DM Magazine January 2025

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Time for Loyalty Package Goods Trends 2025: and a Loyalty Customer Embrace Retention PM 4 0 0 5 0 8 0 3

VOL. 38 • NO. 1 • JANUARY 2025

THE AUTHORITY FOR THE DATA-DRIVEN BUSINESS

THE B2B JOURNEY: Interview with Jim Tincher

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Vol. 38 | No. 1 | January 2025

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Talking Points

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

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CONTRIBUTING WRITERS Vicki Hyman Nasser Sahlool Francesca Nicasio Richard Schenker Sara Rabolini Stephen Shaw

The B2B Journey: An Interview with Jim Tincher, President, Heart of the Customer

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Top 10 Payments Trends Affecting Marketing for 2025 and Beyond

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Loyalty Trends 2025: What’s Next for Customer Retention

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LG conducted the survey to support and understand the nature of happiness, aligning with its brand philosophy, Life’s Good. The results are part of LG’s broader effort to assess the potential and influence of optimism globally, reflecting the company’s commitment to enhancing consumer optimism.

The survey also reveals key aspects of generational attitudes towards optimism.

Optimism and happiness both decrease with age, although the latter was found to reduce at a slower rate. Interestingly, despite younger age groups averaging higher rates

Optimism your feed

“As a brand that is passionate about spreading optimism, we strive every day to be the most customer-focused we can possibly be.” said Kim Hyo-eun, vice president and head of LG’s Brand Management Division. “Consumers want tools to feed their optimism and belief in the future, and providing this is a key part of LG’s mission. That is why we launched our ‘Optimism your feed’ campaign, which empowered users to pull more optimistic content into their social media feeds. The campaign has been proven to help consumers boost positive feelings, with 78 percent of people saying they felt more optimistic after seeing the campaign versus before exposure.”

LG Electronics is a global innovator in technology and consumer electronics with a presence in almost every country and an international workforce of more than 74,000.

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Ryane Askew

According to the latest research by LG Electronics (LG), 48 percent of worldwide consumers say they are more optimistic now than they were compared to six months ago.

The survey, conducted across 16 markets, provides extensive data on global optimism, its drivers and the demographics that feel the most optimistic and happy. The global average optimism score is 7.49/10. France, the UK and Australia were revealed to be among the least optimistic countries, scoring 14.5 percent below the average. Conversely, Saudi Arabia (12 percent above), India (10.8 percent above) and the UAE (8.1 percent above) were the most optimistic. Consumers were most optimistic about their personal growth and development (69 percent) and family dynamics (66 percent), but least optimistic about their finances.

Entertainment, including movies, TV, music and art, was identified as the most significant factor driving optimism (60 percent), followed

by AI (56 percent). Less than half of the respondents chose social media (48 percent), while international crises such as war generated the least optimism. ❱ DMN.CA

of happiness and optimism, individuals under 18 reported some of the lowest scores.

Additionally, 50 percent of Gen Zs expressed that optimism can be harmful, the highest of any age group. This caution may be due to their life stage, as Gen Zs were twice as likely to disagree about having the tools needed to succeed (16 percent) compared to millennials.

The Role of Social Media

Younger age groups are more likely to search online for positive content and like-minded people to improve optimism. 86 percent of consumers say social media impacts their personal lives, more than those who believe it impacts society (67 percent). Gen Zs are also more likely to talk to a therapist, indulge in shopping or take drastic actions to counter negativity, such as deleting a social media account.

In contrast, older groups tend to seek offline comforts, such as spending time outdoors, seeing family or engaging in hobbies. Younger people appear more willing to seek external methods to boost optimism and happiness compared to their older counterparts.

INDOCHINO, the global leader in made to measure apparel, revealed its strategic focus on brand development as a key driver for growth in 2025.

The company is committed to expanding its presence in the retail industry by enhancing its brand story and customer journey. In line with this ambition, INDOCHINO has appointed Ryane Askew as the new Vice President of Marketing, a move that signals the company’s commitment to deepening its connection with consumers and accelerating its growth trajectory.

“INDOCHINO has experienced remarkable growth over recent years, and we are now entering a new chapter where brand development will be central to our continued success,” said Drew Green, Chief Executive Officer, and President of INDOCHINO. “Ryane Askew brings a wealth of experience and a forward-thinking approach to marketing, making her the perfect fit to lead our efforts in shaping the future of the INDOCHINO brand. We are confident that her leadership and deep understanding of analytics and data will help us forge deeper connections with JANUARY 2025

// 5 our customers and bring our vision to life in a bold and compelling way.”

Askew is a seasoned and dynamic growth leader with over 15 years of experience delivering impactful growth for globally recognized brands. Her most notable results during her time at Pier 1 Imports, Blue Nile, and Nordstrom were driven by a customer focused leadership style. Throughout her career, she built and scaled high-performing teams across a variety of functions, including marketing, e-commerce, analytics, and technology.

Askew said, “The INDOCHINO brand has always stood for quality, craftsmanship, and personalization, and I look forward to leading the team in building a stronger connection with our customers. Together, we will elevate the brand experience and create new opportunities for growth as we approach 2025 and beyond.”

As INDOCHINO looks toward the future, the company’s focus on brand development is expected to encompass a variety of initiatives, including refining its digital presence, expanding marketing efforts across channels, and enhancing the overall customer journey.

With the appointment of Askew, INDOCHINO is confident that these initiatives will not only strengthen its position in the market but also solidify its reputation as a leader in custom apparel.

As the global leader in made to measure apparel, INDOCHINO has developed the shopping experience of the future. Born out of the belief that you don’t need to spend a fortune on a custom wardrobe, INDOCHINO was the first company to disrupt the retail sector by making perfect-fitting, personalized apparel on a mass scale.

Customers take on the role of designer, picking out every detail of their garments to make them truly one-of-a-kind. Each custom item is made to the customer’s precise measurements and shipped to their door, hassle-free. The company’s omni-channel approach allows them to shop online or in person at any INDOCHINO showroom.

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Kantar Group, the global market research company based in London and portfolio company of Bain Capital, announced the proposed sale of Kantar Media to H.I.G. Capital, a leading global alternative investment firm with $67 billion of capital under management.

The contemplated deal will mark a new chapter for Kantar Media as it embarks on an exciting phase of growth and innovation, with a renewed focus on delivering cutting-edge insights to clients across the content and advertising landscapes.

The proposed acquisition by H.I.G. Capital, a firm known for its hands-on approach and JANUARY 2025

successful track record of accelerating business growth, comes at a pivotal moment for Kantar Media. The company, which operates in over 60 markets, is uniquely positioned to shape the measurement ecosystem with a broad portfolio of solutions that spans audience measurement and data analytics as well as media planning and validation.

Kantar Media CEO, Patrick Béhar will continue to lead the business. “Over a year ago, I joined Kantar Media from Sky to accelerate the transformation of Kantar Media into an agile, technology-centric company, shaping the measurement industry through advanced cross-media solutions.

This transaction would give us the resources and support to further accelerate our growth trajectory and strengthen our position as the global leader in media measurement and analytics. With H.I.G.’s expertise in scaling businesses and driving performance, we are more confident than ever in our ability to deliver innovative, data-driven solutions that meet the evolving needs of our growing client base all over the globe. Today is a fantastic moment for Kantar Media, its teams, its partners and its customers as we embark with H.I.G onto the next stage of our transformation”.

“We are excited to partner with Patrick and his talented team,” said Nishant Nayyar, Managing Director at H.I.G Capital. “Kantar Media has a long-standing reputation for delivering essential data and trusted insights to the global media industry. We are confident that as an independent business under the leadership of Patrick, the company will continue to thrive and lead the way in media measurement and analytics innovation”.

Chris Jansen, Kantar’s Chief Executive, added, “We set up Kantar Media to be operationally independent in 2023, to allow it to consolidate its global leadership position in audience measurement. Today’s proposed partnership announcement with H.I.G. Capital positions Kantar Media to continue its investments in technological and geographical leadership and we wish Patrick and his team the very best for the future.

Following the proposed sale, Kantar will be even more focused on helping both global and local brands to grow through a unique combination of IP, data assets, and increasing the rapid deployment of AI. Kantar remains the world’s leading data and marketing analytics company.”

The transaction’s purchase price of approximately $1 billion is anticipated to be primarily paid in cash, along with certain non-cash consideration, including separationrelated investments by H.I.G. Capital, and an earn-out. Subject to customary legal and regulatory requirements and completion of information and consultation processes with employee representatives where necessary, the proposed transaction is expected to close

later this year.

Kantar Media is a global leader in media measurement and analytics, providing clients with comprehensive insights into audience behaviour, advertising effectiveness, and media consumption patterns. With a deep understanding of the global media landscape, Kantar Media offers data-driven solutions that help brands, agencies and media owners optimize their marketing strategies and drive measurable results.

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Rokt, a global ecommerce platform unlocking real-time relevancy in “the moment that matters most”, announced a US$300 million investment in mParticle, a leading customer data platform (CDP), to create an unparalleled offering to unlock real-time relevance across ecommerce, advertising and customer experience.

This partnership combines Rokt’s expertise in bringing relevance to ecommerce transaction moments with mParticle’s real-time CDP, enabling businesses to unleash the potential of their customer data. Rokt will double the total investment into the CDP and accelerate innovation and delivery of mParticle’s product roadmap.

The company also partnered with Best Buy Ads Canada ahead of the holiday season to deliver curated transaction experiences to the company’s online customers. Best Buy Ads Canada uses Rokt’s technology to power highly relevant messages from thirdparty brands, whose products and services the company does not directly sell itself, on the confirmation page of the BestBuy.ca ecommerce site.

“Across billions of ecommerce transactions, we have seen joint clients achieve much better consumer and business outcomes when using mParticle – up to 50 percent better,” said Bruce Buchanan, CEO and cofounder of Rokt. “This merger will enable us to bring a significant performance lift to all of our clients. We are thrilled to join forces with the mParticle team to accelerate bringing our vision to life, enabling everyone to unlock the moments that matter most.”

“Our mission at mParticle has always been to simplify the complexity of customer data management and empower multi-channel brands to create meaningful connections with their customers across any screen,” said Michael Katz, CEO of mParticle. “Bringing mParticle and Rokt’s capabilities together will offer the best of both worlds — a new class of solutions where customers can activate their data in real time to immediately impact business outcomes while maintaining complete ownership and control over their customer data assets.”

