DM Magazine February 2025

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Data is the Next AI Frontier

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A Glimpse into the Future

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VOL. 38 • NO. 2 • FEBRUARY 2025

THE AUTHORITY FOR THE DATA-DRIVEN BUSINESS

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What’s Next for AI in Marketing?

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Vol. 38 | No. 2 | February 2025

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DESIGN / PRODUCTION Jennifer O’Neill - jennifer@dmn.ca ADVERTISING SALES Steve Lloyd - steve@dmn.ca CONTRIBUTING WRITERS Ricky Chopra Chris Davies Kenneth Mansfield Richard Schenker LLOYDMEDIA INC. HEAD OFFICE / SUBSCRIPTIONS / PRODUCTION:

ON THE COVER talking points

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The Next Frontier of AI? Data Quality

Talking Points

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TECHNOLOGY

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Looking Ahead: A Glimpse into the Future of Artificial Intelligence

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Outsourcing Your Marketing: How to Maximize the Relationship with Your Agency

What Love Songs Can Really Teach Us About Brand Loyalty

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The QSR Contest Wars Are Heating Up This Winter in Canada DMN.CA ❰

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talking points

When Loblaw Companies Limited recently announced its unaudited financial results for the fourth quarter ended December 28, 2024, and the release of its 2024 Annual Report, the company’s management emphasized its focus on retail excellence and produced another quarter of strong operational and financial results.

Growing customer engagement of personalized PC Optimum™ loyalty offers, combined with impactful in-store promotions and more everyday value drove higher traffic and strong market share gains in Food Retail.

In Drug Retail, Pharmacy and Healthcare Services continued to perform well. Front Store sales reflected growth across the beauty categories, led by prestige. As expected, this was offset by the impact from the exit from the sale of certain items in the electronics category. Over the 2024 fiscal year, the Company invested in its network, opening 52 new Drug and Food retail stores, and 78 new pharmacy care clinics. In 2025, Loblaw plans to further invest in its network by opening approximately 80 new food and drug stores, and 100 new clinics. The Company also marked a major milestone, with the opening of its first T&T® Supermarket in the United States in the fourth quarter of 2024. Loblaw’s strategy, unique assets, and dedicated colleagues position it well to continue to serve the diverse needs of Canadians today and in the future.

“We are very pleased to deliver another year of consistent operational and financial performance, reflecting our continuous focus on execution of our strategies and retail excellence,” said Per Bank, President and Chief Executive Officer, Loblaw Companies Limited.

“We are providing unmatched value which is resonating with Canadians. I am thankful for the commitment and contributions of our colleagues across the organization.”

A decrease of just under 12 percent per common share was primarily driven by a noncash PC Optimum loyalty program charge of $129 million ($94 million, net of income ❱ DMN.CA

taxes). This non-recurring charge represents the revaluation of the loyalty liability for outstanding points, reflecting higher PC Optimum member participation and higher redemption rates.

Retail segment sales in the fourth quarter of 2024 were $14,579 million, an increase of $422 million, or 3.0 percent. Food Retail (Loblaw) sales were $10,138 million and same-store sales grew by 2.5 percent (2023 – 2.0 percent). Food retail same-store sales growth was approximately 1.5 percent after excluding the favourable impact of the timing of Thanksgiving. The Consumer Price Index as measured by The Consumer Price Index for Food Purchased From Stores was 2.4 percent (2023 – 4.9 percent) which was higher than the Company’s internal food inflation; and Food Retail traffic increased and basket size increased.

A decline in front store same-store sales was primarily driven by the decision to exit certain low margin electronics categories, the impact of the closure of postal services during the Canada Post strike, and lower sales of food and household items, partially offset by the continued strength in beauty products.

Earnings before income taxes in the fourth quarter of 2024 were $38 million, a decrease of $23 million. The decrease was primarily driven by lapping of prior year benefits associated with the renewal of a long-term agreement with Mastercard, and a PC Optimum loyalty program charge of $30 million (see “Other Business Matters” below).

This decrease was partially offset by the yearover-year favourable impact of the expected credit loss provision.

PC Optimum loyalty program In the fourth quarter of 2024, the Company recorded a charge of $129 million, of which $99 million was recorded in the Retail segment and $30 million was recorded in the Financial Services segment. This charge represents the revaluation of the loyalty liability for outstanding points, reflecting higher PC Optimum member participation and higher redemption rates.

Strategic Update Loblaw’s portfolio of businesses remains strong and wellpositioned as economic pressures continue to drive consumers to its banners, in search for value, quality, service and convenience.

The Company’s best in class assets continue to meet customers’ everyday needs for food, health and wellness – supporting Loblaw’s purpose: helping Canadians Live Life Well.

The Company will continue to focus on three strategic pillars in 2025: delivering retail excellence; driving growth; and investing for the future.

