DM Magazine April 2024

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Members 215 Loyalty Only Loyalty Stats For 2024 & Pricing & Beyond PM 4 0 0 5 0 8 0 3

VOL. 37 • NO. 4 • APRIL 2024

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LOYALTY & POINTS

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// 3 ON THE COVER The strategy of keeping rewards within the system through miles and encouraging growth up the loyalty ladder through pricebased benefits has helped many travel loyalty programs become billion dollar profit centers.

Vol. 37 | No. 4 | April 2024

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Members Only: Delivering Greater Value Through Loyalty and Pricing

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Emerging Trends in Canadian Consumer Packaged Goods From eCommerce to AI and Sustainability

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action on this issue, and we strongly urge the Minister of Finance to adopt the Committee’s recommendations,” added Boltman.

Friends of Canadian Media is a non-partisan citizens’ movement that stands up for Canadian voices in Canadian media – from public broadcasting to news, entertainment, culture, and online civil discourse, we work to protect and defend Canada’s rich cultural sovereignty and the healthy democracy it sustains. We are a not-for-profit organization that receives no government funding or donations from political parties or CRTCregulated entities.

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A new study shows that over two-thirds of all Canadian ad revenue goes to foreign digital media.

Over 13 billion dollars in advertising revenues are being extracted from the Canadian economy annually, due to a longstanding federal tax loophole according to updated figures from Friends of Canadian Media.

Canadian businesses can claim tax deductions for advertising on foreign digital media like Facebook and Google. The result is a major loss of advertising dollars for the Canadian media sector.

“Advertising is a critical source of financing for Canadian media companies, and we should be doing everything we can to repatriate the billions of dollars in ad revenues being gobbled up by foreign companies” says Friends of Canadian Media’s Executive Director, Marla Boltman. “It’s imperative that we close this loophole, and financially incentivize companies to invest their ad dollars in Canadian media companies to support Canadian news, programming and jobs.”

Friends of Canadian Media first raised the flag on this issue back in 2017, with research showing that the rise of foreign tech platforms, in particular, was compromising the business models of Canadian media companies. The updated version of the study, reveals this problem has only worsened in the intervening years and has contributed significantly to the crisis in the Canadian news media sector.

“Foreign digital media services have gone from garnering one-third of all Canadian advertising revenues to over two-thirds since the first study,” says Peter Miller, author of the updated report, “and trends suggest that the loss of Canadian media advertising share is accelerating”.

In its report ahead of Budget 2024, the Standing Committee on Finance recommended introducing tax measures that would ensure that Canadian media are not deprived of advertising revenues.

“Canadians expect and deserve decisive ❱ DMN.CA

As part of its 27th annual Reputation study, Leger is proud to unveil the list of the most reputable companies according to Canadians in 2024.

Leger’s Reputation study has become the benchmark for measuring corporate reputation in Canada and monitoring how it changes over time. This year, Leger surveyed more than 38,000 Canadians to explore their perspectives on close to 300 companies across 30 different sectors.

Conducted annually, it is based on Leger’s exclusive model of six recognized pillars of reputation — financial strength, social

responsibility, honesty and transparency, quality, attachment and innovation.

The Top 10 Most Reputable Companies in Canada in 2024* The maximum possible reputation score is 100. This year, according to Canadians, the most reputable companies are: 1.

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Google (Reputation Score: 75) Sony (Reputation Score: 72) Canadian Tire (Reputation Score: 71) Samsung (Reputation Score: 71) YouTube (Reputation Score: 70) Shoppers Drug Mart (Reputation Score: 69) 7. Microsoft (Reputation Score: 69) 8. Amazon (Reputation Score: 68) 9. Dollarama (Reputation Score: 68) 10. Costco (Reputation Score: 68) *Methodology: 38,632 Canadians were surveyed to explore their views on 302 companies in 30 different industries.

Some Highlights of the 2024 Reputation Study Leger’s Reputation study often reflects larger societal trends, and this year is no exception.

As Canadians struggle with turbulent economic times throughout the country, Canadians are looking for companies that can cater to their needs during these tough

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// 5 times and will be more forgiving to those companies that understand and respond to consumers’ needs.

Lisa Covens, Senior Vice, President, noted: “Although certain sectors experienced greater reputation losses and gains than others during these unsettled economic times, we also see an overall resiliency of corporate Canada in this year’s study. The overall reputation of Leger’s cross-section of corporate Canada has remained stable with an average company reputation change of 0. This stability highlights the dynamic equilibrium within the landscape of corporate reputation, showcasing resilience even as Canadians shift their confidence among various brands.”

Eight of the top ten companies in 2023 remain in the top ten this year (Google, Sony, Shoppers Drug Mart, Samsung, and Canadian Tire, Dollarama, and Costco). Google, remaining at #1, has kept its reputation stable and remains in the top spot for the second year in a row. Keeping consistent with the current fiscal climate, Canadian company Dollarama reaches #9, while Costco, geared towards Canadians looking for maximized savings, remains in its position in the top 10 this year (#9).

There were a few industries/sectors whose reputations improved in the last year. For example, as sports leagues returned to preCOVID attendance levels and fan experiences, the MLB (+5), MLS (+5) and the CFL (+4) all had their reputations increase through the lens of the Canadian public.

The telecommunications industry also had a rebound year, and had an average of +5 in their score this year. This increase was highlighted by Rogers, who appear to have recovered from thier service reliability issues of a year ago with a 14-point increase in their reputation this from last year. As well, Telus saw their score increase by 5 points this year.

At the other end of the Reputation spectrum, the transport industry saw many of its companies’ reputations drop.

For example, the public’s perception’s of Sunwing’s reputation declined by took the 9 points from last year. It is possible negative news coverage associated with last-minute holiday cancellations and pulling out of Saskatchewan contributed this decline.

Other similar providers in the sector also experienced declines as VIA Rail dropped by 6 points, followed by WestJet (-4) and Air Canada (-3).

To help understand corporate reputation scores in more depth Leger’s senior researchers delved “deeper into one of the drivers of reputation, Environmental, Social, and Governance (ESG). Shanze Khan, Senior Research Director explains, “What we found is the data underscores a critical insight: consumers are increasingly discerning, rewarding companies that truly integrate APRIL 2024

their stated values into their business models.”

Khan continued, “In a competitive landscape, with companies vying for finite attention, it is imperative to focus efforts on sectorrelevant initiatives rather than diluting them across numerous fronts. This shift towards authentic and impactful action, aligned with their sector, is indicative of the evolving expectations of consumers, who are looking for more than just surface-level commitments that can come across performative.”

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Nine researchers, and explorers receive prestigious grants to fund research and storytelling projects that help preserve the natural and cultural wonders of Canada.

The Trebek Initiative is pleased to unveil the recipients of its highly anticipated 2024 research awards, given to nine exceptional individuals selected for their outstanding dedication to advance knowledge and storytelling about Canada’s natural and cultural heritage.

The grants totalling $710,000, are now recognized as the most prestigious research and storytelling awards in the country, for Canadians who are doing exceptional research in one of five areas of study: human history and culture, human innovation, land, wildlife and water.

The winners were selected from a total of more than 50 applications.

Each year, the Trebek Initiative provides grants to support emerging explorers committed to storytelling and exploration.

The recipients of this year’s cohort represent a diverse range of backgrounds and expertise, all united by their passion for preserving and celebrating Canada’s rich landscape.

The 2024 Fall Cohort recipients are as follows: Ellen Whitman, Edmonton, Alberta - a dedicated Forest Research Scientist, Ellen will delve into the effects of wildfires on plant communities, providing crucial insights to help influence fire management and land use policy. Her research focuses on ecology, forestry, wildland fire, and remote sensing in the North American boreal forest.

Dalal Emily Lucia Hanna, Ottawa, Ontario - In an ambitious cross-country endeavor, Biodiversity Conservationist Dalal Emily Lucia Hanna will spearhead StreamBlitz, a project to assess the water quality in 100 streams, to understand the impact of past timber harvesting and provide recommendations to minimize its future effects on freshwaters.

Hanna is an Assistant Professor at Carleton University.

Scott Parent, Saugeen Bruce Peninsula, Ontario - Filmmaker Scott Parent will raise awareness of the negative impact plastic trash has on the waterbirds of Lake Huron with a short film that follows a colony of double-crested cormorants and provides an immersive view of their freshwater island life.

Nick Hawkins Fredricton, New BrunswickFilmmaker Nick Hawkins will bring the incredible journey of Atlantic salmon to life through his project, using cutting-edge cinematography to trace Salmon migration from Canada’s rivers to the frigid fjords of Greenland.

Victoria Lean, Toronto, Ontario - Filmmaker Victoria Lean will produce a short documentary that depicts the impact of humans’ underwater noise pollution on beluga whales. Her unique work combines a blend of storytelling techniques, a commitment to social and environmental issues and a dedication to pushing the boundaries of the form.

Isabelle Groc, Vancouver, British Columbia - Award winning environmental writer, conservation photographer and documentary filmmaker Isabelle Groc’s visual storytelling project will document the migration of shorebirds along the Atlantic and Pacific coasts, assessing the effectiveness of protected areas in their conservation.

Taylor Roades, Vancouver, British Columbia -Award winning Photographer Taylor Roades, will document a community’s discovery of ancient hunting artifacts from 9300 years ago that are emerging from the Yukon’s melting ice patches.

Melissa Renwick, Tofino, British Columbia - Portrait Artist, Melissa Renwick’s project will portray the diverse inhabitants of Tofino, weaving the unique story of this west coast haven through intimate portraits of the people that call it home. Her work has been featured by The New York Times, TIME Magazine, The Globe and Mail and Maclean’s Magazine.

Amy Romer, Vancouver, British Columbia Multimedia Journalist Amy Romer’s immersive six-part mini-podcast series will tackle ecological grief, offering listeners tangible solutions to foster engagement and action to preserve.