The combined entity will ensure that brands continue to maintain complete DMN.CA ❰

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control of first-party data, aligned with both companies’ commitment to set the standard for data privacy and compliance. As part of the merger, the mParticle founders will all remain in the business — Michael Katz will continue to be CEO of mParticle, Andrew Katz will become Chief Technology Officer of Rokt to lead innovation and data security across all products, Jason Lynn will remain Chief Product Officer of mParticle, and all three will join the Rokt executive team.

The merger follows a year of significant growth and new initiatives for Rokt, including accelerating revenue growth by more than 40 percent year over year, to US$600 million.

At the start of 2024, Rokt announced the acquisition of AfterSell and the launch of its new generative AI tool, ACE, which helps advertisers maximize their return on ad spend. In addition, Rokt announced key appointments to its executive leadership team in 2024, including Jacqueline Purcell as Chief Financial Officer and Claire Southey as Chief Product Development Officer.

Rokt’s AI and ML-powered Rokt Brain and ecommerce Rokt Network will power more than 6.5 billion transactions connecting 400 million customers across the world’s leading companies, including Live Nation, Macy’s, AMC Theatres, PayPal, Uber, Hulu, Staples, Albertsons and HelloFresh. Rokt has achieved consistent annual growth of more than 40 percent across the past decade, driven by its unique partnership model that returns $7 from every $8 of value back to partners.

Rokt is headquartered in New York City. The company has offices in 10 global locations and serves clients throughout North America, Europe and Asia-Pacific, solidifying its position as a key player in the global ecommerce ecosystem. mParticle is the choice for multichannel consumer brands who want to deliver intelligent and adaptive customer experiences in the moments that matter, across any screen or device, working with leading global brands like HBO Max, Marks & Spencer, JetBlue, SoFi and more. mParticle’s predictive capabilities help Marketing teams achieve performance at unmatched scale while meeting the Data ❱ DMN.CA

teams’ requirements around composability and data governance. Founded in 2013, mParticle is headquartered in New York City with employees around the globe.

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Yellow Pages Limited, a leading Canadian digital media and marketing company, announced the winner of its nationwide art competition “Our Cover, Your Canvas”. The theme of the competition was Discover, Shop & Support Your Local Community.

“We were overwhelmed with the number of entries we received as well as the quality and talent of these submissions. The emotional connection that these artists feel toward their local communities and the businesses that are the backbone of Canada was evident through their pieces of art. We could not be prouder to be showcasing beautiful artwork on our 2025 cover,” said Sherilyn King, Senior Vice President of Sales, Marketing, and Customer Service at Yellow Pages. “Thank you to all those who submitted pieces and sincere congratulations to Brenda Turnour as the first winner of our 2025 Yellow Pages Directory Cover Competition.”

Brenda Turnour is a fourth-generation artist who sold her first oil painting at the age of 12 and since then has been painting, teaching and judging art. She is a past President of the Central Ontario Art Association. Brenda owns a gallery and studio in Huntsville, Ontario.

Additionally, we would like to recognize Shannon Delaney and Sophie Paisley at Ladysmith Arts in British Columbia, www. ladysmitharts.ca, for the cardboard collage submitted by their elementary school students. This mural was created by an amazing group of students between six and eight years of age to celebrate their community of Ladysmith, BC. It captures some of the features that they think best represent their town. Pictured here, from left to right are Zoë, Parker, Olive, Gavin and Kacen. Missing from the photo are Xavier and Magnus.

Prize: With nearly six million Yellow Pages directories distributed throughout Canada, Brenda will have her artwork featured on the front cover of selected Yellow Pages print directories starting in January 2025 through June 2025.

The deadline for entries for directory covers in the second half of 2025 is still open. Artists across the country are encouraged to send their submissions by April 30, 2025 at 11:59 pm EST. www.ypsolutions.ca/submissions Given the overwhelming success of this first nationwide directory cover competition, Yellow Pages now invites you to participate in our competition for the 2026 cover. See your

local 2025 Yellow Pages’ directory for the details.

Yellow Pages is a Canadian digital media and marketing company that creates opportunities for buyers and sellers to interact and transact in the local economy. Yellow Pages holds some of Canada’s leading local online properties including YP.ca, Canada411 and 411.ca. The Company also holds the YP, Canada411 and 411 mobile applications and Yellow Pages print directories.

JANUARY 2025

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Retail Trends 2025: The Top 10 Trends Retailers Should Know

BY FRANCESCA NICASIO

A

s we settle into the new year, you might be wondering what’s in store for your retail business in 2025. How will consumers behave in the coming months? Which tools or technologies should you invest in?

While no one can predict with 100 percent certainty what lies ahead, we can make educated guesses based on what the market and data are telling us.

This article sheds light on the top retail trends expected to shape 2025 JANUARY 2025

and how you can prepare for them.

We cover: ❯ In-store shopping still going strong ❯ Retailers will go beyond integrated payments ❯ The rise of AI-driven merchandising and assortment planning ❯ Retailers will increasingly consider subscription models ❯ Get ready for loyalty and customer marketing 2.0 ❯ Retailers will invest in practical (not sexy) retail tech

The pre-loved market is still flourishing ❯ Free shipping and deals will continue to drive purchase decisions ❯ Consumers are open to tipping retail workers ❯ Retailers take more action to promote sustainability ❯ Grow your retail business. ❯

Streamline inventory, suppliers, teams and stores with an all-inone platform. From intuitive POS and stock management features to

powerful reporting, those kinds of systems give you the tools you need to grow.

In store shopping is still going strong Shoppers have spoken: they still prefer brick and mortar retail for many of their purchases.

Lightspeed’s State of the Retail report, which surveyed more than 2,500 consumers, found that 56 percent of US shoppers and 64 percent of Canadians do most of their shopping in person, with DMN.CA ❰

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MARKET RESEARCH little variation depending on ages, gender or income level.

According to the survey, customers choose to shop in stores for every retail category except books, toys and hobbies. This preference for in-person shopping reinforces the importance of tangible experiences that online shopping can’t replicate.

But don’t just take our survey’s word for it—commercial real estate data also shows similar trends.

The investment management firm Colliers reports that in 2024, “retail occupancy rates, excluding malls, have reached a decade-high of 95.6 percent, underscoring the stability and resilience of retail spaces, especially in the SingleTenant Net Lease market.”

Retailers will go beyond integrated payments Consumers want shopping to be fast, easy, and convenient — and this sentiment extends to the checkout process as well.

In addition to giving customers a great experience as they’re browsing your store and selecting products, you also need to ensure that their payment experience is top-notch.

This is where embedded payments come in.

Embedded payments means that the merchant’s payment capabilities are built directly into retail systems, enabling a smoother and more efficient checkout process. Unlike ❱ DMN.CA

integrated payments, which rely on third-party systems, embedded payments are natively built into a retail platform. That way, retailers can reduce friction, streamline operations and offer a more cohesive customer experience.

Expect embedded payments to continue gaining momentum in 2025, as retailers aim to optimize every step of the shopper journey.

The rise of AI-driven merchandising and assortment planning Artificial intelligence has a wide range of applications in retail, from customer service to demand forecasting. In 2025, merchandising and assortment planning are two of the biggest areas AI is expected to transform.

That’s because AI can analyze vast amounts of data to identify trends, optimize inventory across multiple stores and tailor offerings to local demand.

Coresight Resarch’s AI for Merchandising Report, Analyst Vijay Doijad writes: “Retailers face various complexities when managing assortments across different stores, necessitating hyperlocalized strategies to meet the diverse needs of local consumer segments, as traditional methods often fail to account for variations across regions.”

He continues, “AI helps retailers unify data sources and adapt product assortments to localized demand patterns, significantly improving sales opportunities and reducing stockouts.”

With that in mind, we foresee a growing reliance on AI tools to improve merchandising and operational efficiency in 2025 and beyond.

Retailers will increasingly consider subscription models With their spending power expected to reach $12 trillion in 2030, Gen Z (aka Zillennials) is a generation that retailers should pay attention to. In the same vein, Millennials continue to capture a significant share of consumer spending, with 22.5 percent of spending power, while representing 22.9 percent of the population.

One thing that these two generations have in common is their preference for subscriptions.

Lightspeed’s State of Retail report shows that Gen Z and young Millennials were the demographics most likely to be subscribed to a retail membership (like Amazon Prime) with 77 percent saying they were subscribed to one or more services.

What’s more, 19 percent said they exclusively shop from retailers they have subscriptions with.

This tells us that subscriptionbased models foster customer loyalty and can drive recurring revenue for retailers in 2025.

That’s why if it makes sense for your business, consider weaving in subscriptions into your offerings.

Get ready for loyalty and customer marketing 2.0 Speaking of which, gone are the days when being part of a loyalty program simply meant having a punch card and earning points for purchases. Today, the best loyalty programs combine multiple elements — including rewards, gamification and exclusivity —t o capture and keep customer loyalty.

The fitness brand Alo, for example, has a loyalty program called Alo Access that’s packed with everything from gifts and rewards to members-only experiences.

Alo Access is a three-tiered program, and members at the highest tier can unlock even more perks, like priority customer support and access to a private

Instagram account.

It’s also important to note that the best loyalty programs are datadriven. With second- and thirdparty data becoming increasingly restricted, it’s more important than ever to double down on firstparty — i.e., information that customers provide to you directly.

Forward-thinking retailers recognize the importance of first-party data and are using their loyalty programs as a vehicle to collect it and to engage customers in the most relevant ways.

Your Sunmed, CBD Store, which uses Lightspeed’s retail platform, has seen the benefits of this first-hand.

“Using the Lightspeed API, we’ve been able to get full visibility into what is going on in every one of our locations, right at the transactional level. And so not only does it provide me that that insight, but it also allows us to pump that data into our email marketing platform so that we can begin communicating with our consumer right away,” shares Wilfredo Rodriguez, CFO at Sunmed, Your CBD Store “The day after they visit our store, they’re receiving the first email communication from us.

And it’s so critical for us to have that detailed transactional data in order to be able to engage with the customers at a very individualized level.”

Wildredo continues, “Without the Lightspeed platform enabling [data collection] for us, none of the customer engagement and education that we’ve been able to accomplish through JANUARY 2025

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Retailers will invest in practical (not sexy) retail tech Things like the metaverse and “just walk out” technology may have generated a lot of buzz and sounded sexy on paper, but at the end of the day, retailers prioritize practical solutions that drive real ROI. Research cited by Colliers shows that these two technologies ranked last in a survey asking retailers about planned investments, with just 16.9 percent and 10.2 percent of respondents saying they would invest in “just walk out” tech and the metaverse, respectively.

