next page about how South Africans have embraced the campaign.

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On World Backup Day: backup, backup, backup

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It was World Backup Day yesterday, 31 March, at a time when business continuity is threatened as never before. That makes calls for protecting email and defending against ransomware all the more urgent.

The global coronavirus pandemic has brought into stark relief many organisations’ lack of business continuity plans and policies. With more than two billion people around the globe in forced lockdown in wide-ranging government efforts to stem the tide of infections, an unprecedented number of employees are working remotely.

This interruption to the normal way of work is precisely what an effective and resilient business continuity strategy should plan for, says Heino Gevers, cybersecurity specialist at Mimecast

“Companies need uninterrupted access to critical business applications during times of disruption, including safe and secure web and email access for workers that are now operating outside the normal perimeters of the organisation,” he says. “In addition, comprehensive backup and archiving solutions should be ready to restore access to critical business applications should there be any unplanned downtime to ensure continuity until the crisis passes.”

According to Gevers, the current global crisis is likely to push business continuity up the list of priorities for many organisations that have been disrupted by the effects of the coronavirus.

“Organisations are facing new challenges to their productivity; for example in terms of technical support. If a remote user is infected with malware or ransomware, how does the IT team restore that device or do any remediation without being able to physically access it?”

Gevers advises that organisations implement tools that enhances the data protection capabilities of commonly-used tools such as Office365 and can leverage archived data to provide quick recovery of email data in the event of accidental loss, malicious attacks or technical failure. 

“As adoption of cloud-based business applications grow in the wake of forced lockdowns around the globe, companies need to ensure they have the tools to recover in any situation,” he says. “This includes a data management strategy that combines archiving, backup and data protection capabilities to allow for quick restoration of critical systems and applications in the event of disruption.”

Jasmit Sagoo, head of technology at Veritas for the United Kingdom and Ireland, warns that this is a golden age for cybercriminals looking for ransomware opportunities.

“As the global cost of ransomware continues to grow, this World Backup Day, Veritas is saying: ‘don’t pay up, back up!’,” he says. “Ransomware is said to generate an estimated annual revenue of $1 billion a year, and companies who are not consistent in backing up their data are allowing criminals to line their pockets.

“Ransomware attacks exist only because some businesses can’t survive unless the hackers give them back their data.  So, the key to survival is removing that reliance and being able to regain access to data, without engaging with the cybercriminals.  The best way to do that is with a sound backup strategy.

“Sagoo advises organisations to create isolated, offline backup copies of their data to keep it out of reach of any attackers.  They then need to proactively monitor and restrict backup credentials, while running backups frequently to shrink the risk of potential data loss. Businesses should also test and retest their ransomware defences regularly.

“Ransomware strikes without warning and it doesn’t discriminate between its targets – it can happen to any organisation, large or small. Despite their best efforts, most companies will fall to at least one attack. What distinguishes one victim from another is the ability to bounce back, which ultimately depends on its backup strategy.

“When ransomware hits, organisations that aren’t prepared often feel helpless to do anything other than to submit to their attacker’s demands.   That’s why we’re urging all businesses to use World Backup Day as a catalyst to get ahead of the situation and get their data protected.”

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