These individuals will embark on projects aimed at addressing pressing environmental issues, exploring cultural heritage, and inspiring action among Canadians. From studying the effects of wildfires on plant communities to documenting the migration patterns of shorebirds, their endeavors DMN.CA ❰

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promise to deepen our understanding and appreciation of Canada’s natural and cultural heritage.

Established in 2021, the Trebek Initiative was created through a historic collaboration between the Royal Canadian Geographical Society and the National Geographic Society.

The initiative was named after the late Alex Trebek, the renowned host of Jeopardy! and philanthropist who had a passion for geographic literacy and served as the Honorary President of the Royal Canadian Geographical Society. The Trebek Initiative is committed to supporting emerging explorers who utilize the power of storytelling to inspire and engage communities across Canada. For more information about the Trebek Initiative and its programs, please visit www.trebekinitiative.com.

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Bell Canada announced the availability of Google Cloud Contact Center AI (CCAI) from Bell for Canadian businesses – the first fully AI solution for Bell enterprise and mid-market customers.

Google Cloud’s CCAI from Bell is a managed solution supported by professional services expertise that enables intelligent customer and agent experience leveraging generative AI-infused technology. Providing rich conversational experiences and analytics, Google CCAI from Bell offers scalability and flexibility that can be added to existing contact centre environments and to cloud contact centres of any size.

Google’s CCAI solutions can deliver exceptional outcomes, as Bell has experienced with its own implementation. Bell will work with customers to customize use cases that leverage the power of the innovative technical solutions available with Google CCAI from Bell, including: Virtual Agent – Natural-sounding virtual agents reduce call volumes and accelerate time-to-resolution by collecting key ❱ DMN.CA

information to answer simple customer queries, freeing human agents to handle more complex issues. When customers do need to speak to an agent, they’ll reach one faster and be automatically directed to the agent with the right expertise to solve their issue.

Agent Assist – A virtual supervisor of sorts, Agent Assist uses real-time natural language processing to determine customer needs and sentiment and offers step-by-step recommendations to help agents deliver the best responses and solutions with confidence.

Faster agent onboarding, improved customer experience, reduced callbacks for the same issue, and improved sales are proven outcomes of Agent Assist.

Analytics and Insights – Actionable insights into customer experience and sentiment help managers and agents learn from every interaction. Analyses of interactions provide a better understanding of business trends, interaction drivers, traffic, and other key metrics. Insights support strategic business decisions, tailored agent coaching, and result in more data-driven workforce planning and management.

Bell is also deploying both the virtual agent and contact centre as a service AI solutions (CCAI and CCAIP) within its own contact centres, digitally transforming and AIenabling their internal solutions, delivering improved customer experiences to Bell customers, and helping them develop deep expertise to guide Canadian businesses with their own integrations. Bell provides customers with end-to-end managed support – from assessment of the best fit solutions, to customer journey mapping and optimization, workforce management and quality assurance, technology and applied AI integrations, and optimization of agent experience and change management.

As a Premier Level Partner for Google Cloud in the Sell Engagement Model and

2024 Google Cloud sales Partner of the Year - Canada recipient, Bell offers enhanced expertise within Google Cloud. Bell will now add Google CCAI solutions to its Contact Centre Practice, which has a proven track record of successful premise and cloud contact centre implementations with a commitment to customer satisfaction.

“We are thrilled to move forward in our strategic partnership with Google Cloud to offer CCAI to our customers. By deploying these products internally, our Professional and Managed Services teams are gaining extensive knowledge and expertise to support our customers effectively throughout the digital transformation of their contact centres. With reduced agent training time and tools to support improved sales outcomes, Google CCAI through Bell aims to turn what is traditionally a cost centre into a revenue generator,” said Michel Richer, SVP, Enterprise Solutions, Data Engineering and AI, Bell.

“AI is fundamentally changing how many businesses operate, fueling a new era of cloud that can benefit virtually every area of an organization. We’re excited that Bell will help scale AI capabilities to customers across the Canadian market. By utilizing Google Cloud’s CCAI, Bell Canada can both transform their own contact centre operations and help their customers increase customer satisfaction, improve agent performance, reduce costs, and improve operational efficiency,” said Sam Sebastian, VP, Google Cloud Canada.

“Contact centres are turning to AI-infused applications to dramatically improve both customer and employee experiences.

Recent Frost & Sullivan research reveals AI momentum is building, with 32% of contact centres having already deployed AI-enabled agent assist technology and 37% leveraging intelligent virtual agents. Keys to success for these and future AI deployments includes enlisting trusted technology partnerships,” said Bernie Arnason, Industry Analyst, Frost & Sullivan.

The availability of Google CCAI is a APRIL 2024

// 7 significant milestone for Bell as the company continues to support Canadian businesses in their digital transformation journey with nextgeneration solutions. Bell itself is undergoing a company-wide digital transformation, and in addition to Google CCAI services, is in the process of deploying other solutions within its contact centres, including Google Cloud Contact Centre AI Platform.

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Surrey, BC based INEO Tech Corp. signed a new strategic partnerships with several prominent US-based advertising platforms and the setting up of Private Marketplace (PMP) deals with leading Demand Side Platforms (DSPs).

These partnerships mark another significant milestone for the INEO Retail Media Division’s commitment to providing innovative advertising solutions and driving results for clients.

The newly formed partnerships INEO has signed are with AdXcelerant and LoopTV while the PMPs were set up with The Trade Desk and Quotient. The partnerships, signed in April of this year, will allow INEOs network to accept and display Digital-Out-Of-Home (DOOH) and Connected TV (CTV) ad content from the Company’s partners, enhancing INEO’s reach and capabilities across an expanded set of digital advertising channels. The PMP deals allow the largest DSPs to send advertising directly into the INEO US retail store network programmatically. By joining forces with these industry-leading platforms, INEO is poised to deliver additional value to its clients and empower them to achieve their advertising and marketing objectives with greater efficiency and effectiveness.

“We are thrilled to announce these strategic partnerships, which represent a significant step forward for INEO and our clients,” stated Kyle Hall, INEO’s CEO. “The rapid progress INEO Retail Media has made since we formed the division 100 days ago is tremendous.

The relationships we have forged, and the agreements we have signed, have enhanced our media business and charts a clear roadmap of increasing ad revenue with our growing base of US-based systems. These collaborations underscore our dedication to innovation and our commitment to providing best-in-class advertising solutions which drive real business results.”

“We are excited to collaborate with our new partners and leverage their expertise and resources to further enhance our platform and deliver even greater value to our clients,” added Salim Tharani, Managing Director of INEO Retail Media. “Together, we are poised to revolutionize the way businesses approach in-store digital marketing and drive success in today’s competitive retail media landscape.”

APRIL 2024

Check us out online dmn.ca Are your clients driven by data, powered by insights, and fueled by tech innovation? More than 3,000 of DM Magazine’s multichannel, data-driven readers are welcomed every day on our website and through our email campaigns and social platforms which explore all aspects of customer-engaged marketing.

What’s more they’re not anonymous, transient skimmers. We welcome them by name, title, company, contact details, interests, accomplishments and planned initiatives. We populate our channels with appropriate longform, short-form and news-based content tailored to our loyal audience’s individual responsibilities. They’re senior leaders with hundreds of millions of dollars at stake as they pilot the biggest companies and make the most impactful decisions for their organizations.

Your opportunity? Entice our readers into becoming your customers.

Test a fixed period of marketing via our channel(s) (print, digital, web, email, in-person, social, content, mail, courier, lights in the night sky) and we’ll provide you with data. Lots of data. Live leads, real contacts, analytics, tracking results and our own suggestions and advice on what to do to build your momentum. We’re known for bundling full programs for an appropriate discount that you can justify confidently and comfortably through measured results and long-range success.

Remember: readers + content + offer + action = results.

Your results are from in-depth, pre-qualified, high-value proven users of the types of services you’re offering. They’re proven because we started the qualification process long before you made your offer.

Drop me a note now, and I will send you a complete, no-obligation 2024 Media Kit, a sample reader list, a marketing options sheet, and so much more. DM Magazine (CMOs and their teams at Canada’s major companies and organizations, covering all forms of marketing, loyalty and service delivery) www.dmn.ca Remember, every reader is a reader because we understand their responsibilities, authority and planning. Here’s my email.

steve@dmn.ca Steve Lloyd, Publisher & Editor in Chief

DMN.CA ❰

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POINTS & PROGRAMS

Members Only: Delivering Greater Value Through Loyalty and Pricing

BY KELSEA ALDERMAN, OREN EIZENMAN, JAD HAMDAN, JAKE HART AND JAMIE WILKIE

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onsumer-facing businesses have an opportunity to unlock holistic value. By better integrating their loyalty programs with pricing strategies, they can drive growth in a muddled economic landscape.

The year 2024 is proving to be another challenging one for consumers and for the companies, brands, and retailers that cater to them. With strong consumer spending after a period of record-high inflation and fears of a recession, consumers are continuing to shift their habits: budgeting more for essentials, trading down in search of better value, and demanding more from their favorite retailers.

These crosswinds can feel destabilizing for consumer-facing businesses. As these companies continue to grapple with inventory, pricing, and interest rate uncertainty, they need to go above and beyond to stand out in a crowded market, while ensuring that they deliver customer value and drive profit margins.

Companies can accomplish this dual mission by combining ❱ DMN.CA

their loyalty tactics and pricing strategies for better personalization, bolstering the holistic value they can deliver to their customers.

Most companies already have several ways to provide value to customers through loyalty, pricing, and promotions (among other benefits), but very few look at all these levers in concert to create an integrated customer strategy and experience. The lack of a unified value proposition can lead to a disjointed experience for customers. At worst, this could result in consumers shopping less, spending less when they do shop, or switching to a competitor.

The result: suboptimal margin investments and nonincremental promotion and loyalty tactics.