Instead, retailers said that when it comes to technology, they plan to invest in foundational and practical solutions such: ❯ Warehouse management (88.1 percent) ❯ Omnichannel (87.3 percent) ❯ Artificial intelligence (71.2 percent) ❯ RFID (63.6 percent) ❯ In-store automations (51.7 percent) The data is clear. As far as retail tech goes, merchants are looking for tools that improve operations, streamline logistics and enhance customer experiences.

So, before you go searching for the next shiny object or get tempted to jump into new and hyped up tech, make sure you have your foundational platforms in place.

The pre-loved market is still flourishing Consumers love pre-loved products. Industry data shows that in 2023, the used clothing market in the United States hit $43 billion, up from $23 billion in 2018.

This trend is driven by inflation, which increases the appeal of cost-effective second hand options. Consumers are also becoming more conscious about sustainability. Purchasing pre-loved items means extending product lifecycles and reducing environmental impact.

Either way, the used market will continue to grow in 2025 and beyond. Data from Statista JANUARY 2025

indicates that the global second hand market will grow from $230 billion in 2024 to $264 billion in 2025, representing a 14.8 percent growth rate.

Free shipping and deals will continue to drive purchase decisions Here’s another key finding from our State of Retail report: across all generations, the top two drivers for consumers’ buying decisions are free shipping and delivery and special offers and sales.

While this shouldn’t come as a surprise, it does highlight the importance of affordability and convenience in influencing consumer behavior.

To stay competitive, you must prioritize offering compelling promotions and seamless delivery options that meet customer expectations.

Lightspeed makes it easy for retailers to do just that. On the promo side, you can easily set up promotions such as percentage discounts or dollar amounts off.

Running discounts is a breeze, thanks to the ability to schedule promos, select date ranges, and implement one-time or recurring offers.

Then when it’s time to put your promotions out there, Lightspeed’s Advanced Marketing enables you to send email and SMSs flows to segmented customers groups to ensure that you’re reaching the right people at the most optimal time.

Meanwhile, retailers who want to streamline shipping and delivery, can do so with Lightspeed eCom, which gives you the ability to implement fast and cost-effective shipping and delivery services. Specify delivery zones and set minimium order threshholds to ensure profitability.

Lightspeed eCom automatically generates labels and calculates shipping costs to help you save time when fulfilling orders.

Consumers are open to tipping retail workers Many shoppers might be strapped for cash, but one surprising insight from Lightspeed’s research is that most consumers — 69 percent according to survey results — are willing to tip retail staff who provide a memorable shopping experience. That figure goes up

even higher among Gen Z. Eightynine percent of these shoppers are willing to tip retail workers.

It goes to show that shoppers increasingly value personalized and exceptional service, and they are willing to reward it financially, particularly among younger generations.

Retailers take more action to promote sustainability Sustainability isn’t a buzzword or a trend; it’s a necessity for long-term business success and societal impact. And the data shows consumer and regulatory expectations are driving significant changes in the retail landscape. According to Deloitte, organizations face pressures to improve sustainability efforts from shoppers, regulators and even board members, which is why many are taking measurable actions to meet these demands.

Deloitte also found that the top actions companies have taken as part of their sustainability efforts include: ❯ Using more sustainable materials ❯ Being more energy-efficient ❯ Developing climate-friendly products ❯ Training employees on climate change

includes sustainable and ethical sourcing practices. Another option is to invest in energy-efficient equipment or store operations to reduce your carbon footprint.

Whatever the case, it’s important to recognize that we all need to do our parts in implementing more sustainable practices that protect the environment.

Bringing it all together As we look ahead to 2025, the retail landscape is brimming with opportunities for growth and innovation. When you understand and harness key trends — like embracing sustainability, leveraging AI and enhancing customer experiences — you can position your business for success.

So, stay agile, focus on what truly matters to your customers, and invest in tools that empower your operations. The future of retail is here — let’s make it remarkable.

FRANCESCA NICASIO is a content creator for Lightspeed and has been writing about retail and hospitality for over 10 years. She focuses on producing actionable content pieces that helps retailers and restaurants improve their operations and bottom line. Having been featured in Entrepreneur, Forbes, The Huffington Post and other top-tier publications, Francesca stays at the forefront of industry trends, helping businesses adapt and thrive.

If you haven’t done so yet, consider implementing one or more of these initiatives in your retail business. You can, for example, evaluate your supply chain to ensure it

VECTEEZY.COM

email marketing over the past six months would have been possible. The email marketing and the engagement has improved customer retention and has helped us grow revenue and stores.”

DMN.CA ❰

KICKER

Genera

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BY NASSER SAHLOOL

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ISTOCK/VLADGRIN

n the ever-evolving digital landscape, the rise of Generative AI represents a revolution for marketing that is comparable in scope to the advent of the internet and the introduction of smartphones. With the global AI market projected to grow annually by 35 percent through 2030, the potential for AI to enhance personalization, streamline processes, and drive innovation is vast. Companies are rushing to adopt this transformative technology, with 75 percent already integrating AI into their business strategies by the end of 2023.

But, as with any revolutionary change, the excitement around AI is tempered by significant concerns. Job displacement, misinformation, and most critically, brand safety remains at the forefront of conversations around AI adoption. In this blog, we will explore the strategic imperatives for adopting AI in a way that harnesses its vast potential without compromising brand integrity.

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The AI Revolution: A Double-Edged Sword In much the same way that Johannes Gutenberg’s invention of the printing press changed the world in the 15th century, AI is poised to redefine industries, particularly marketing. Just as the printing press democratized knowledge, AI promises to unlock new levels of personalization and efficiency, revolutionizing how marketers interact with consumers. Yet, just as the Church initially resisted the printing press, there is a significant hesitancy around AI, particularly in relation to brand safety, job displacement, and the spread of misinformation.

According to a survey by Accenture, 37 percent of marketing professionals have already begun using AI, but fears about becoming JANUARY 2025

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TECHNOLOGY

ative AI in Marketing:

ng Your Brand While Embracing Innovation obsolete or compromising brand integrity loom large. This uncertainty has led some major brands, like Apple and Wells Fargo, to restrict the use of Generative AI in the workplace. The question is: how can marketers strike a balance between embracing AI’s revolutionary potential and safeguarding the core values that define their brands?

Strategic Adoption: Avoiding Common Pitfalls in AI Integration While many marketers recognize the transformative potential of AI, there are critical mistakes being made in its adoption. According to a Forrester survey, marketers are struggling to prepare for and effectively implement AI. The survey identified five key pitfalls: Playing Catch-Up: Over 83 percent of marketers admit they were unprepared for current AI use cases, leading to a reactive approach rather than a strategic one.

Narrow Focus: Marketers are fixated on immediate use cases without considering long-term, revolutionary applications.

Lack of Strategic Direction: There’s an absence of clear goals and processes, with marketers experimenting across multiple areas without cohesive strategies.

Competitor Obsession: Rather than focusing on what’s optimal for their own brands, marketers are racing to outdo competitors, often to the detriment of brand safety.

Neglect of Data Security: Over 45 percent of marketers report needing help with ensuring brand safety and data security in their AI efforts.

JANUARY 2025

These mistakes highlight the importance of not just embracing AI but doing so with a wellthought-out strategy that aligns with long-term brand goals and integrity.

Operationalizing AI While Protecting Brand Integrity A successful AI strategy begins not with the technology itself but with a clear vision of how it can enhance and align with your brand’s goals. Here are the critical steps to operationalize AI while safeguarding brand integrity:

1

AI as an Ingredient, Not the Entrée AI should be seen as a tool to achieve business outcomes, not as the outcome itself. Marketers pressured to “do something with AI” often risk reducing it to a box-ticking exercise. Instead, AI should be integrated thoughtfully, recognizing it as a means to enhance creativity, streamline processes, and improve customer experiences.

2

Leverage Existing AI Systems Many brands are already using AI, sometimes unknowingly.

Google’s PMAX, for instance, automates full-funnel discovery through AI. However, many marketers are dissatisfied with the “black box” nature of such tools. Recognizing and optimizing existing AI applications is a key step towards more strategic adoption.

3

Build Internal AI Leadership Across Disciplines AI adoption should not be siloed.

Cross-functional teams, including creative, technical, and brandfocused roles, should collaborate on AI initiatives. This ensures

that AI is not only integrated smoothly but also enhances the brand’s creative and strategic outputs. Establishing an internal AI committee is one way to ensure responsible and strategic adoption across all departments.

4

Stay Focused on Your Area of Expertise While AI enables employees to experiment with areas outside their expertise, it’s important to ensure that tasks remain within their area of responsibility. For example, analysts using AI to generate creative assets might not achieve the same results as experienced marketers. AI should be used to augment skills, not replace them.

5

Appoint an AI Ambassador To overcome hesitancy and resistance, designate an AI Ambassador — someone well-versed in AI who can guide teams, train employees, and ensure AI is used effectively across departments. This role can significantly accelerate adoption and comfort with the technology.

Protecting Brand Integrity in the AI Era Adopting AI should never compromise brand safety or integrity. To ensure this, brands must establish clear guardrails: Adhere to Brand Guidelines: Train AI systems on your brand’s guidelines, legal restrictions, and compliance standards to ensure consistency in voice, messaging, and representation.

Use AI as a First Draft: AI should support ideation and content generation but always with human oversight. Let AI provide the

initial output, but refine it through human creativity and judgment to ensure it aligns with brand values.

Overhaul Approval Processes: As AI accelerates production, internal approval processes must be streamlined to keep pace. Legal and compliance teams need to adapt to the faster outputs made possible by AI to avoid becoming bottlenecks.

Looking Ahead: Embracing AI with Strategic Foresight AI is not just a trend: it’s a transformative force reshaping the future of marketing. As we navigate this new frontier, the key is to embrace AI with both enthusiasm and caution, ensuring that brand integrity is never compromised. By avoiding common pitfalls and focusing on strategic adoption, marketers can harness AI to drive innovation, differentiate their brands, and create deeper connections with consumers.

In conclusion, the AI frontier is both a challenge and an opportunity. By strategically integrating AI into marketing efforts, while safeguarding brand values and ethical standards, marketers can stay ahead of the curve in this new digital age. The future of marketing lies not just in adopting new technologies, but in shaping them to create meaningful, lasting impacts on both brands and their audiences.

NASSER SAHLOOL is Senior VP of Strategy at DAC. Nasser leads a global team of awardwinning strategists and researchers whose job is to design and implement high-performing international programs that connect and drive brand and revenue.

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PAYMENTS & DATA

Top 10 Payments Trends Affecting Marketing for 2025 and Beyond

BY VICKI HYMAN

W

ithin just the past few years, payments have transformed entirely — tap to pay has become even more prevalent, traditional financial institutions are exploring blockchain, and generative AI is emerging as critical to boosting fraud protection rates by as much as 300 percent. Borders are no longer barriers to global trade, instant access to earnings is the expectation, not a perk, and paper checks and physical wallets are fast becoming museum pieces — at least among the youngest of us.

Continued advances in tech are ushering more people and businesses into the digital economy every day, and it’s driving demand for trusted interactions and raising the bar for simplicity and seamlessness. For example, in an effort to make online checkout as efficient as physical, Mastercard recently announced that by 2030, shoppers won’t even need a physical card number or have to punch in a password or onetime code to make a transaction online, thanks to the combination of tokenization, biometric ❱ DMN.CA

authentication and the Click to Pay digital wallet.

And the virtuous circle keeps spinning. Technologies are coalescing faster than ever, refining capabilities, generating new use cases and even creating new business models. We spoke with a range of Mastercard leaders across the company, and here are 10 trends they say could impact that way we pay in 2025.

1

Outsmarting AI fraudsters ... with AI

Cyber criminals are already harnessing generative AI to produce deep-fake videos and uber-personalized phishing messages to steal money or data, and cybercrime is expected to grow to $10 trillion annually in 2025. But this weapon is also a tool, as companies are training AI models to predict and neutralize threats in real time. Mastercard’s Decision Intelligence Pro uses gen AI to scan 1 trillion data points to predict in less than 50 milliseconds whether a transaction is likely to be genuine or not, boosting fraud protection rates by an average of

20 percent and as much as 300 percent in some instances. In the U.K., Mastercard’s Consumer Fraud Risk solution uses AI to detect authorized payment scams and stop them before money even leaves the victim’s account.

Cybercrime is expected to grow to

$10 trillion

2

Small business, bigger toolboxes

The small businesses that survived — and indeed thrived — during the pandemic were often the ones that quickly embraced electronic payments, e-commerce and other digital touchpoints. But an

online presence is only the tip of the iceberg. Small businesses are increasingly able to access a wide range of digital tools and services previously out of reach, or scattered among so many different platforms that they were difficult to manage. Centralized platforms uniquely tailored to the needs of small businesses are letting owners automate administrative tasks and create personalized marketing and loyalty campaigns, with data-driven insights to guide decision-making.

3

A new era of digital inclusion

In developing and emerging markets, digital wallets are increasingly playing the role of a bank account and capturing the large majority of consumers and businesses. While these digital wallets are addressing unbanked populations head-on by delivering simple, convenient and affordable experiences, there’s been a disconnect in connecting traditional, card-based payments for international consumers. To JANUARY 2025

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PAYMENTS & DATA

5 $124 Embedded finance could be worth up to

billion

help solve this, Mastercard Pay Local was launched to make it possible for cardholders to link their credit or debit cards to a local digital wallet — allowing them to shop at merchants without needing to set up or top up a prepaid account. Digital wallets will continue to evolve into comprehensive platforms, integrating payments, identity, loyalty and even health care — an essential way for people to navigate their daily lives. The leaders will be those who create intuitive, interoperable ecosystems.

4

Digital identity on demand

A trusted identity is the foundation of the digital economy, enabling people to interact how, where and when they want with complete confidence.

Biometrics, machine learning and identity insights are already supercharging authentication throughout a customer’s journey.

The adoption of passkeys — passwordless authentication most often powered by users’ biometrics — is propelling this and will gain momentum in 2025.

We’ll start to see digital identity fueling experiences in health care, education and public services, where people will be able to selectively share their identity with anyone, without friction and with privacy at the center. In Europe, for example, Mastercard is launching a service that allows merchants to verify that a consumer meets the criteria to purchase certain goods or services through their payment card — no uploading of documents necessary.

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Making B2B as easy as ABC

Corporate payments have been slower to evolve to the digital world, but that’s changing as businesses realize the benefits of virtual cards — temporary card numbers randomly generated and linked to a funding account that has an established line of credit. It creates automated reconciliation that cuts down on human error and offers companies real-time data insights and more control over spending. By embedding payments in enterprise resource planning software, businesses are able to make real-time payments, prevent fraud and manage costs more efficiently. For small businesses, the total market for embedded finance could be worth up to $124 billion in 2025. For these enterprises the possibilities are endless, from customer loyalty apps and digital wallets tp accounting software and shopping cart platforms.

6

Checkout gets a glow-up

With contactless payments now accounting for more than two out of every three in-person purchases on the Mastercard network, the tech has cemented its place in driving fast and secure consumer payments. But there’s more to the tech beyond a shopper simply tapping their card or phone in the store. Tap on Phone technology, which turns any device into a payment acceptance terminal, is already democratizing acceptance for merchants, from solopreneurs to larger retailers, reducing the need for complex checkout

Realtime payment systems are no in more than

100 countries

infrastructure and shortening wait times, among other benefits. As physical and digital experiences continue to converge, we’ll see more applications of tapping tech across a range of commerce use cases, from verifying a transaction to instantly adding your card to your mobile wallet or even sending money to friends and family.

7

Real time comes of age

Real-time payments systems are now available in more than 100 countries, with 575 billion RTP transactions expected by 2028, representing 27 percent of all electronic payments globally. Real-time payments are providing greater consumer choice of ways to pay and be paid. As countries move to interlink their domestic schemes, cross-border payments will become more seamless. And more interoperability between real-time payments and other forms of payment, such as central bank digital currencies and digital assets, will make it easier to enable transactions between traditional bank accounts and digital currency accounts.

Bet on blockchain technology to

• enhance speed • security • efficientcy

8

The rise of collaborative ecosystems

The world is so interconnected and technology is evolving so quickly that success can no longer happen in a silo.

Partnerships are evolving from mere tactical alignments and agreements on paper to genuine collaborations that co-create solutions and accelerate large-scale innovation. Financial institutions,

corporations, governments and fintechs are embedding technologies, driving efficiencies, unlocking value and enhancing experiences. Fintechs in particular will continue to play a key role in simplifying financial services and delivering integrated and accessible tools that expand the benefits of the digital economy and ensure trust.

9

Banking on blockchain

The maturation of blockchain and digital assets in recent years has proved that the technology has transformative potential to enhance global finance and commerce systems.

Cryptocurrencies, stablecoins and tokenized assets have moved from concept to commercialization, particularly as relates to their applicability to real-world assets.

In 2025, bet on blockchain technology to enhance speed, security and efficiency, especially when it comes to B2B and commercial payments. Its ability to do so will continue to require strategic partnership with crypto natives and financial institutions alike to create more efficient and secure payment solutions.

10

The token economy

Tokenization is key to Mastercard’s vision to eliminate manual card entry by 2030, and it’s driving the adoption of in-car commerce (pun intended), but its potential beyond card payments is immense. For example, tokenization technology can enable consumers to share their shopping habits and preferences with merchants on digital platforms to access more relevant offers and discounts, all without revealing their personal data. And the tokenization of assets through blockchain technology can digitize and optimize any economic activity — from capital markets to trade finance to exchanging a land title or a carbon credit.

VICKI HYMAN is Director, Communications, at Mastercard.

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LOYALTY PROGRAMS

High Time for the Consumer-Packaged Goods Industry to Finally and Fully Embrace Consumer Loyalty Programs

BY RICHARD SCHENKER

T

he consumer packaged goods (CPG) industry, traditionally known for its vast scale, global reach, and ubiquity in everyday consumers’ lives, has been a late adopter of formal consumer loyalty program strategies. While sectors such as retail, financial services, and travel & hospitality have all operated, marketed, and benefited from highly sophisticated loyalty programs for decades, the CPG industry has lagged other sectors in establishing meaningful scale and lasting consumer relationships through loyalty programs. As ❱ DMN.CA

consumer shopping behavior evolves and direct to consumer technologies accelerate, the conditions for making it easier for CPG companies to jump into offering loyalty programs are more opportunistic than ever.

The time has come for the CPG sector to catch up and reap the benefits of such programs. This article examines why the industry has been slower to adopt formal consumer loyalty programs, the barriers that have impeded progress, and the strategic and financial benefits of embracing consumer loyalty programs.

Additionally, the article outlines

why the current market conditions are ideal for CPG companies to revolutionize their consumer engagement strategies in 2025.

The Delay in Embracing Consumer Loyalty Programs There are several key reasons why the CPG sector’s development and adoption of consumer loyalty programs has lagged other industries: 1. Control over the Consumer Relationship: In the past, CPG companies used to know the most about their consumers and their preferences. However, over the last few decades as

mass retailers have successfully launched large scale and highly penetrated loyalty initiatives, they have amassed a deep and wide spectrum of valuable consumer and transactional information around CPG consumer purchases. Their rich understanding of consumers has acted to strengthen their negotiating power over CPG companies who used to hold that advatage. CPG companies have become dependent on mass retailers to help them better understand consumer purchasing behavior and access consumers through retailers’ JANUARY 2025

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ISTOCK/STOCKAH

LOYALTY PROGRAMS

communication vehicles. This has provided significant leverage to retailers as they tend to hold the key to the direct-toconsumer relationship. Retailers often exploit this power to grow funding from CPG suppliers in exchange for consumer cohort information and access to market to consumers.

2. Price Sensitivity and Brand Loyalty Challenges: In the CPG sector, many products are commodity-driven, with price often being a key influencer of consumer choice. Unlike other sectors, like travel and hospitality, where experiential JANUARY 2025

or service-based factors play a key role in the consumer’s decision to be loyal to a brand, CPG brands have found it more difficult to create a sense of brand loyalty that transcends the price-product relationship. One could argue that this is the case since, historically, there has not been an adequate direct channel for some of these brands to build a relationship with their consumers. In this absence, it is difficult to foster an emotional connection with consumers.

That said, the landscape is changing as many CPG brands have been harnessing social

media channels (which are measurable) to sidestep the reliance on retailers. This is allowing CPG companies to forge more emotional connectivity with prospective and existing consumers.

3. Diversity of Categories: Many CPG companies have a plethora of categories which they manage. Each of the brand names across multiple categories of products have no linkage in the consumer’s mind, making it more complex to bring a value proposition together. Designing a single loyalty program that can cater to diverse consumer

needs and preferences for such a wide range of products presents a challenge. However, we have seen several noble attempts

by CPG companies with large product portfolios such as, but not limited to, P&G, Unilever, Kraft, J&J, and Nestlé, assemble CRM and consumer loyalty offerings that recognize and reward consumers for their transactional loyalty with some or all of the consortium of brands in their portfolios.

Some CPG companies with less complex structures have built physical retail outlets and online commerce sites.