Creating a cohesive, holistic value equation across pricing and loyalty levers can be the key to propel the next horizon of growth for customer-facing businesses.

In this article, we will explore how businesses can capture value from this holistic value proposition, highlight some of the biggest obstacles we’ve seen in activating

this mission, and look at how organizations might begin to think about how to overcome them.

Tiers of opportunity As with loyalty programs, there are tiers to the value that can be captured from a holistic and integrated customer value proposition. We will explore the opportunity potential across three tiers: bronze, silver, and gold. Each successive level brings more value but is also more difficult to activate than the preceding one.

BRONZE OPPORTUNITY: Building a larger pool of loyalty customers through pricing benefits Businesses can first unlock the value of integrated pricing and loyalty by using price-based benefits to expand loyalty programs.

On their own, loyalty programs can be helpful tools to drive longterm engagement and stickiness.

Pricing can be a very effective way to improve and expand the reach of loyalty programs by giving these programs new levers and tactics to deliver tangible value to their

customers.

Usually, offering exclusive promotions (such as percentage or cash discounts) to loyalty program members is the most straightforward way to capture the benefits of integrated pricing and loyalty, because it makes the value proposition of loyalty programs abundantly clear. In this way, pricebased loyalty benefits are typically very effective. They can encourage extra sign-ups from nonloyalty customers and establish a strong, clear link between the program and the value it delivers. This endto-end shopping experience helps create more loyalty customers, who often make more frequent or larger purchases than nonloyalty members.

One of the best examples of pricing benefits boosting a loyalty program is Amazon Prime.

Amazon first launched its Prime program in 2005, offering free shipping to members who were willing to pay an annual flat fee. Amazon used the incentive of preferred pricing for loyalty members to launch Prime Day in 2015. During the first year of APRIL 2024

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Prime Day, Amazon brought in just under $1 billion in sales. By 2023, Prime Day generated nearly $13 billion in sales, with analysts estimating that the event led to an incremental $5 billion in revenue for Amazon.

Prime membership has grown similarly over time. As additional benefits have been added — such as two-hour delivery with Prime Now, or free e-books through Prime Reading — the number of Prime members has skyrocketed.

Amazon’s ability to integrate pricing and loyalty has had a dramatic impact: as of 2023, about 75 percent of all US households were Amazon Prime members, spending more than four times as much as nonmembers over the course of their lifetimes.

SILVER OPPORTUNITY: Using pricing benefits to encourage changes in customer behavior Once retailers can effectively use price-based benefits to expand their loyalty programs, they can build on these capabilities by trying to change the behavior of loyalty members with better APRIL 2024

incentives. One way companies can do this is by leveraging loyaltybased pricing benefits (in addition to cash-based benefits) that can optimize the lifetime value of customers more effectively than traditional discounts.

Loyalty-based offers have been proven to be more effective than traditional approaches in delivering incremental, long-term value to certain customers. Instead of cash discounts, some companies have successfully utilized pointsbased currencies. These can spur additional purchases, encourage greater engagement, drive conversion by keeping customers within a retailer’s ecosystem, and encourage existing loyalty customers to unlock higher status levels within loyalty programs.

Activating this capability requires rigorous data and analysis to understand incrementality and points breakage to ensure continuous engagement while managing margins.

In the retail world, integrating pricing and loyalty to this degree is pretty uncommon. Airlines are a standout B2C exception. For

years, major airlines have offered benefits such as improved mileage rewards, upgrades, free checked bags, preferred seating, and deeper discounts for high-tier status members, who in turn spend more.

This strategy of keeping rewards within the system through miles and encouraging growth up the loyalty ladder through price-based benefits has helped many travel loyalty programs become billiondollar profit centers.

Sometimes, airlines also offer sophisticated, under-the-hood special pricing for high-tier loyalty program members. Those with special status might every so often notice lower fares on certain route options that are accessible only through their loyalty status.

Airlines may not market this explicitly, so as to retain flexibility in how and when to offer special pricing. But by quietly leveraging this tool, they encourage members to fly more frequently. In a crowded market of airline loyalty programs, benefits that go beyond points and rewards — linking customers back to pricing — are far stickier and can generate new value.

GOLD OPPORTUNITY: Integrating loyalty and pricing to create new value through personalization The gold opportunity, a bestin-class impact for pricing and loyalty integration, is a fully personalized shopping experience that offers tailored promotions, member benefits, marketing, and personalized customer journeys.

Typically, companies test and scale personalization through a combination of loyalty data and insights (for instance, customer identification, purchasing patterns, and shopping preferences) and pricing or promotional levers (for example, discounts and storewide events). We’ve seen significant impact when this strategy is integrated successfully. At companies with pilot programs, we have seen a 2 to 4 percentage-point margin improvement on gross margin dollars through personalized marketing experiences (such as customized imagery, text, and emails based on purchase history) and pricing offers (such as offering deeper discounts for higher loyalty tiers), as compared with standard DMN.CA ❰

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POINTS & PROGRAMS mass offers and experiences. This top-down strategy encourages companies to test and iterate, continuously optimizing for individual customer segments.

We’ve observed that personalized messages and offers should be used in addition to mass or nonpersonalized touches as part of a broader optimization strategy rather than fully in place of them. The best retailers use the combination of at-scale and personalized experiences to keep customers engaged, balancing strategies across occasions (such as maintaining mass strategies during large, market share events like Black Friday) in a way that best optimizes for both the brand and the customer.

The beauty — and challenge — of personalization is that it gives the customer what they want at any given moment. This might mean a coupon for 25 percent off over the US Memorial Day weekend, a personalized message for a loyalty anniversary, or a mass message and offer for Black Friday, all of which might change the following year.

The secret to what promotions and tactics work is always changing, and retailers need to be prepared to constantly add new tactics to the recipe to keep customers engaged.

Challenges to ‘going for gold’ Although some organizations have successfully started integrating loyalty and pricing, it’s still far from commonplace, with very few examples of a true best-in-class approach. So far, success stories are mostly outliers, and many consumer-facing companies have only just begun to scratch the surface of what’s possible. For those that have made some inroads, maximizing the impact and value potential is often still a challenge.

Companies that struggle to operationalize loyalty and pricing integration do so mainly because of siloed organizations and limited analytical and technological capabilities. By examining companies that have successfully managed this transition, we have identified the three biggest challenges consumer-facing businesses typically face on this journey. ❱ DMN.CA

“The sector is ripe for evolution. Driving loyalty alone isn’t enough to retain and engage customers, while pricing alone is becoming less effective.”

Coordinating cross-functional teams and building new ways of working The most significant shift that companies must make to integrate loyalty and pricing functions is bringing together the marketing-led view of customer centricity with the merchant-led view of product centricity. Traditionally, these two organizational pillars have lived in isolation from each other, with coordination at the very top and only for specific, targeted initiatives.

To capture the full value from loyalty and pricing integration, these teams need to be deeply integrated and connected, with guidance from the executive level.

The challenge of bringing marketing and merchandising teams together is only half of the problem. The other critical challenge is transitioning the mindsets of teams from traditional, brand-led ways of working to personalized, customerled ways of working.

The best approach to integrate these two functions is through a unified tool set — a single place for reporting, planning, and consolidating understanding of how these loyalty and pricing levers combine into a total holistic value investment pool of offers and engagement. That way, the separate parts of the marketing and merchandising organizations can build a unified strategy, bridging functional gaps in their organization traditionally limited by different tools, approaches, and strategies.

Building analytical and technical capabilities to drive enhanced decision making The second critical impediment is

lacking a deep bench of analytical models and tools that are needed to unlock value across bronze, silver, and gold opportunity areas.

This makes it extremely difficult to see the impact of integrated loyalty and pricing functions.

Standing up the modeling needed for loyalty-backed pricing strategies and personalization requires a few critical, challenging, and complex pieces. First, companies need to build a strong, clean data foundation on which the new stack of models will be created. This requires a deep dive into legacy data systems and often also requires the creation of new business and customer-facing metrics and attributes — such as elasticitybased propensity scores — that need to be created and maintained.

After the data foundation is set, teams need to conduct heavy amounts of quality assurance and checking to ensure that the data is accurate. Companies often underestimate the difficulty of this step. Once the data foundation is set and checked, teams need to build complex models to answer questions like: What is the next best action for the customer? What is their promotional sensitivity, and does it differ by category or product? What is the best channel and timing for the customer to engage?

Once all the models are created and validated, they need to be integrated into existing operational processes that are connected to automated tools and downstream execution channels that can handle the new levels of complexity. To execute these strategies well, consumer-facing companies need a range of tools to manage and deliver content and offers at the

individual customer level, with up to billions of versions required for hundreds of millions of customers.

Keeping everything clear and simple for customers The single biggest challenge retailers face is translating the complexity of loyalty and pricing integration into a simple, personalized experience for customers. The objective is to use new processes, analytics, and automation to give the customer the right experience at the right moment, rather than offering a swirl of touches that result in a chaotic and unorganized experience. Businesses that do this well rely on advanced decisioning capabilities — embedded as part of the new automated marketing technology stack — to prioritize and distribute the appropriate touchpoints. If done well, customers might never realize that their experience differs from someone else’s. If not done well, companies risk flooding their customer base with excessive and disconnected touchpoints.

Now, more than ever, customers are expecting more from their favorite businesses. Brand promiscuity is at an all-time high at a time when loyalty programs have proliferated. At the same time, few companies have made real advances in differentiating their customer value propositions through integrated pricing, loyalty programs, and better personalization.

The sector is ripe for evolution.

Driving loyalty alone isn’t enough to retain and engage customers, while pricing alone is becoming less effective. Improving the holistic customer value proposition with an integrated pricing and loyalty strategy can fuel greater future growth. But it isn’t easy and requires new ways of working, deep analytical capabilities, and tools for integration and dynamic changes over time. But companies that can capitalize on this new capability may well speed ahead to the leading edge of the consumerfacing economy.