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LOYALTY PROGRAMS

These commerce outlets are allowing them to collect consumer identifiers, such as mobile numbers and/or email addresses, in order to communicate with consumers to establish a relationship with or without a formal loyalty offering. This represents the beginnings of loyalty-building blocks but in many cases only represents a small portion of total CPG network sales and, therefore, a small proportion of product purchasers.

4. Investment & Commitment: For consumer loyalty strategies to flourish in any sector, they require a C-suite top-down commitment. Loyalty programs can have significant upfront and ongoing costs. According to Ariela Freed, Founder and Principal at Funnel Digital and a longtime expert in the CPG industry, “CPG companies love consumer loyalty. Investing in brands that consumers can trust and product portfolios that meet a range of consumers’ needs and wants, has always been core to CPG businesses.

However, loyalty programs have not historically been adopted by CPG companies.

This is due to platforms and mechanics that depended significantly on consumer sales transactions which were, historically, obtained only by retailers in-store.” The business cases for loyalty programs are less prevalent in the CPG sector than other sectors. As such it can make it more difficult to secure the strategic and financial ❱ DMN.CA

investment commitments required to proceed with Loyalty.

The Strategic and Financial Benefits of Consumer Loyalty Programs for CPG Companies Despite the aforementioned challenges and obstacles faced

by CPG companies, the case for investing in consumer loyalty programs is stronger than ever.

Here are some of the compelling strategic and financial benefits for CPG companies: 1. Rich Consumer Insights: By directly engaging with consumers, CPG companies can collect rich data that provides insights into consumer preferences, behaviors, and purchasing habits. Most of the data which CPG companies accumulate is research based as retailers typically only share aggregate segmented consumer transactional data. Data collected from a CPG company’s loyalty program could do many things such as: ❯ Identify best consumers in order to recognize and reward their loyalty and mitigate potential attrition of this important cohort ❯ Target next best consumers to migrate their spend and commitment upward ❯ Consolidate consumer purchasing among multiple CPG categories ❯ Inform new product development, product innovation, and better predict consumer need states ❯ Deliver consumer-specific relevant content related to

the use and enjoyment of products ❯ Facilitate personalized offers that will deliver more optimal conversion rates and product uptake ❯ Build cross-channel purchase profiles and omni-channel shopping behaviors to significantly improve category relationships with retailers, from improved return on ad spend (particularly with Retail Media Networks) to personalized co-promotion with a CPG companies’ loyal customer base 2. Emotional Connectivity: A well-designed loyalty program with embedded emotive building mechanics can help forge an emotional connection with consumers that transcends the transactional relationship.

This increases the propensity that consumers will choose a particular brand even in a highly competitive environment. It also increases the likelihood that consumers will recommend the brand to friends and family.

3. Competitive Advantage: A well-executed loyalty program can set a CPG company apart from its competitors, especially in densely competitive product categories. It also allows for differentiation beyond simply price, providing a reason for consumers to remain loyal even when new, competing products enter the market.

4. Less Reliance on Price Discounting: With a loyalty proposition, CPG companies are afforded the ability to leverage

a loyalty currency to incentivize behavior change and be less reliant on discounting, which is non-differentiating and margineroding. The currency can be used in a bonusing formation to motivate various desired consumer behaviors. These behaviors include encouraging multiple quantity purchases, mitigating sensitivities to price increases, encouraging new category purchases and more. This is especially effective in the CPG prestige or luxury categories that are less amenable to price discounting.

Loyalty offers these brands an opportunity to avoid tarnishing their brand image through discounting by using their proprietary currency incentive to maintain the integrity of the brand’s image.

How Loyalty Programs Benefit CPG Consumers For CPG consumers, loyalty programs provide tangible benefits and rewards for their ongoing brand preference and commitment to staying loyal to the brands offered by CPG companies.

Benefits for consumers include: 1. Personalized Rewards: CPG companies can offer a litany of personalized transactional benefits that can be customized and personalized based on consumers’ affinities, preferences, and commitment levels to their brands.

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LOYALTY PROGRAMS preferences and purchase history. The key benefit of personalization for CPG companies is to equip them with the ability to offer the right benefit to the right consumer at the right time and in the right channel. For CPG companies this will permit them to better optimize their investments with consumers who have the highest propensity to be loyal.

2. Non-Transactional Perks/ Offers: Loyalty programs can offer first or exclusive access to new products, reservations for beloved products that are about to be retired, special member events, and customized content. These loyalty marketing motions signal to consumers that the CPG brand is in the business of making their customers feel understood, supported, involved, valued, and acknowledged for their loyalty.

3. A Sense of Belonging: When configured properly, a loyalty program can create a community-like feeling for members. It can become a destination where like-minded consumers can come together to immerse themselves in the brand experience and expression. They can share brand tips, tricks, new usages for products, and learn more about the behind-the-scenes making and inspirations of the brand. It also provides an avenue for consumers to feel part of a brand’s journey, leading to stronger emotional connectivity and love for the CPG brand.

Lastly, it can act as a conduit for consumers to be invited to be involved in the co-creation of new products, product extensions, and new applications as part of a revered and valued community. All of these possibilities offered through a clever loyalty program can build a strategic point of brand differentiation and advocacy for the CPG’s brands.

The Ideal Conditions for CPG Companies to Launch or Revamp Consumer Loyalty Programs Are Present Now! According to Ariela Freed, “There is a confluence of change happening simultaneously that is leading CPG companies to reconsider how JANUARY 2025

loyalty programs can help their core business. First, consumers expect more relevant engagement with brands, across channels, to trust them. Second, ecommerce is leveling the playing field making it easier for new entrants to compete and unlocking access to consumer data which used to be available only through expensive research.

Third, advertising is crucial to building brands, but third-party cookie degradation means CPG companies need to capture and use their own first party data to continue to effectively target media campaigns. And lastly, loyalty programs have become more comprehensive, and therefore useful for CPG companies, by affecting the whole consumer relationship not only offering discounts and financial rewards.” To build on Ariela Feed’s CPG industry observations, here are some additional details which reinforce that the conditions for success are upon us: 1. Changing Consumer Expectations: Today’s consumers expect more than just a transactional relationship with brands. They want personalized experiences, rewards, perks, and recognition for their loyalty. Meeting these demands requires a robust loyalty system.

Consumers have an appetite to be the recipient of benefits, features, and motivation directly from CPG companies.

2. Competitive Pressure: With consumer preferences shifting, and direct to consumer avenues opening, there is mounting pressure on CPG companies to differentiate themselves.

Loyalty programs provide a unique opportunity to establish a competitive advantage in a crowded marketplace. There are so many new currencies of loyalty that brands can harness to entice and engage customers to stay loyal to their brands.

CPG brands can learn from other industries that have used variants of loyalty currencies such as trust, confidence, convenience, exclusivity, and wellness, just to name a few, to differentiate their brand offerings from others through their loyalty offerings. CPG brands should be leveraging these human desires and, where

logical, embedding them into their loyalty offerings so that they can become less reliant on discounting as a sole loyalty mechanic.

3. The Rise of Direct to Consumer: Social media and new selling channels have changed the way that CPG companies interact with consumers and that is drawing the attention of loyalty practitioners. Historically, the CPG industry has not been a hotbed for consumer loyalty strategy, design, and operational expertise. Most of the world’s leading loyalty practitioners have been employed in the more customary loyalty sectors such as retail, travel & hospitality, and financial services. That, too, is changing as we see an emergence of loyalty practitioners focusing on the CPG sector as the next underpenetrated loyalty frontier. Loyalty professionals understand that this is generally an untapped opportunity for them to make a demonstrable impact in this defined discipline in the CPG sector.

4. Technology Advancements: There are several technological advancements which help pave the way for CPG companies to enable loyalty programs easier and more efficiently than ever.

These include: ❯ Customer Data Platforms which make possible in one place the collection of consumer data and application of insights ❯ AI and machine learning are allowing the industry to be more efficient, relevant, purposeful and impactful with each consumer interaction ❯ The proliferation of apps that capture receipt data (such as Caddle, Checkout 51 etc.) now permit CPG companies to award loyalty currencies when their products are not purchased in their channels. This is an important development as most of the volume of CPG companies still originates at mass retailers.

Conclusion The time is ripe for the CPG industry to fully embrace consumer loyalty programs in 2025. The barriers that once restricted this sector’s ability to

connect directly with customers are becoming less significant due to technological advancements and changing consumer expectations.

By developing robust loyalty programs, CPG companies can acquire highly valuable consumer insights, increase retention, and enhance product profitability.

P&G, Unilever, Kraft, J&J, and Nestlé have demonstrated levels of success, but even their longstanding programs are still far from plateauing and reaching the critical mass and impact that other sectors enjoy.

As the digital scene continues to evolve, CPG companies have the opportunity and propensity to acquire greater control over consumer relationships and ensure long-term success in a competitive marketplace. This will require them to rapidly build the size and profile attributes of their consumer database. It is incumbent on CPG companies to design loyalty solutions that are not overly focused on discounting but rather strike a balance between value and creating emotional worth and connectivity with consumers. This can be achieved by embodying proven human-centric program attributes, benefits, features, and mechanics that bring their brand ethos to life inside their loyalty programs. The ultimate role of a loyalty program is not to make the consumer loyal to the program but rather act as a conduit to make consumers transactionally and emotionally loyal to the CPG companies and their brands.

RICHARD SCHENKER is a highly accomplished customer engagement thought leader, loyalty practitioner and partnership curator who has designed, renovated, and managed some of the world’s leading customer loyalty programs.

He has an impeccable track record of success at enriching transactional and emotional relationships between iconic brands and their customers, across multiple business sectors.

Richard has spent the first half of his career in senior loyalty roles with the Hudson’s Bay Company and Shoppers Drug Mart and the remainder of his career in leadership roles with leading loyalty agencies, Air Miles and Bond Brand Loyalty. Currently he is the Founder & Chief Customer Engagement Officer of Loyal Strategy Consulting, a consulting firm focused on enriching customer loyalty for leading brands. Richard can be reached at: rschenker@loyalstrategyconsulting.com or visit: https://loyalstrategyconsulting.com DMN.CA ❰

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INTERVIEW

The B2B Journey: An Interview with Jim Tincher, President, Heart of the Customer

BY STEPHEN SHAW

Jim Tincher is the President of the CX consulting firm Heart of Customer and author of the book “Do B2B Better”.

M

ake it – sell it - ship it.

That’s pretty much the way B2B companies have operated forever. Usually product-centric and sales led, they view customers as “buyers” who are pigeonholed as decision makers, influencers or users. The only thing that truly matters: the size of the sales pipeline. How many marketing-qualified leads? How many sales qualified leads? How many proposals?

How many conversions? And then, once the final deal is agreed to, the handoff to the “customer success” team whose job mainly is to make onboarding go as smoothly as possible.

According to this old-school selling model, the customer journey is the path to purchase. That journey typically ends with a signed contract.

No one thinks too much, if at all, about the post-sale experience: what happens when things don’t go exactly as planned. When products fail to work as advertised. When shipment dates are missed.

When the customer urgently requires on-the-spot help. When product needs change. When questions come up that can’t be answered through a routine service call.

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INTERVIEW

somewhere between sales, field support and service. And certainly it is never within marketing’s purview, whose only job is to keep sales happy. On the executive floor, experience metrics like NPS and customer satisfaction are rarely part of the conversation, overshadowed by the latest market share and revenue figures.

All of that explains why most B2B companies are rated at or near the bottom of the CX Maturity scale, according to the XM Institute1. However, that has finally begun to change in the last few years, mainly due to B2B digital disruption.

The buying process has become infinitely more convoluted. A wider circle of stakeholders is now involved in decision making. Buyers no longer want to see a sales person until much later in the buying cycle.

They prefer to communicate through digital channels. They are more research driven – more knowledgeable — more demanding — more inclined to shop around. Their expectations, before and after the sale, are based on their own personal digital lives.

As a result, marketing’s job has changed: now B2B marketers need to create a richer digital experience for customers, giving equal attention and weight to all stages of the customer lifecycle. Sales is no longer the exclusive owner of the customer relationship. Marketing has a much larger role to play in securing customer loyalty by enhancing the experience.

Around a decade or so ago the concept of journey mapping came into vogue as a way to improve the end-to-end customer experience.

By visualizing the steps customers took in their interactions across touchpoints, while identifying their thoughts and emotions as their journey progressed, companies could design a better, more rewarding experience, making it easier for customers to do business with them.

So journey mapping became a foundational step in addressing customer satisfaction and loyalty.

The problem, of course, is that a lot of the time, those journey maps end up as just pretty wall posters due to a lack of follow-through.

Transformation of the B2B experience can be a complex undertaking due to siloed organizational structures, multiple stakeholders, internal pockets of resistance and a lack of systems integration. It takes commitment and resources to fix pain points by working across functional lines and business units. Executive management has to be fully behind the effort, making CX a priority. And, above all, it takes internal champions with the courage and fortitude to be “changemakers”, according to Jim Tincher, whose book “Do B2B Better” outlines how companies can take a more systematic approach to customer experience design.

JANUARY 2025

later I was fired because I hadn’t sold enough. But at that point I was number one on Google for journey mapping.

And so I thought maybe there’s a business here. I’ve been fired twice in two years. I never wanted to be a consultant, but I found that our approach to journey mapping really resonated. And so we started doing that work and we really started to take off and grow.

STEPHEN SHAW: You started your CX consultancy about 11 years ago, early days for customer journey mapping. What made you decide to make that entrepreneurial leap?

JIM TINCHER: Well, to be honest, I got fired a lot! I had been at Best Buy, which was very customer focused, and at that point I thought that’s how everyone does business. I then went to a large health insurance organization as a product guy and recognized that not everybody is customer focused. In that organization, nobody in marketing and product development had ever met a client. And yet we led the nation in sales. We also led the nation in churn. But when you’re growing, that covers up a lot of sins. And so I got this idea about understanding more about the customer and started a blog.

I left to go to a consulting company, got fired, then went to a research firm. And while I was there I was asked to build a journey map. I had no idea what a journey map was. They said, well, here’s a PowerPoint slide with some bubbles on it, use this. Well, you can’t take a customer experience, toss bubbles on a PowerPoint slide and say that’s it. It’s got to be much more immersive, much more visual. And I didn’t want to do it, but you know, it was my job, I had to do it.

I wrote in my blog about how I would do journey mapping: the top 10 requirements.

And my blog was the ugliest website you’ve ever seen. It was bad. I had a friend of mine at church create my logo. It was ugly. But that ugly little blog post went viral. And then around the same time my boss came to me and said, we need you in sales, I said, great, okay, who’s going to take on my projects? “What do you mean?”, he asked . Well, I’m going to be in sales. No, no, you still have to do your projects. Okay, great: what accounts do I take over? No, no you’re in “new” sales. Okay, where are my leads? Leads?

No, no, you’re in sales. Well, number of months

SHAW: One of the stats you cite in your book “Do B2B Better” is that 80 percent of B2B companies are stuck at the lower end of the CX maturity curve. Why is it so hard for B2B companies to get CX right?

TINCHER: There are three reasons. Gartner reports that the size of the committee making B2B decisions has more than doubled in the last few years. And so, one reason is you have that complexity. The second reason is that we like to talk about the net promoter score or customer satisfaction, but the rest of the business doesn’t. And so, it’s really hard to talk to finance because it’s usually not a shared vernacular and they’re scary people, so we don’t talk to them.

I did a survey a few years ago of CX leaders and the answer to the question of how often do you meet with finance was “once a year” and “never”.

But the “change makers”, those who can show business impact, they’re meeting with finance regularly.

The third reason is when I ask executives what they care about the most, the answer, universally, is growth. They don’t see customer experience contributing to growth. Now, in my worldview, customer experience is the secret to organic growth. When you do a great job of customer experience, customers want to buy more from you, stay longer. Leadership may believe that’s true, at a certain level, but the NPS score isn’t proof of that. And eventually leadership says that CX is not that important.

SHAW: I wonder how much of that attitude has to do with the financialization of business decision making in corporations where the only thing that matters is next quarter results.

TINCHER: You’re exactly right. Now when we look at programs that are really effective, they’re actually able to connect customer experience to metrics such as net revenue retention improvement, order velocity, and margin per customer. But there’s usually a lag. Even if you do a great job today, you won’t make more money tomorrow. Executives want to see how the results play out with their own customer data. Watermark2 has this great study that shows stock prices go up as a result of a better customer experience, but executives don’t care.

They’re not going to get bonused because some other companies saw their stock price go up.

DMN.CA ❰

// 20

INTERVIEW

SHAW: You mentioned Jon Picoult’s company [Watermark]. His point of view about CX, generally, is that the aspiration should be to create a memorable experience. In B2B, is that necessarily the case? Or do B2B companies just need to make it easier for their customers to do business with them?

TINCHER: The research is quite clear here — the way you build loyalty is through an emotional connection. Now, a memorable moment is a good way of getting that to happen. I’m doing some analysis right now with a client and they asked customers to rate the importance of different facets of the customer experience. When customers were asked to rate the importance of the relationship with an account manager, it ranked 9th out of 10.

But when you actually look at what drives intent to grow, it’s the most important factor.

Relationships, emotional connections, these drive behaviours. You need to look at the emotions you’re creating in your customers because how we feel drives what we do.

SHAW: You say the key is to find what you call an “emotional north star”. Can you explain what you mean by that?

TINCHER: You start with understanding what leads to growth. It’s typically an emotional connection. So through quantitative research you need to understand what emotions lead to the outcomes you care about and then you create an emotional north star. It could be confidence, enjoyability, trust. And then start exploring, where do we create that?

What are the drivers of that emotion? Look at your operational behavioural data and see what’s common to the customers who feel that emotion versus those who don’t.

What we’ll often do is we’ll measure six to eight total emotions, and we start seeing what in the data creates those outcomes. What we found with one software company is that if the implementation process went past a certain length, the emotion generated was one of exhaustion. When customers feel exhausted, their intent to buy more from you is almost zero. And so we looked at the journey map. The most frustrating times were the points on the map where our client wasn’t involved – they had sub-contracted to system integrators.

And as a result that was causing frustration and exhaustion to their customers, which was causing them to be less willing to buy more software.

SHAW: How do you actually end up zeroing in on one specific emotion?

TINCHER: We start with qualitative research and derive it from the interviews. We come up with 30 different possibilities. Some are more extreme, say, happiness versus delight. Then we look at the data. Who is growing with you?

That’s a sign of having a good experience. If ❱ DMN.CA

The buying process has become infinitely more convoluted. A wider circle of stakeholders is now involved in decision making.

they have a lot of complaints, that’s a sign they have a bad experience. Then we take those 30 emotions and survey customers to find the ones most highly correlated with the outcomes you care about. You start to see that emotions become a leading indicator of what we care about because again, how we feel drives what we do. One of my favourite stats on that is from the XM Institute, which showed that if your customer has a positive emotional experience with you and something goes wrong, 74 percent of the time, three out of four times, they’ll forgive you for the problem. But if they’re not having a good emotional experience with you, that drops down to 19 percent, one out of five.

Pick a company you don’t like – for me, that’s easy, it’s Comcast - your emotions are negative.

When Comcast doesn’t show up on time, I view them as a horrible company. But if my home vet comes to visit and he’s late, I have a positive confirmation bias - I’m sure he was busy, things just happened. And so if you’re not measuring the emotion, you don’t understand what the biases of your customers are.

SHAW: You emphasize measurement quite a bit in the book. You recommend a couple of different types of dashboards: an overall CX dashboard and then individual journey dashboards. Can you give me a sense of the metrics that would appear in each?

TINCHER: Sure, the overall dashboard has metrics that are more outcome oriented. My favourite metric around customer experience is a combination of churn and buying more or buying less. A lot of our clients don’t have a direct issue with churn. But they can lose business on individual products. So we call that SKU level churn.

When we do journey mapping, we will bring in the operational and behavioural data. Let’s use an example of product availability and delivery. And so we’ll look at data like when the customer calls in to place an order, are you able to say, “Yes”? For those companies using SAP, that’s called “Availability to Promise”, ATP. And it’s a really good indicator of the overall customer experience.

And then we’ll move on to, for example, ontime delivery. Complaints. And so what we’re doing is we measure the customer journey from the customer’s viewpoint. We then go inside the organization and say, what data do you have that reflects what we’re seeing?

In the case of software implementation, a really good indicator of a bad experience is if the client changes their project manager. Well, that’s going to cause the customer a lot more angst.

And so again, we start with the customer, their journey, and then we work with subject matter experts inside to say, what data do we have to reflect what the customer is viewing? Let’s use that and then build a dashboard around that.

SHAW: In the book you state that your preference is to start with mapping the end to end experience, and then to move on to individual sub-journeys. When do you actually start with one versus the other?

TINCHER: We did a survey with hundreds of customer experience leaders and we found the “change makers” were 50 percent more likely to have done the end to end journey first.

Now that’s the research, that’s the theory. But we’ve had clients say we really want to map, for example, a specific sub-journey. Like one client said we want to map the “asking for a sample” journey because if we win with the sample the order usually follows. They thought it was really important. And they invested all that effort to learn that there was nothing really to change.