THIS ARTICLE is a collaborative effort by KELSEA ALDERMAN, OREN EIZENMAN, JAD HAMDAN, JAKE HART, EMILY REASOR, and JAMIE WILKIE, representing views from McKinsey’s Growth, Marketing & Sales Practice.

APRIL 2024

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The Top 215 Customer Loyalty Statistics for 2024 and Beyond Elevate your loyalty strategy with top-notch insights from 215 loyalty statistics of 2024.

Dive in now to revolutionize your approach.

BY BARBARA KEKES-SZABO

L

et’s take a deep dive into loyalty statistics to find out what metrics are set to shape the coming years. There is a lot on the line: according to Fortune Business Insights, the global loyalty management market is projected to grow from $6.47 billion in 2023 to $28.65 billion by 2030, at a CAGR of 23.7 percent in the forecast period. That’s why it is crucial for companies to be aware of these numbers. Prepare yourself for the most extensive compilation of customer loyalty statistics for the year 2024!

Also, feel free to check out Antavo’s Global Customer Loyalty Report featuring current and future loyalty industry trends.

Within our extensive compilation of more than 200 customer loyalty, loyalty marketing, and loyalty program statistics, you’ll undoubtedly find the answers you seek. We’ve put together an array of exciting loyalty statistics and resources, not only from Antavo, but also from renowned companies such as Accenture, Capgemini, Deloitte, Forrester, Gartner, KPMG, McKinsey, Ogilvy, PwC, and The Wise Marketer. Furthermore, we’ve incorporated resources from several of our partners like Acxiom, Fresh Relevance, and Salesforce. You can find the links for all of these sources at the end of the article. So continue reading to discover today’s most captivating loyalty metrics.

APRIL 2024

ISTOCK/MONKEYBUSINESSIMAGES

Exploring the Customer Loyalty Market in 2024 As you dive into this collection, you’ll uncover not just customer loyalty, loyalty marketing, and loyalty program statistics, but also insights into key questions such as: ❯ What motivates customers to remain loyal to your brand? ❯ How has shopper behavior evolved in recent years? ❯ Why is personalization increasingly vital? ❯ What does the future hold for loyalty programs? ❯ How are loyalty programs perceived amid global economic downturns? ❯ What impact does AI have on the loyalty market? ❯ In what ways can loyalty programs align with a company’s ESG initiatives?

DMN.CA ❰

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POINTS & PROGRAMS experiences. (Deloitte) 34 percent of companies generally treat customers as unique individuals.

(Salesforce) 7. 80 percent of marketers say customer experience is a key competitive differentiator.

(Salesforce) 8. 72 percent of marketers say meeting customer expectations is more difficult now than it was a year ago.

(Salesforce) 9. By 2026, 60 percent of large enterprises will use total experience to transform their business models to achieve world-class customer and employee advocacy levels.

(Gartner) 10. 61 percent of high-growth companies are shifting to a first-party data strategy.

(Deloitte) 11. 78 percent of high performers say they use a customer data platform (CDP). (Salesforce) 12. 63 percent of digital marketing leaders surveyed still report that leveraging integrated customer data for digital marketing execution presents a major challenge.

(Gartner) 13. 38 percent of CMOs consider accelerating the move to new digital technologies or platforms their number one priority, and 36 percent of CMOs consider implementing systems or algorithms to enhance customer personalization their top priority. (Deloitte) 14. 87 percent of companies agree that using data and predictive analytics to improve customer experience will be a key source of customer advantage over the next five years. (Acxiom) 15. 50 percent of businesses think RMNs leveraging firstparty customer data enables marketers to deliver more relevant ads. (Acxiom) 16. 88 percent of larger businesses are planning to offer more intuitive ways to interact with customers. (Acxiom) 17. Focusing on branded experiences rather than traditional social media advertising has increased ROI by 70 percent. (Ogilvy) 18. 89 percent of C-Suite 6.

1

The Power of Data – Business Statistics Brands are well aware that customer data is the lifeblood of business today. With the rising number of privacy laws and the disappearance of third-party cookies, companies need to rethink their data strategies and invest in first-party data capture.

Loyalty programs play a big role in collecting and leveraging zero- and first-party data by incentivizing customers to share information with the brand. The data they collect allows companies to create more sophisticated segments and perfect their personalization strategies.

1. 1 in 3 businesses without a loyalty program today will establish one by 2027 to shore up first-party data collection and retain high-priority customers. (Gartner) 2. 78 percent of marketers say their customer engagement is data-driven. (Salesforce) 3. 51 percent of high-growth brands are deploying firstparty data in delivering personalized content via dynamic creative optimization; 49 percent use this data to serve leads to users via programmatic media.

(Deloitte) 4. 75 percent of surveyed global executives said they will invest more in delivering hybrid experiences over the next 12 months. (Deloitte) 5. 43 percent of surveyed executives are investing in hybrid experiences to increase personalization and make their offerings more innovative; 38 percent plan to offer more inclusive ❱ DMN.CA

marketers recognize that employees as influencers hold immense value for their businesses. (Ogilvy) 19. 80 percent of business leaders agree that generative AI will increase efficiencies in their business, and 52 percent agree that it will increase growth opportunities. (Deloitte) 20. CMOs have made the shift from digital-first to hybrid multichannel strategies. 56 percent said online channels still take the largest share, however, 44 percent said offline channels account for almost half the total available budget — a more equitable split than in recent years.

(Gartner) 21. With the end of third-party cookies on the horizon, 68 percent of marketers have a fully defined strategy to shift toward first-party data.

(Salesforce) 22. 85 percent of marketers say their external messaging reflects corporate values.

(Salesforce) 23. Nearly 45 percent of the businesses have changed their organization’s marketing priorities because of the economic downturn. (Acxiom)

2

What Keeps Shoppers Loyal? – Customer Loyalty Statistics Following the recent hyperjump in digital transformation, businesses have to be aware of modern customer expectations if they wish to foster loyalty.

Loyal customers are the most likely to keep coming back,

and they tend to have a higher purchase frequency and lifetime value. They spend more on the brands that they’re committed to—even where there are other reliable alternatives. Why? Because they trust that brand and feel it has provided the best product quality and excellent customer experience from the start.

1. Price and quality were individually cited as top-three purchasing criteria anywhere between 61 percent and 86 percent of the time according to customers surveyed globally. (Deloitte) 2. 80 percent of customers place the same emphasis on flawless engagement as they do on product quality. (Salesforce) 3. 99 percent of customers believe companies need to improve their trustworthiness.

(Salesforce) 4. 80 percent of customers say the experience a company provides is as important as its products and services.

(Salesforce) 5. 65 percent of customers expect companies to adapt to their changing needs/ preferences. (Salesforce) 6. 72 percent of consumers say better deals made them switch to another brand. (Salesforce) 7. 81 percent of customers expect faster service as technology advances, and 73 percent expect better personalization. (Salesforce) 8. 30 percent – that is how high the customer churn rate is in some global markets.

(Deloitte) 9. 83 percent of customers expect flexible shipping and fulfillment options such as buy-online-pick-up-in-store.

(Salesforce) 10. 62 percent of customers say their experiences with one industry influence their expectations in others.

(Salesforce) 11. Product experience and interaction experience, which have the biggest impact on customer loyalty, account for over 36 percent and 30 percent of change in customer loyalty, respectively. (Gartner) 12. 60 percent of the world’s population will use digital wallets by 2026. (Accenture) APRIL 2024

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POINTS & PROGRAMS 13. 71 percent of consumers have switched brands at least once in the past year. (Salesforce) 14. 61 percent of customers who shop via social media expect to do so more in the next three years. (Salesforce) 15. 96 percent of customers say excellent customer service builds trust, and 82 percent have recommended a company based on excellent customer service. (Salesforce) 16. 83 percent of customers say they’re more loyal to companies that provide consistency across departments. (Salesforce) 17. 13 percent of consumers feel less loyal to brands and retailers than they did a year ago. (Fresh Relevance) 18. 43 percent of consumers say they plan to increase online shopping in the next six months. (PwC) 19. While 61 percent of executives believe customers are more loyal now than before the pandemic, only 20 percent of consumers agree. (PwC) 20. More than twice as many executives (25 percent) as consumers (11 percent) believe that good customer service is the key to winning loyalty, while only half as many executives (23 percent) as consumers (46 percent) believe that high-quality products are key. (PwC) 21. 71 percent of the consumers we surveyed actively shop around to get the best deal on a product or service, and 61 percent are likely to switch to an alternative brand if it’s cheaper. (Acxiom) 22. 65 percent of consumers want to be rewarded for their loyalty, and 72 percent are willing to stay loyal to a brand if they offer discounts and rewards. (Acxiom) 23. 56 percent of customers are most likely to repurchase from a company if they receive personalized loyalty rewards and programs.(Acxiom) 24. 91 percent of consumers are more likely to engage with brands that tailor their approach to be personally relevant to them. (The Wise Marketer) 25. 27 percent of a loyalty APRIL 2024

program’s marketing budget, on average, is dedicated to customer loyalty and CRM. (Antavo) 26. 9 out of 10 companies have reported a positive ROI. For those with a positive ROI, the average ROI is 4.8X. (Antavo) 27. 67 percent of companies plan to increase investment in retention during the economic downturn. Only 4 percent of the respondents plan to decrease investment in retention. (Antavo) 28. 2x more companies want to increase their investment in retention than acquisition.

(Antavo) 29. 9 out of 10 companies with an existing program plan to revamp it in the next three years. Last year it was 8.

(Antavo) 30. 6 out of 10 program owners confirmed that they already made significant changes to their loyalty program in the past two years. (Antavo) 31. 6.5 out of 10 respondents want to change their loyalty strategy and technology together. According to the survey results, easy integration is the most valuable aspect when choosing a loyalty technology vendor. (Antavo)

3

Providing the Best – Customer Experience Statistics With price no longer the only determining factor, exceeding customers’ expectations is what helps companies stand out from the crowd. Brands need to be dependable and provide quality

products and services in order to increase trust and loyalty while building strong relationships with customers.

As the number of loyalty programs keeps increasing, differentiating from the competition and maintaining customer engagement is a new challenge that retailers are confronted with. Retailers can respond to that dilemma by improving the loyalty-driven customer experience and with better personalization.

1. 68 percent of respondents say they find it helpful when brands they regularly shop with provide alerts when items go on sale. (Deloitte) 2. Extraordinary experiences help companies earn more than sales — they build relationships. 53 percent of customers say they feel an emotional connection to the brands they buy from the most. (Salesforce) 3. 69 percent of customers want companies to translate the products and services they’ve enjoyed all along into new formats (namely, into digital versions of in-person experiences). Gen Z has a particularly strong craving for digital innovation. (Salesforce) 4. 91 percent of customers say they’re more likely to make another purchase after a great service experience.

Great service experiences are personalized, seamless, and quick — simple in theory, but hard to deliver in reality.

(Salesforce) 5. 52 percent of customers expect offers to always be personalized. (Salesforce) 6. 80 percent of customers agree that the experience a company provides is equally as important as its products or services. (Salesforce) 7. 80 percent of consumers say customer experiences should be better considering all the data companies collect.

(Salesforce) 8. 74 percent of customers expect to be able to do anything online that they can do in-person or by phone.

(Salesforce) 9. 88 percent of customers say good customer service makes

them more likely to purchase again. (Salesforce) 10. 70 percent of customers expect all company representatives to have the same information about them.

(Salesforce) 11. 67 percent of consumers aged 25-34 agree that brands offering their products as services can better understand their needs, and 64 percent of consumers aged 25-34 agree that brands offering their products as services deliver a better experience. (Acxiom) 12. 68 percent of consumers aged 25-34 feel closer to brands that provide services beyond the point of purchase.

(Acxiom) 13. 68 percent of brands agree they can build better customer experiences through as-aservice models. A similar proportion believe offering products as-a-service can help them build deeper relationships and drive brand loyalty. (Acxiom) 14. 68 percent of large businesses agree that providing their products as a service can help them adapt and improve the experience to meet customer needs. (Acxiom) 15. 76 percent of large businesses agree that offering their products as a service can help them establish deeper relationships with their customers and drive brand loyalty. (Acxiom) 16. 70 percent of shoppers want their online retail experiences tailored to their personal preferences. (Acxiom) 17. 73 percent of consumers are willing to stay with brands that deliver a great customer experience, which illustrates incredible potential for AIpowered retention tactics.

(Acxiom) 18. 66 percent of consumers who have purchased through shoppable ads say it enables them to find products and services they’re interested in more easily. (Acxiom) 19. 58 percent of 16-34 year olds say they like it when companies recommend products or services that are tailored to their personal preferences. (Acxiom) DMN.CA ❰

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POINTS & PROGRAMS 20. Six in 10 Gen Z shoppers have discovered products via social media. (Capgemini) 21. Around 40 percent of Gen Z and millennials make an impulse purchase online every 2-3 weeks. This number rises to 48 percent among daily TikTok users. (Ogilvy) 22. 80 percent of consumers have made a purchase based on an influencer recommendation.

(Ogilvy) 23. 31 percent of people believe that live shopping allows them to make more informed purchasing decisions. (Ogilvy) 24. 41 percent of Generation Z consumers and 37 percent of Millennials are willing to share their personal interests, preferences or habits with a business to get a more personalized experience.

(PwC) 25. 43 percent of customers prefer non-digital channels. That means satisfying customers generally requires great experiences both online and offline. (Salesforce) 26. Gen Z are 1.6x more likely to prefer engaging through digital channels than Baby Boomers. (Salesforce) 27. 88 percent of customers say the experience a company provides is as important as its product or services.

(Salesforce) 28. 62 percent of customers feel an emotional connection to the brands they buy from the most. (Salesforce) 29. 56 percent of customers expect offers to always be personalized. (Salesforce) 30. 46 percent would share their style preferences to get tailored rewards. (Salesforce) 31. 64 percent of consumers say companies take online privacy more seriously than they used to. (Salesforce) 32. 79 percent of consumers say they’d be more likely to trust a company with their information if its use was clearly explained. (Salesforce) 33. 61 percent of consumers are comfortable with companies using relevant personal information in a transparent and beneficial manner — up from 52 percent in 2020.

(Salesforce) ❱ DMN.CA

34. 23 percent of consumers would stop shopping with a retailer if they received emails every day with irrelevant content, which means personalized content is no longer a nice-to-have, it’s essential. (Fresh Relevance) 35. 36 percent of consumers say they want control over the type and frequency of marketing emails they receive.

(Fresh Relevance) 36. 89 percent of global consumers check online reviews as part of their online buying journey. (Fresh Relevance) 37. 35 percent of consumers say their most popular channel for receiving promotional messages is email, closely followed by brand websites (32 percent) – with social media platforms, such as TikTok (13 percent) and Instagram (16 percent), lagging behind. (Fresh Relevance) 38. 29 percent of consumers are more likely to shop with a retailer that shows them in-store availability at their nearest store for products they are browsing on online channels. (Fresh Relevance) 39. 63 percent of consumers interact with at least 2 channels before making a purchase. (Fresh Relevance) 40. 76 percent of consumers get frustrated when companies don’t use personalization.

(Fresh Relevance) 41. 35 percent of respondents find app designs indistinguishable across brands, a sentiment that rises to nearly 40 percent among 18-to-24-year-olds.

(Accenture) 42. 38 percent of people globally believe it’s more crucial than ever to apply critical thinking when choosing technologies.

(Accenture) 43. 22 percent of people feel grocery retailers have their best interest at heart.

(Accenture) 44. 37 percent of people worldwide think that many companies are prioritizing higher profits over better customer experience.

(Accenture) 45. 87.7 percent of survey

respondents think microtargeting has a positive impact on customer retention and satisfaction. (Antavo) 46. 67.1 percent think microtargeting pays off. These respondents stated that benefits are greater than costs.

(Antavo) 47. 78.1 percent of respondents think diverse reward redemption options have a positive impact on customer retention and satisfaction.

(Antavo) 48. 46.9 percent think diverse reward redemption options pay off. These respondents stated that benefits are greater than the costs. (Antavo)

4

Growing and Retaining Loyal Customers – Loyalty Marketing Statistics Loyalty marketing is the art of putting customer insight into action to stay relevant for customers, which is especially important in a crisis situation.

Among the top three marketing initiatives that companies plan to prioritize in 2023, loyalty marketing is vital to achieving high engagement numbers. This means upcoming loyalty programs need to align with companies’ strategies. Otherwise, they won’t gain traction.

1. 48 percent of baby boomers want control over the type and frequency of marketing emails they receive. (Fresh Relevance) 2. 76 percent of customers prefer different channels depending on context. (Salesforce) 3. Mobile messaging is used

by 69 percent of marketers, and nearly two-thirds of organizations use audio media like podcasts and streaming ads. (Salesforce) 4. 90 percent of marketers say their digital engagement strategy has changed since before the pandemic. 89 percent say their marketing channel mix has changed.

(Salesforce) 5. 78 percent of marketers say they engage customers in real time across one or more marketing channels.

(Salesforce) 6. 84 percent of marketers say they adapt marketing strategies and tactics based on customer interactions.

(Salesforce) 7. 33 percent of marketers are planning to use usergenerated content, and 27 percent plan to use influencer marketing. (Salesforce) 8. 28.2 percent of organizations’ total marketing budget goes to customer loyalty program management and CRM — a 5.4 percent year-over-year increase. (Antavo) 9. 63 percent of executives say their company’s loyalty program budget increased in the latest planning cycle, and businesses think of loyalty as a growth engine just as much as a retention tool. (PwC) 10. 51 percent of consumers say they like it when companies recommend products and services that are tailored to their personal preferences.

(Acxiom) 11. 47 percent of consumers said they are more likely to click on an advert or email if it contains personalized content, including offers. (Acxiom) 12. Despite the popularity of loyalty programs, 22 percent of consumers say it is harder today for brands to keep their loyalty. (Gartner) 13. 61 percent of respondents whose loyalty program is managed by a loyalty technology solution vendor are satisfied with their program, while 51.1 percent of respondents whose loyalty program is managed by inhouse technology are satisfied.

(Antavo) APRIL 2024

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POINTS & PROGRAMS 5.

5

Transforming the Loyalty Market – AI and the Metaverse Emerging technologies, such as AI and machine learning, have the potential to revolutionize loyalty management systems in the future.

They may provide merchants with sophisticated insights to improve customer dialogue, experience, and total sales.

AI and the metaverse are closely connected. Combining them has the potential to create captivating, personalized experiences for customers. For instance, AI can enhance the user experience within the metaverse by providing personalized recommendations, virtual assistance, or even helping to detect fraud. As the metaverse continues to evolve, AI is likely to play an increasingly important role in creating immersive and engaging experiences for users.

1. By 2025, organizations that use AI across the marketing function will shift 75 percent of their staff’s operations from production to more strategic activities. (Gartner) 2. By 2027, 80 percent of enterprise marketers will establish a dedicated content authenticity function to combat misinformation and fake material. (Gartner) 3. By 2025, 70 percent of enterprise CMOs will identify accountability for ethical AI in marketing among their top concerns. (Gartner) 4. 73 percent of marketers already use livestream video, and 57 percent use virtual customer communities.

(Salesforce) APRIL 2024

53 percent of customers say generative AI will help companies better serve customers. (Salesforce) 6. 68 percent of customers say advances in AI make it more important for companies to be trustworthy. (Salesforce) 7. 60 percent of customers are open to the use of AI to improve their experiences.