That’s the risk of starting with a specific area.

If you do the end-to-end first, you understand from the customer viewpoint where the real issues are and then you can go deeper into that.

That is not the typical practice. Some of our clients do listen to the research and go end to end. It’s a small subset because most of them are under pressure. If they’re going to invest all the time, energy and money in journey mapping, they need to do something right away.

SHAW: They need a win.

TINCHER: Yeah, I remember when we were working with a health insurance organization, JANUARY 2025

// 21

INTERVIEW

and the chief operating officer said, I don’t want to do an end to end journey. We’re not going to spend all this money just to get a list of pain points. We have to fix something. All right, well that’s pretty clear then. They then put out the RFP. And the first part of the scope of the RFP was “help us figure out what journey to map”.

So most of our clients do start with a specific area of pain. Now one client, for example, they did a huge survey, 40 or 50 questions. And they took the area that scored the lowest and had us work on that. Okay, that’s not bad. I mean, you know, it’s customer pain. Better than just guessing. Many others will look at win-loss studies and say, when we lose, what did people have to say? Or more importantly, churn studies. We lost customers. What were their biggest areas of complaint?

SHAW: What’s the central organizing principle around an end-to-end journey map?

Is it customer lifecycle?

TINCHER: The first thing we do is hypothesis mapping. We start with the inside out view.

We get the employees together to say, what do you think the journey looks like? Then the important thing we do next is we throw that away. Not literally, we just set it aside and develop the discussion guide. We’ll ask customers, what do you do first, what do you do next? And we look for the language of how they talk about the stages because they always have language for it. There’s never a “selling phase”. It’s a “buying phase”. It’s got to be in the customer’s language.

SHAW: But again, does that go through the relationship stages of first time buyer, repeat purchase, retention?

TINCHER: We’ll work with clients to define that. Often we get involved either right at the moment of sale or right after. Because the problems to solve pre-sales are often very different. The problems to solve post sales - yes, there are issues with handoffs where your sales team goes away, and the account management team comes on. There’s some there. But typically our clients start either at the sale or post sale.

SHAW: Just with respect to sub-journeys — and I realize this is like asking how long is a piece of string — but typically how many subjourneys would a company eventually map?

TINCHER: It can be three to 10. More commonly around 6, 7. It depends how granular you want to get. If we start bringing in UX journeys, well then you are in the hundreds. We don’t usually go that granular.

SHAW: And just to be clear, this isn’t process mapping. This is what the customer is going through.

TINCHER: A hundred percent. We’ve had a lot of people confused by that. They say we’ve JANUARY 2025

already done the work. What they’ve done is a hundred step process map. Now that’s really important. But it’s also very different. It’s never from the customer’s view.

SHAW: Where do personas fit into this whole process?

TINCHER: They’re front and center in the journey map. We worked with a distributor once and they had seven personas, and nobody could keep them straight. Just too complicated. We were able to consolidate the seven into two that really mattered. This was in the area of durable medical equipment. So think beds, wheelchairs.

The customer was the company that sold the DME. Our client was the distributor who sold to the retailers and others. In this space, by the way, half of the companies had gone out of business in the last year. And we could foresee another half of them go out of business in the next four years. What we found is that most of them had been in business for 20 or 30 years trying to do the same things the same way, but with compressed margins, they were just suffering. But others came from the outside and would do one thing really well. Maybe they had a great website, maybe they’re great at retail, maybe they chose a specific subset of customers. But they were the “innovators”.

And so we had the “maintainers” versus the

You start to see that emotions become a leading indicator of what we care about because again, how we feel drives what we do.

“innovators” of the two that mattered. In the case of B2B our personas are based on roles.

SHAW: Why roles?

TINCHER: We find it matters. We worked with a large company that was redoing their digital experience. Their belief was that we had to do the digital experience differently for every business unit they had. Our research showed that it didn’t matter about the business unit, it mattered about the role of the person using the site. And so that allowed them to create one site for all their business units. Little tweaks here and there, but offering different experiences based on the role.

SHAW: In that case where you have two personas, do you actually have two different journey maps?

TINCHER: It varies. So we often get asked at the beginning, how many journey maps will I get?

The answer is I don’t know. We will give you as few journey maps as possible to adequately tell the story. We’ll “make it as simple as possible, but no simpler” I love that phrase. If we look at different roles, often the moments of truth are different, and so in that case we will create separate maps.

It really comes back to what is the story your customers are telling us? And are the personas doing dramatically different things?

SHAW: We’ve been talking a lot about current state maps. But creating a new experience involves future state mapping. What’s your process for that?

TINCHER: So after we do the current state, we start to recognize that there are opportunities.

Those opportunities often lead to a new vision of customer experience and strategy. My very favourite ever journey mapping workshop was with a financial services company. Typically those are two days long. We came in at Day Two and we started showing a few videos to remind them of the pain they’re causing customers.

And then one of the leaders said, let’s stop for a minute. Let’s recognize everybody here contributed to this pain our customers are feeling. And it’s going to take everybody here to make it better. And that started this incredible collaboration.

One of the problems they had was a claims journey. Their claims documentation, written by legal, was impossible to read. In fact, we brought the VP of Marketing to a customer’s home.

And this person gave the claims paperwork to this VP, and asked her, can you tell me what I’m supposed to do? The VP read it, read it again, read it a third time and said, “I’m sorry, ma’am, you’re going to have to call your claims expert. I can’t tell you what this says”.

What the VP did then was involve legal in the journey mapping work. They created two sets of documentation. The legal, all detail, but also DMN.CA ❰

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INTERVIEW

Marketing is not usually good at connecting to ROI, to net revenue retention, to financials. If you’re in marketing, you really have to work across the organization.

You need to be working with executives across the organization or you’re going to be a “hopeful” and you’re going to be at risk.

a short summary in English that they could use then to help understand what to do.

SHAW: What about a CX vision and charter?

Without it, you’ve really just got a bunch of mapping projects going on. What brings it all together?

TINCHER: It’s a separate work stream that’s happening around the same time as we’re developing the future state map. But again, it’s starting with what you’re doing today and then what you want it to be tomorrow.

JANUARY 2025

SHAW: If a CEO asked you what’s the best way to organize around CX, what would your answer be?

TINCHER: How long is a piece of string? We came out with a white paper about creating your CX dream team. We did interviews with 30 different organizations on how they do it.

We found four strategies. The first is hardly a strategy: it’s keep costs low. It’s usually one to three people. They spend all the time working on surveys and therefore they don’t really create much impact. And so most of them stay small.

That’s the first one. Limit investment, just have a few people. The problem is they’re trying to offer all the different disciplines of CX, with a handful of people, and they just can’t do it.

The second is centralized where you have a center of excellence: high risk, high reward.

You have a centralized team which can be up to 40 people which means you can do really organization changing work. But you’d better, because that’s a big headcount and it’s all overhead. And when I see companies that have just cut CX, it’s almost always a centralized team because all they’re doing is talking about NPS. They’re not able to show they’re driving the business.

The third is where you have somebody specifically assigned to each business unit.

They’re a generalist and somewhat of a relationship manager working with that business unit to advance CX. The good news is that they have somebody specifically to make that business unit shine. When we see this fail, it’s because the people are typically hired from the outside and there’s no trust by the business unit and they won’t give them the time of day.

And so in this model, it’s typically better to hire somebody from the inside from that business unit who represents CX to that organization.

Especially good if you have the same customers across business units because you’re creating a consistent experience.

The fourth is a federated model which has a smaller CX team but also has representatives throughout the business units who are responsible for CX there. Now the benefits of this is that you keep a small, centralized team who can focus on creating standards and then you can have the work happening out in the business units. It also lowers your overhead.

But there is a risk if you don’t have strong governance, that every business unit does whatever they want and doesn’t follow the corporate mandate. So you need really strong governance so that you come across as one company and not a Frankenstein experience.

SHAW: What’s the funding model? If it’s just operational funds, they’re at risk if the CEO stops believing in the importance of CX. TINCHER: Pretty much, yeah. With the first three models, they’re all overhead. With the fourth one, you have the business units funding

their portion of it and a small team that’s paid for centrally.

SHAW: Is it important to have ultimately a chief customer experience officer who will be the champion at the board level for these initiatives?

TINCHER: You certainly need a champion who can be represented at the board. And that varies by organization. But you need somebody who can speak for customers.

SHAW: It’s funny, you haven’t mentioned marketing once in this entire interview.

TINCHER: IBM did some research where they asked CEOs which executives they trust the most — who they rely upon. Can you guess what the top two were?

SHAW: The Chief Finance Officer and the CTO. TINCHER: COO, actually. CTO, third. Marketing was only mentioned by 18 percent of the CEOs. SHAW: That doesn’t surprise me.

TINCHER: Marketing is not usually good at connecting to ROI, to net revenue retention, to financials. If you’re in marketing, you really have to work across the organization. You need to be working with executives across the organization or you’re going to be a “hopeful” and you’re going to be at risk.

SHAW: Of all the “changemakers” you cite in the book, which comes the closest in your mind to getting CX right?

TINCHER: Well, we used to offer a conference “Do B2B Better”. And I had Ricardo3 from Dow speak at it. He had a challenging question asking him what’s the role of inventory in CX? Ricardo did a great job of talking about how he turned inventory, which is just a pile of stuff, into a customer metric: “Availability to promise”.

He then talked about when ATP dropped, confidence and enjoyability dropped, two of the emotions they measure. When those dropped, he showed that order velocity also dropped. The first action of a CX change maker? Connecting the financials.

1. The XM Institute is a resource center for Experience Management (XM) professionals operated by the survey platform Qualtric.

2. Watermark is a leading customer experience consultancy led by Jon Picoult which produces an annual Customer Experience (CX) ROI Study.

3. Riccardo Porta is the Global director for CX at Dow Chemical Company.

STEPHEN SHAW is the Chief Strategy Officer of Kenna, a marketing solutions provider specializing in delivering a more unified customer experience. He is also the host of the Customer First Thinking podcast.

Stephen can be reached via e-mail at sshaw@kenna.ca

DMN.CA ❰

Loyalty Trends 2025: What’s Next for Customer Retention

BY SARA RABOLINI

A

s we approached the new year, the world of customer loyalty was undergoing a major transformation, and if you’re interested in what 2025 has in store for customer retention, you might want to keep reading.

Gone are the days when loyalty programs simply meant earning points for discounts. Today’s consumers want more than just transactional relationships: they want real connections with the brands they love.

For companies looking to stay competitive, this means rethinking loyalty strategies to focus on personalization, sustainability, automation, and premium experiences.