(Salesforce) 8. Of the CMOs who say addressing the regulatory environment is their top priority 35 percent have already implemented blockchain technology in their advertising strategy. (Deloitte) 9. 80 percent of companies in technology, media, and telecom and 92 percent of companies in the financial services industry plan on gravitating toward the metaverse within the next 24 months. (Deloitte) 10. 82 percent of those attending live in-game events also made a purchase because of the event, either in the form of digital goods or physical merchandise. (Deloitte) 11. 25 percent of consumers could be spending at least one hour in the metaverse each day by 2026, while 30 percent of businesses are estimated to have products and services ready. (Deloitte) 12. 73 percent of businesses say AI is critical to their success.

(Deloitte) 13. 78 percent of those who have used AR shopping were satisfied with the experience.

(Acxiom) 14. 84 percent of large businesses already use AI to support customer services. (Acxiom) 15. 78 percent of consumers who have used immersive shopping find virtual showroom shopping experiences appealing. (Acxiom) 16. 80 percent of retailers think that in five years time, most ecommerce retailers will have built immersive shopping experiences. (Acxiom) 17. The global chatbot market size is growing at a CAGR of almost 20 percent and is expected to be worth close to $5 billion by 2032. (Acxiom) 18. 83 percent of companies agree

using data and predictive analytics to improve the customer experience will be a key source of competitive advantage over the next five years. (Acxiom) 19. 50 percent of consumers have used generative AI tools (such as ChatGPT or Bard) in a personal context, and 22 percent have used them in a work context. (Acxiom) 20. 62 percent of organizations are aware of AI-powered recommendations – and 24 percent are currently deploying it. (Acxiom) 21. 54 percent of organizations are aware of AI-powered customer segmentation – and 17 percent are currently deploying it. (Acxiom) 22. 35 percent of consumers actually prefer to talk to a chatbot than a human customer support agent, yet only 15 percent of businesses are currently using AIpowered chatbots. (Acxiom) 23. 77 percent of customers know about conversational AI (like ChatGPT) being a prime opportunity for enhanced customer engagement and personalization. (Accenture) 24. 39 percent of people aged 18-34 are excited about conversational answers over standard internet searches.

(Accenture) 25. 29 percent of interviewed marketers view Web3 and gaming as most significant to their plans, up from only 10 percent a year ago. (Ogilvy) 26. 63 percent of marketers plan to use AI tools in their influence campaigns, with an additional 25 percent considering it. (Ogilvy) 27. 62 percent of consumers harbor concerns about generative AI producing false/ misleading testimonials or reviews, compared with 30 percent in April 2023.

(Capgemini) 28. Nearly 55 percent of Gen Z consumers have bought products recommended by generative AI tools.

(Capgemini) 29. 58 percent of users say generative AI should be able to identify their brand and product loyalty, thereby

recommending similar products. (Capgemini) 30. 26 percent of consumers have participated in metaverserelated activities in the last six months. (PwC) 31. 34 percent of consumers said they’d be attracted by in-store entertainment, 30 percent by immersive digital experiences, such as donning a virtual reality (VR) headset to try out new products, and 28 percent by being able to book appointments with a sales adviser or personal shopper.

(PwC) 32. Millennials (36 percent) and Gen Z (31 percent) are the top metaverse users. (PwC) 33. 56 percent of customers can think of an example of AI they use every day. (Salesforce) 34. 57 percent of customers trust companies to use AI ethically.

(Salesforce) 35. 69 percent of customers are open to the use of AI to improve their experiences.

(Salesforce)

6

Building Deeper Customer Relationships – Loyalty as a Lifeline In times of crisis, you need a way to encourage customers to keep shopping with you and to make them feel that you care for them. Since acquiring new customers costs five times more than retaining current customers, it’s even more important to focus on your existing clientele during times like these. Customers tend to expect more from the brands they choose during a recession.

They want to feel appreciated, DMN.CA ❰

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POINTS & PROGRAMS and trust that brands are helping them through the turbulent times.

Loyalty programs provide value to customers, which encourages them to stay with your brand. Mary Pilecki, VP, Principal Analyst of Forrester, called loyalty a lifeline for the inflation crisis for this exact reason, suggesting that loyalty programs greatly support businesses during times of recession.

1. 56 percent of companies view the role of customer loyalty as essential to overcome the inflation crisis and a potential recession. (Antavo) 2. 89 percent of respondents trust loyalty programs to help them overcome the inflation crisis and potential recession.

(Antavo) 3. 67.7 percent plan to increase their investments in customer retention in the inflation crisis and potential recession.

(Antavo) 4. 78 percent of consumers say they will be more loyal to companies that help them through this difficult time, for example, by prioritizing purchasing products or services from that company over others. (Capgemini) 5. Seven in 10 consumers expect companies to provide a wider range of discounts to help them purchase essential items, and to provide bigger discounts to loyal customers.

(Capgemini) 6. 88 percent of customers believe trust becomes more important in times of change.

(Salesforce) 7. 74 percent of customers say communicating honestly and transparently is more important now than before the pandemic. (Salesforce) 8. 96 percent of surveyed consumers intend to adopt cost-saving behaviors over the next six months. (PwC) 9. 81 percent of program owners confirmed that their loyalty program was helpful during the economic downturn.

(Antavo) 10. 31 percent of companies plan to invest more in acquisition during the economic downturn. 15 percent plan to invest less in acquisition.

(Antavo) ❱ DMN.CA

7

Driving Positive Impact – Supporting ESG Causes In recent years, one topic on marketers’ minds has been whether loyalty programs can do more than just boost sales. After all, the core purpose of loyalty programs is to change customer behavior. So why not use them to make a difference in the world? It can be a great way for businesses to demonstrate their commitment to social and environmental issues.

For instance, brands can give customers points when they contribute to noble causes, such as donating to charity or taking certain actions, like recycling. This can result in a tangible impact on the environment and society, which can benefit both the business and its customers.

1. 51 percent of companies plan to reward responsible behaviors. 52 percent plan to reward the purchase of ethical products, 48 percent plan to reward charity, 39 percent plan to reward living healthily.

(Antavo) 2. 78 percent of US consumers say that a sustainable lifestyle is important to them.

(McKinsey) 3. Brands that garner more than half of their sales from products making ESGrelated claims enjoy 32 to 34 percent repeat purchase rates (meaning that buyers purchase products from the brand three or more times annually). (McKinsey) 4. 16 percent of CMOs consider addressing regulatory environments (e.g. public health, climate, geopolitical,

privacy etc.) their top priority.

(Deloitte) 5. 51 percent of CMOs consider improving sustainability of internal marketing practices their number one priority, while 47 percent consider promoting more sustainable product and service offerings their number top priority.

(Deloitte) 6. 45 percent of CMOs consider establishing long-term sustainability commitments their top priority. (Deloitte) 7. 25 percent of CMOs consider nudging consumer action that promotes sustainability their top priority. (Deloitte) 8. 66 percent of customers have stopped buying from companies whose values didn’t align with theirs — up from 62 percent in 2020.

(Salesforce) 9. 88 percent of customers expect companies to clearly state their values. (Salesforce) 10. 64 percent of consumers buy directly from a brand. One of the top three reasons for doing so is because the brand offers sustainable products.

(Salesforce) 11. 57 percent of customers indicated that, in general, they are more loyal to brands that commit to addressing social inequities. (Deloitte) 12. 90 percent of Gen Z shoppers say they are more willing to purchase products that they deem beneficial to society.

(Deloitte) 13. 78 percent of people report being swayed by influencers to adopt greener practices.

(Ogilvy) 14. More than a third of consumers say environmental sustainability is important to purchase decisions, and more than 75 percent of these consumers are looking for environmentally friendly products and packaging.

(KPMG) 15. 50 percent of under 18 and 41 percent of Gen Z shoppers are most likely to say sustainability and social responsibility are important to purchase decisions. (KPMG) 16. 44 percent of consumers are willing to pay more for a product they think is more

sustainable. And 47 percent won’t make a purchase if they have concerns about a company’s environmental impact. (Acxiom) 17. 66 percent agree that sustainability is important to their organization’s marketing and customer experience strategy. (Acxiom) 18. 41 percent of the consumers say the environmental impact of a company is a key factor that influences their purchasing decisions.

(Acxiom)

8

The Present and Future Loyalty Landscape – Loyalty Program Statistics Over the years loyalty programs have become standard practice across all industries. By implementing a loyalty program, companies can increase sales, differentiate their brand, and achieve a sustainable competitive advantage. Although building a loyalty program that stands out is a major endeavor for any company, it can be a game-changing opportunity if created with care and precision. Success always lies in understanding the market and your customers.

1. On average, 16.2 people are actively involved in loyalty program management at their organizations, and 41 percent of businesses have a dedicated loyalty team leading the loyalty program, composed of employees from various departments. (Antavo) 2. 79 percent of respondents with an existing loyalty APRIL 2024

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POINTS & PROGRAMS program are likely to revamp their loyalty program in the next three years. This is a seven percentage point increase over last year.

(Antavo) 3. On average, the companies surveyed have invested or plan to invest $375K USD in the launch or revamp of their loyalty program. (Antavo) 4. 71 percent of program owners who have revamped their loyalty program in the past two years are satisfied with their new programs. (Antavo) 5. 7-13 months is the amount of time needed for 49 percent of respondents to revamp their loyalty programs. (Antavo) 6. 67 percent of companies revamped their loyalty program in the past two years have involved external resources for technology changes/upgrades. (Antavo) 7. 80 percent of companies who measure the ROI of their loyalty program reported a positive ROI, earning 4.9X more revenue than what they spend, on average. (Antavo) 8. 53 percent of companies planning to launch a loyalty program in the next two years will manage their program through an internal team.

(Antavo) 9. 53 percent of future program owners said they will handle technology-related changes together with an outsourced team, like a third-party technology vendor. (Antavo) 10. For respondents whose company will launch a loyalty program within the next two years, better customer engagement ranked highest on the list of reasons. (Antavo) 11. Around half of customers feel providing their data to brands is worthwhile if they receive ads based on their interests and online behaviors (53 percent), location (53 percent), and personal characteristics (47 percent), or if they receive personalized offers as part of a loyalty program (56 percent).

(Acxiom) 12. Customers value choice, along with cash back and earn/reward type benefits.

An impressive 73 percent APRIL 2024

are eager to engage now and looking to actively redeem.

(The Wise Marketer) 13. Paid programs are compelling to shoppers who regularly buy from a particular brand: 36 percent say the subscription services save them money in the long run, and 23 percent say they save time. (Forrester) [1] 14. 26 percent of US online adults say their membership in a loyalty program motivates them to use a retailer that they have purchased from before. (Forrester) [2] 15. 71 percent of US online adults say that instant discounts are an important reason for joining loyalty programs.

(Forrester) [3] 16. 91 percent of executives say their loyalty program should provide more rewards or benefits. (PwC) 17. 60 percent of consumers in Australia indicated that simply being a member of an organization’s loyalty program had prompted them to change their spending behavior in at least one of the following ways: increasing their purchasing frequency, more frequently choosing the organization over competitors, being more willing to recommend the brand to others, or being more willing to pay a premium for loyalty points or enhanced loyalty status. (McKinsey) 18. Top-performing loyalty programs are seeing up to 4x the benefits of other programs. Consumers were 10 percent more likely to shop with an organization with a top loyalty program, 14 percent were more likely to increase frequency of purchases, and 12 percent were more likely to recommend the brand to others, when compared with results for bottom quartile programs. (McKinsey) 19. Familiarity with loyalty programs varies widely across industries, from 30 percent for airlines to 75 percent for transportation apps.

(McKinsey) 20. Grocery and retail loyalty programs are the most

frequently used, with 70 percent of Australian consumers reporting using their grocery loyalty program almost every time they shop.

(McKinsey) 21. Of the top five most valued features in a loyalty program, four refer to a customer’s ability to redeem points for products. Gamification also made the top five— demonstrating the value of an exciting user experience for consumers. (McKinsey) 22. 43 percent of customers prefer a loyalty program that has flexibility in rewards. (PwC) 23. 55 percent would use loyalty programs more if the rewards were personalized and better reflected their individual needs. 55 percent would use programs more if rewards applied to multiple brands.

(Salesforce) 24. 56 percent of loyalty program owners are satisfied or very satisfied with their loyalty program. (Antavo) 25. 60 percent of loyalty program owners have made significant changes to their program in the past two years, a 3.3 percentage point increase from last year. (Antavo).

26. 64 percent of those who revamped are satisfied or very satisfied with the loyalty program. (Antavo) 27. 65 percent of program owners classify their loyalty program as more rational than emotional. (Antavo) 28. 15 percent describe their program as more emotional than rational, while 20 percent claim that their program is well-balanced between the two. (Antavo) 29. 52 percent of respondents who plan to launch a loyalty program in the next two years envision it as more emotional than rational. (Antavo) 30. 50 percent of rewards are redeemed on average in a loyalty program. (Antavo) 31. 78 percent of businesses offering a loyalty program currently run a free loyalty program. On the other hand, 22 percent offer premium or paid loyalty programs.

(Antavo) 32. 26 percent of companies

stated that they wish to introduce some form of premium loyalty program in the next two years. 23 percent of future program owners said that they haven’t decided.

(Antavo) 33. 48 percent think premium loyalty programs have a positive impact on customer retention and satisfaction.

(Antavo) 34. 43 percent think premium loyalty programs pay off.

These respondents said the benefits are GREATER than the costs. (Antavo) 35. The average annual activity rate across loyalty programs is 59 percent. (Antavo) 36. The average annual spend of members who redeem rewards is 3.1 times more than the annual spend of members who don’t. (Antavo) 37. The average annual spend of members who redeem personalized rewards is 4.3X higher than those who redeem non-personalized rewards.

(Antavo) The Bottom Line After reviewing the latest customer loyalty, loyalty marketing, and loyalty program statistics for 2024 and beyond, you now have all the necessary metrics to bolster your loyalty business case. In a market flooded with options, businesses must elevate their strategies to remain prominent in customers’ considerations and keep them from opting for a competitor.

Prioritizing customer experience and personalization, alongside nurturing emotional loyalty, enables companies to create a strong bond with their customers, fostering ongoing loyalty.

Are you interested in exploring the launch or revamp of a loyalty program with an expert? Feel free to reach out to Antavo’s team to discover how our technology can make your loyalty program dreams come true. Simply book a demo or include us in your RFP. And don’t forget to download Antavo’s Global Customer Loyalty Report for trends that are shown through the eyes of loyalty program owners!

BARBARA KEKES-SZABO is a Loyalty Program Specialist at Antavo.

DMN.CA ❰

// 18

MARKET RESEARCH

Emerging Trends in Canadian Consumer Packaged Goods From eCommerce to AI and Sustainability

❱ DMN.CA

APRIL 2024

// 19

MARKET RESEARCH

BY JOE LYONS-RISING

T

he Consumer Packaged Goods (CPG) industry in Canada is witnessing big changes. As we move ahead, let’s unravel the significant trends shaping the future of CPG in Canada.

AI and Machine Learning (ML): Unleashing Potential Embracing AI and Machine Learning is the way forward. These technologies offer the ability to dissect large data sets and make insightful decisions.

Retailers are harnessing AI to reimagine flyer ad permutations, with Canadian firms like Daisy Intelligence leading the charge. Meanwhile, Category Management Planogramming is seeing transformative gains in efficiency and insight acceleration, thanks to AI-driven technologies from Shelfgram and Hivery.

Amidst the ubiquity of AI tools like ChatGPT, Google Bard, and Microsoft’s Copilot, CPG players are crafting bespoke, secure internal solutions to navigate data privacy concerns, enabling them to leverage AI’s power safely. This strategic integration heralds a new era of advanced data analysis, although the nuanced craft of Fact-Based Storytelling remains a human-driven domain, with AI serving as a powerful accelerant. Stay up-to-date on these trends and the latest technologies to gain a competitive edge in the market.

ISTOCK/OSELOTE

eCommerce: Beyond the Pandemic Surge eCommerce has experienced unprecedented growth in the CPG sector.

With the pandemic-triggered surge in online shopping since 2020, it has become critical for Canadian CPG companies to streamline their eCommerce platforms and enhance their online customer journey.

It wasn’t too long that eCommerce food sales in Canada only accounted for roughly 3 percent of all channel volume, followed by an unprecedented channel growth as we historically shifted our purchase online, finally trusting grocery chains to pick quality produce for us (which our household was already doing since 2013) Now that eCommerce across has swept its brush across all categories, the fun and innovation can really start to take off.

APRIL 2024

Importance of an Omnichannel Approach: Although the majority of Canadians still prefer to do the majority of their CPG shopping in-real-life (IRL for the cool kids) at Brick & Morter stores with other humans and the ability to touch, smell and view products, an Omnichannel approach is critical for the success of brands and retailers.

Recently I had the opportunity to do a

post-webinar debrief with Brenda Gouin from Field Agent Canada. The Field Agent and Walmart Canada - Ratings & Reviews Webinar, took place on January 25th, 2024, and discussed the importance of Ratings & Reviews with Walmart’s Shariq Hasan in a town hall format, including a full range of Walmart vendors.

One of the key insights was that 93 percent of shoppers will read online product reviews on Walmart.ca before making a purchase, with the sweet spot being at least 50 ore more authentic reviews on the site, to maximize sales conversion lifts.

Also, 60 percent of shoppers noted in this webinar are shopping with their smart phones, doing their own research when at the shelf. Me included! QR codes in on product packaging and in-store trade marketing that link to associated online content and landing pages can help brands and retailers take advantage of this trend.

Voice Shopping: Who else has a BFF in their homes named Alexa? Or maybe its “Hey Google”? Apart of being my personal DJ for kitchen dance parties, providing my daily news and weather updates, and the unexpected AI humour, voiceactivated shopping is a growing trend. As smart speakers take on the role of virtual shopping assistants, they can help simplify the path to purchase, making it possible for shoppers/consumers to order items with little effort by speaking to their in-home devices. Certain CPG brands have been leading the way in this space for a few years, such as P&G to refill Tide products, etc., yet there remains an incredible amount of opportunity for more branded CPG connection to voice shopping to convert brand sales, especially with online CPG retailers beyond Amazon.

see more AR and VR technology rolled out by retailers and CPG brands. As they wait for younger millennials and Gen Z to carry more purchase power and industry impact.

Guess how our youngest daughter wants to celebrate turning 8? A VR video game party at the mall, as she will officially be old enough to play the games.

Health & Wellness: Evolving Consumer Preferences Data-driven insights are enabling CPG brands to comprehend consumer attitudes towards a healthier lifestyle, empowering them to develop and promote healthconscious products.

Reflecting on my CHFA NOW East show experience in September 2023, the trend towards integrating health, wellness, and ethical consumption within the CPG industry is undeniable.

Brands like Purplesful Snacking Popcorn, Cafézia, and Deebee’s Organics are at the forefront, merging product quality with social responsibility. These brands embody a shift towards products that not only promote physical well-being but also contribute to societal good, showcasing a holistic approach to health.

Augmented Reality (AR) and Virtual Reality (VR): Although Meta’s VR hasn’t taken off the way that Mark Zuckerberg had initially dreamed of for the “Metaverse”, it doesn’t meant that this technology is going away. There is a lot of exciting work and innovation happening in the Augmented Reality (AR) and Virtual Reality (VR) space for CPG Retailers. This would allow shoppers to visualize products in their own space (AR) or simulate an in-store shopping experience from their homes (VR). Geez, do I wish that VR shopping was available during the isolating times of the pandemic!