This article explores the key loyalty trends shaping 2025, while also introducing you to a powerful ❱ DMN.CA

tool, our Loyalty Promotion Calendar for 2025, to help plan your brand’s next big loyalty push.

What are the key loyalty trends for 2025?

Key loyalty trends for 2025 will center on hyper-personalization, experiential rewards, and sustainability. Customers will expect brands to offer tailored experiences, using data to provide relevant, meaningful interactions.

Loyalty programs will focus more on delivering exclusive, memorable experiences rather

than just discounts.

Eco-conscious rewards, such as supporting environmental causes or offering green incentives, will gain popularity as sustainability becomes a key value for consumers.

Brands that embrace these trends will deepen customer connections and foster long-term loyalty.

1. Personalization at scale In 2025, personalization will be at the forefront of loyalty program strategies. 73 percent of brands have increased their efforts to deliver a personalized experience to customers.

With advancements in artificial intelligence (AI) and big data, companies can offer tailored rewards and experiences in real time, enhancing the overall customer experience.

Brands like Amazon Prime and Sephora are already setting the standard by customizing recommendations, rewards, and experiences to align with individual preferences.

To make the most of this trend, brands will need to ensure that they’re not only personalizing the rewards but also aligning those rewards with customers’ values.

This deeper connection will boost customer lifetime value (CLV) and ensure long-term loyalty.

2. Automation in loyalty programs Automation is another gamechanger: more and more brands are investing in automation to deliver personalized interactions at scale.

“Experimentation with AI will grow in 2025 and will be more usable. It seems every technology vendor has an AI solution, but in JANUARY 2025

ISTOCK/SANDRA MILENA VALERO ORJUELA

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MARKET RESEARCH

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MARKET RESEARCH 2025, there will be more focus on making those solutions as intuitive and usable as possible,” Jamie Cairns, Chief Strategy Officer at Fluent Commerce, recently said.

Automated systems can send customized offers, track customer behavior, and ensure that customers receive relevant communications, all in real time.

This will be particularly crucial as brands look to streamline operations and enhance the customer journey across both digital and in-store channels.

Automation also helps brands scale personalization efforts without adding a significant amount of labor.

As a result, customer engagement can become more consistent and immediate, increasing the likelihood of repeat business.

3. Sustainability in loyalty Consumers are increasingly demanding that brands align with their values, and sustainability is no exception.

Euromonitor’s Voice of the Consumer: Sustainability Survey, fielded January to February 2024, shows that nearly two thirds of global consumers are concerned about climate change and try to make eco-friendly choices.

In 2025, loyalty programs will need to reflect this shift by offering sustainable rewards and partnering with organizations that share a commitment to sustainability.

Brands that show they care about the environment will build stronger emotional connections with customers, helping them stand out in an increasingly competitive market.

What are the key loyalty trends for 2025? What are the new emerging loyalty models in 2025?

Emerging loyalty models in 2025 will include AI-driven personalization, gamification, and experience-based rewards.

Gamification will engage customers by adding gamelike elements such as points, badges, and challenges to loyalty ❱ DMN.CA

programs. Blockchain will enable transparent and decentralized reward systems. Experience-based rewards will replace traditional discounts, offering exclusive experiences like VIP events or travel perks.

Premium loyalty programs will also rise, providing high-value rewards and exclusive benefits to top-tier customers.

1. Gamification in loyalty Gamification is one of the most exciting trends for 2025, with 47 percent of consumers saying they seek more immersive experiences that also incorporate gamification and play and joy.

By incorporating elements like challenges, badges, and levels, brands can turn loyalty programs into a fun and engaging experience.

Customers will be more likely to return if they feel like they are progressing through a game rather than just earning points.

For example, Biscuit uses gamified features to encourage customer participation, such as offering rewards for completing specific actions or challenges. This not only increases engagement but also helps make loyalty feel like a more rewarding, long-term relationship.

loyalty feel like an essential benefit, not just an add-on.

What are the new emerging loyalty models in 2025?

Key challenges facing loyalty programs in 2025 include balancing privacy with personalization and proving the ROI of loyalty initiatives.

As customers become more concerned about data privacy, brands will need to ensure their loyalty programs are transparent and secure while still offering personalized experiences.

Measuring the effectiveness of loyalty programs and justifying the investment will be crucial.: brands will need to demonstrate clear ROI by tracking customer engagement, retention rates, and lifetime value, all while aligning loyalty strategies with broader business goals.

2. Experience-based rewards In 2025, loyalty will become more about the experiences than just the products. Consumers are shifting away from transactional rewards and valuing exclusive experiences.

This could range from special access to events, VIP-only sales, to one-on-one consultations.

Programs like Sephora’s Beauty Insider are leading the charge by offering personalized beauty consultations and exclusive shopping experiences.

1. Balancing privacy with personalization While consumers crave personalized experiences, there’s a fine line between providing tailored services and infringing on their privacy.

63 percent of Internet users believe most companies aren’t transparent about how their data is used, and 48 percent have stopped shopping with a company because of privacy concerns.

With tightening regulations like GDPR and CCPA, companies must ensure they handle customer data responsibly, making transparency and security a top priority.

3. Premium loyalty programs Premium loyalty memberships are gaining momentum. These programs offer immediate, tangible benefits like discounts, early access to products, or exclusive events.

Brands like Amazon Prime and Walmart+ have shown that customers are willing to pay for memberships that provide ongoing value.

Many businesses are investing in new premium program features, signaling a shift toward making

2. Proving ROI of loyalty programs As companies face budget constraints, proving the ROI of loyalty programs will become even more important. The traditional focus on short-term revenue will shift to long-term metrics like Customer Lifetime Value and retention rates.

Brands will need to provide data-backed proof of the financial impact of their loyalty programs to justify further investment.

That’s why the right analytics

tool is the key for a successful loyalty program: the perfect system allows you to create charts by combining data, letting you utilise your very own dashboard of custom graphs to make everything intelligible and easily actionable.

Key challenges facing loyalty programs in 2025 How can you plan ahead for 2025? With so many changes on the horizon, it’s essential for brands to plan ahead. For example, our Loyalty Promotion Calendar for 2025 will be an invaluable tool for mapping out your loyalty strategies, ensuring that your programs align with key trends, such as personalization, automation, and sustainability. y strategically planning your loyalty efforts, you can capture customer attention during peak times and foster deeper connections with them throughout the year.

Using this calendar, you’ll be able to target key moments when your audience is most likely to engage, whether that’s during major shopping holidays or special brand events. Plus, the 2025 Loyalty Promotion Planner offers exclusive resources to help you optimize your campaigns and build a loyalty program that is truly future-ready.

In Conclusion The customer loyalty landscape is changing rapidly, and brands that fail to adapt may find themselves losing ground. The key trends for 2025, personalization, gamification, automation, sustainability, and premium programs, are shaping the future of customer loyalty.

By investing in these trends and using the right tools and tech, you can ensure that your brand remains competitive and continues to build lasting relationships with customers.

SARA RABOLINI is a Marketing Executive with White Label Loyalty.

JANUARY 2025

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• Build efficient and effective financial systems to enhance payments and billings between their companies and their customers and vendors?

• Convert all the data and information they collect from every contact point into tangible benefits that increase revenue and reduce costs?

• Equip their companies with the tools, technology, systems and hardware needed to manage their operations, to create new services or products, and deliver them to their market?

• Manage their customers with smoothly functioning support departments that are properly staffed and equipped to solve problems, foster loyalty and retain customers?

• Make any or every step in that chain better, faster, cheaper, and more profitable?

To advertise or get more information and media kits: Steve Lloyd 905-201-6600 ext 225 | 1-800-668-1838 | steve.lloyd@lloydmedia.ca

We can help you tap into the ecosystem at the points that will drive your campaigns.

DM Magazine, www.dmn.ca

Total Finance magazine, www.totalfinance.ca

Being data-driven is complicated.

We can help.

Harnessing data across your organization to be truly data-driven is not easy.

Contact us to learn more about how our PRIZM™ segmentation system helps you connect our data to activation for campaigns that drive real results.

Ratio of Website Visitors to In-Store Visits s Augu

6.0

t ‘20

h Marc

‘21

h Marc

5.0

‘22

4.7

4.0

3.0

2.0 1.9

2.0

1.0 1.0

2019

Nigeria

Retailer A

Toronto CSD by Dissemination Area

2020

2021

March

January

February

October

December

November

July

September

May

June

August

April

March

January

February

December

November

July

August

October

September

May

June

April

March

January

February

December

November

July

August

October

May

June

September

India

April

March

January

China, People’s Republic of

February

0.0

Dominant Country of Origin

2022

Retailer B

Changing Demographics

Online & Offline Habits

With an aging population, increased immigration, relocation and changing commuter habits, our suite of demographic products help you stay on top of the changes – nationally, by neighbourhood, and everywhere in between.

EA’s ground-breaking mobile movement and web behaviour databases not only help you keep track of the “clicks versus bricks”, but know which Canadians are driving these trends nationally and locally as those behaviours change.

Deposits by Region: Penetration vs. Wallet Share

Vulnerability Index | Social Vulnerability Unemployment Rate

49.1% Index:188

124 SOCIAL VULNERABILITY INDEX*

Community Involvement

11.7% Index:117

Perceived mental health is fair or poor

People know well enough to ask favour (none)

51.5%

Index:197

Deepen and Maintain

Index

"You cannot be too careful in dealing with people"

14.9%

Strategy: Acquisition

91

Wallet Share

Household Size -1 Person

24.6%

Index:118

Index:235

Deepen Relationships

Develop New Strategies Close relatives (0-2)

Close relatives in same city (0-2)

34.7% Index:156

47.1% Index:110

Close friends (0-2)

33.4% Index:124

Close friends in same city (0-2)

29.9% Index:107

Product Penetration (HHs that Hold Product)

Attitudes, Mindsets, Social

Finances

Environmental concern, privacy, trust and social connectedness.

Psychographic indicators have shifted and Canadians’ social circumstances have changed. It’s never been more important to look at these indicators and map them to different populations.

Comprehensive, updated financial metrics on Canadians.

Understand who is most stretched to make ends meet, who is affected by property market conditions and who has money to donate to their favourite charities.

Desktop

Mobile

Out of Home Digital OOH

Media Activation

Social Media

Email

SMS

Linear & Connected TV

Direct

Radio

Print

EA’s ever-growing network of over 50 activation partners includes adtech platforms, media agencies, publishers, broadcasters, list providers and distribution companies to ensure you can use our data for analysis and then reach your target audience.

Looking to achieve the results that data promises? Ask EA. For your free PRIZM consultation, contact us at: https://www.environicsanalytics.com/dm-mag