Sustainability: A Commitment to the Planet Sustainability is increasingly becoming a top priority, with brands taking significant strides to minimize waste and evolve environmentally sustainable products and packaging.

At the CHFA NOW East show, the commitment to sustainability was vividly on display. The Unscented Company, distinguished by its B Corp certification, highlighted the industry’s drive toward planet-friendly products. In a similar sustainable commitment, Humble Potato Chips debuted compostable chip bags, setting a new benchmark in packaging innovation. Beyond this we are now seeing larger-scale sustainability efforts, such as Loblaw and Walmart’s adoption of Tesla semis for more eco-friendly logistics.

These initiatives, led by enthusiastic social entrepreneurs, B Corps and purpose driven organizations, such as Deebee’s Organics’ dedication to social responsibility, underscore how consumer demand for sustainability is driving brands to adopt more holistic and innovative approaches to environmental stewardship.

But just the general population’s scepticism of the Metaverse, AR and VR are challenged by slow adoption rates across the masses, especially in a time of increased costs every where we turn. As the costs become more scalable, and not just geared for early adopters, I do believe that we will

JOE LYONS-RISING is the Founder and Chief Empathy Officer at Data Gives Back Inc., a B Corp Certified corporate training company dedicated to empowering professionals in the CPG and Food Service sectors. With over 20 years of experience in insights, analytics, and category management, Joe has trained more than 500 professionals, leveraging the power of data for community good.

DMN.CA ❰

// 20

TECHNOLOGY

Are Women Right to be Wary of Artificial Intelligence?

T

BY KATE BRAVERY AND RADHIKA PUNSHI

he future of human-machine teaming holds a great deal of potential. But with great power comes great responsibility.

The question is, who has a grip on it?

AI is evolving at a rapid pace. To inspire inclusion and invest in women, businesses and leaders should consider the impact AI will have on the future of work. It could light the way or cast a shadow on progress; the responsibility sits with all of us.

ISTOCK/WANLEE PRACHYAPANAPRAI

Women are walking a technological tightrope Time and time again, we’ve seen women — and other vulnerable and/or under-represented groups — burned by technological innovations. Consider, for example, experimental algorithms that screened out women’s CVs because they were trained using a higher proportion of men’s CVs. The painful truth is that, if women aren’t co-pilots of the current AI revolution, they may be left in the dust, faced with technology that presents a whole series of new barriers for them to overcome.

Crucially, female representation in the development of AI still has a long way to go. Women still only make up just 26 percent of the industry, and, even when they get their foot in the door, they’re more likely to face discrimination and are 65 percent more likely to be made redundant than men.

Businesses lose approximately 50 percent of women at each stage of the career ladder from entry level to senior leadership roles.

Women’s representation in the labour force took a hit during the pandemic, and the adoption of AI in jobs where women are overrepresented could exacerbate this trend. This threatens a double whammy that could leave significant gaps in the representation of women at all levels.

As we accelerate towards the age of AI, it is becoming increasingly evident that we must address risks around gender bias and inclusion. Businesses will need to work hard to shift mindsets and behaviours to drive cultural change, so women, under-represented and minority groups aren’t left behind in this rapidly evolving digital world.

❱ DMN.CA

Will AI bring wins or losses AI is set to disrupt and eliminate, as well as create, jobs, and women are among those predicted to be hit hardest by these changes. Why? Because women hold more of the jobs expected to be disrupted by AI and so will be more adversely impacted (as 54 percent of executives pointed out in this year’s Global Talent Trends study).

For example, the administration, healthcare, education and social services industries all have high proportions of women. They are APRIL 2024

// 21

Resource Directory 10-1634-DCM-Resource Directory-OL.pdf

DATA ANALYTICS

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TECHNOLOGY among the sectors most likely to experience widespread job losses due to AI and automation. In fact, the World Economic Forum predicts that by 2027 there will be 26 million fewer jobs in roles such as administrators, cashiers, payroll clerks and secretaries.

This cutting of women’s jobs could have a knock-on effect on their ability to thrive into old age, exacerbating the 40 percent pension equity gap that already exists. Women are already worried: Insights from our 2024 Global Talent Trends study show women are less likely than men to trust their organization to provide them with a new job or alternative career if their role is eliminated.

Women in danger of falling behind Our research suggests that women are more wary of technology than men and therefore less likely to try new technology at work (60 percent vs 64 percent). This is concerning given technological literacy is in the top five skills increasing in importance for businesses. In part, this comes down to their psychological safety in the workplace (84 percent of men feel this versus 80 percent of women). Women’s leaning towards hybrid roles where vicarious learning can be more limited may also be a factor (38 percent of women prefer hybrid working versus 34 percent of men).

Mercer Talent Enterprise research also found that women generally find ambiguity, change, resilience and agility more challenging than men. In addition, women are less confident that their skills can be deployed/transferred to new jobs. They are also more likely to underestimate their skills and capabilities. This causes some women to hold back from taking up new opportunities.

As a result, there is a real risk that women will fall behind. They therefore need to be provided with opportunities, training and encouragement to help them embrace new technology.

The good news is that, on average, studies show that women tend to score higher than men in critical attributes related to social and emotional intelligence, including compassion, collaboration and empathy. ❱ DMN.CA

These are attributes that could become more important as we seek to balance automation with humanization in the workplace.

Indeed, empathy is among the World Economic Forum’s top ten skills of the future.

The potentials and pitfalls of an AI-driven future of work AI and automation will undoubtedly bring positive changes to the way we work. Our research suggests that across 10 key markets, generative AI could add US$1.3 trillion to the global economy annually between 2025 and 2035. On average, it will save 36 workdays a year.

This new technology will reduce time spent on tedious and repetitive work (which currently take up about a third of employees’ time). It will also help optimize the 26 percent of time currently spent on creative and/or challenging work.

For women, who are generally saddled with “office housework” tasks (such as writing meeting notes), this could be a gamechanger. It could help address the fact that women are less energized at work than men (a difference of four percentage points) and are less likely to feel they are thriving (a five percentage-point difference).

With AI and automation offering the gift of time, women may be able to focus on more value-adding and visible tasks, such as networking, upskilling and reskilling (less than a fifth of work time is dedicated to this currently). They could also spend more time on internal gigs that pave the way for new career opportunities (currently, employees spend only 16 percent of their time on this). Increased productivity may see the four-day week, job-sharing, or alternative schedules become more common. These changes could be a win for many, especially women returning from a career break or maternity leave.

AI is already accelerating the transition to more skills-powered organizations and taking out identifiers that previously allowed bias to disadvantage women.

However, AI requires equitable data to base such strategic decisions on. Unfortunately, differences in how women and men share and validate their skills poses a challenge in this area.

Burnout affecting all genders Interestingly, there are no statistically significant differences between genders in terms of burnout rates.

Over 80 percent of employees report they’re at risk of burnout this year, citing financial strain, exhaustion and workload as the three biggest problems. Men are more likely than women to report feeling overwhelmed by too many technological tools and platforms (a 4 percent percentage point difference), which is perhaps another sign of women being less engaged with this technology.

around which roles could be filled internally and which could be hired in. Take diversity, equity and inclusion metrics into account during any reduction in force or merger and acquisition (M&A) activities.

Realizing the potential of AI The potential of AI and automation will only be fully realized if: ❯ The productivity gains they promise are equitably distributed. ❯ AI is responsibly managed. ❯ Data is used to nudge leaders towards fair opportunity and pay decisions.

What lies ahead?

Alongside the actions above, experts and businesses must continually critique AI to ensure that it is making everyone’s working lives easier, by: ❯ Monitoring any adverse impacts ❯ Keeping humans at the centre of the decision-making process ❯ Ensuring that AI convergence uncovers, rather than masks bias

To make these scenarios a reality, employers can consider the following issues and actions: Insight is power: Know the rate of progression for women at each level of your business. Pick apart any inequities in pay, health and opportunities, and interrogate the reasons behind why (and which) women leave the business or why their careers stagnate. Arm women with insights into their capabilities, and highlight any learning gaps that are critical for promotion.

Embed inclusion and belonging into leaders’ DNA: Consider using trusted AI-driven tools to improve decision-making vigilance. When properly managed, these tools can play a role in supporting managers to make decisions surrounding equitable hiring, off-cycle pay adjustments and/or the allocation of special projects.

Improve tech literacy: Encourage women to lean into a digital-first culture and build their AI knowhow. Tackle toxic work cultures, target learning interventions, and intentional work design to create sufficient space to learn.

Build a brand around employability: Set guidelines

Sponsor women’s careers: Ensure women have sponsors who advocate for their career advancement (rather than mentors who primarily share knowledge and guidance). Actively build career paths for women whose jobs are likely to be displaced, so they can move into roles that have growth potential.

On the global stage, new laws and protections are needed to ensure that AI acts as an enabling tool for women’s success. When handled with foresight and a critical eye, AI has the potential to reduce bias and improve work through productivity gains. This has the potential to free up space for women’s career progression.

These positive effects can go even further, nudging women to make smarter decisions that benefit their health, wealth and career outcomes (e.g., through enhanced AI-driven predictions).

AI offers the potential to personalize total rewards. It can also pool insights and learnings that businesses can use to make work more rewarding.

If we stay aware of its risks and limitations, the intentional use of AI and other emerging tech could mark a new beginning. This offers a future of more fulfilling, empowering work, along with abundant opportunities for women to undertake personal passion projects and lifelong learning.

KATE BRAVERY is a Senior Partner and Mercer’s Global Advisory Solutions & Insights Leader and Radhika Punshi is an Organizational Psychologist, Co-Founder and Managing Director at Mercer Talent Enterprise.

APRIL 2024

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124 SOCIAL VULNERABILITY INDEX*

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