Driving Growth Loblaw continues to invest in targeted growth areas to further evolve and differentiate its portfolio of assets and generate competitive advantage. A differentiator and area of focus is Loblaw’s

ability to digitally engage customers with a suite of proprietary assets — Loblaw Digital (including PC Express™), Loblaw Advance™, and PC Optimum, Canada’s strongest loyalty program. The Company will focus on enhancing these platforms across each of its businesses, improving the customer experience and functionality. In particular, the Company’s PC Optimum loyalty program continues to evolve, with more meaningful personalized offers, and more effective promotions, all toward strengthening the loyalty loop and increasing the share of customer wallet. The Company is also evolving and tailoring its store network to better serve customers. In 2024, the Company converted 38 stores to Hard Discount banners, opened 52 new food and drug retail locations, and added 78 new pharmacy care clinics across Canada, driving sales growth across its divisions.

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RHEI, a global leader in content distribution and marketing for the creator economy with more than 600M monthly users, today unveiled Made, an emotionally intelligent AI platform that provides creators of any size with a virtual dream team. Made recently introduced two AI agents: Milo, Made’s Creative Director, and Zara, a Community Manager for all.

This team consists of fine-tuned AI agents that address the complex strategic, tactical and operational challenges creators experience as they try to create exciting content for all platforms, formats, and languages. Made’s specialized AI agents can adapt to and align with creators to address their needs proactively, driving sustainable growth and reigniting their creativity.

Milo transforms creator visions into compelling, high-impact stories, aligning seamlessly with their unique voices while driving engagement and performance. As a master brainstormer, he refines concepts into polished masterpieces. Meanwhile, Zara bridges the gap between creators and their fans, fostering authentic connections.

Designed to grasp audience sentiment and engagement strategies, she ensures fans feel heard, valued, and connected to the creator’s journey. By providing deep community insights and strategic recognition, Zara strengthens fan loyalty and cultivates a sense of shared purpose, making Made an essential partner for today’s content creators.

Each Made agent is personalized to the creator and highly in-tune with relevant micro and macro trends. The AI agents perform everything from analyzing trends, creator interactions, and audience behaviors, to distilling successful strategies from RHEI’s 5 FEBRUARY 2025

// 5 petabytes of proprietary data.

“Made represents a paradigm shift in how we approach creativity and innovation,” said Shahrzad Rafati, CEO, RHEI. “The intelligence and sheer scale of foundational models have already begun to surpass what we’re consistently able to tap into as humans. Our agents are not just connecting increasingly complex foundational models with the human brain; we’ve built highly complex algorithms for each agent, equipping them with vital skills to be the best possible creative partner. This elevates the agentic approach to a true symbiosis between humans and AI. Made is the first comprehensive ecosystem of AI agents for human creativity.”

Made is designed to be a complementary tool, not a substitute or replacement for human creativity. The creator economy has boomed in recent years, increasing more than 400 percent in the last four years to top more than 200M creators, with at least 80M new creators expected to join the creator economy in 2025. All the while, a reported 79 percent of creators say they are experiencing burnout.

There is a need for new solutions, and Made’s AI agents fit the bill.

“What’s really different about Made’s AI agents is that they are predictive and proactive, with unique skills that integrate seamlessly into creators’ daily lives,” said Lewis Ball, Chief Strategy and Product Officer, RHEI. “Our focus has been to build agents that truly represent personalized intelligence for each creator with effortless interaction. Today we’re highlighting Made’s Creative Director, Milo, who is a visionary partner behind every creative work, and Made’s Community Manager, Zara, who is the vital bridge between creators and their fans.”

The platform’s launch will follow a phased approach, starting with a closed beta. The initial rollout includes core agents such as a Creative Director, Community Manager, and Amie, a Relationship Manager who enables creators to seamlessly navigate the platform and maximize the potential of each team member. RHEI plans to expand the platform to offer additional agents and skills over time.

RHEI’s mission is to redefine content distribution and marketing to enable and amplify the world’s most influential creators and media companies. With a focus on pioneering personalized, effective, and intelligent AI solutions, RHEI connects IP owners and fans across digital platforms, reaching a global audience of 600 million unique viewers each month.

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The appeal of new technologies such as GenAI, social commerce, passkeys and pay-by-bank are viewed through a ‘security first’ lens by Canadians.

FEBRUARY 2025

Canadians are divided in embracing evolving technologies that have the potential to change our shopping experiences along with how we pay and get paid, reveals a new study from Payments Canada.

Still, concerns around security, lack of familiarity and a sense of contentment with existing payment and shopping experience technologies impact the appeal of newer innovations. This concern surrounds current and potential innovations like generative artificial intelligence (GenAI), social commerce and pay-by-bank.

“Canadians prioritize security and privacy while also expecting ease and convenience in their shopping experience, particularly in the way they pay,” said Jon Purther, Director of Research at Payments Canada. “They seek innovations that strike a balance between these factors. However, Canadians are divided on the appeal of innovations that have the potential to reshape our shopping and payment experiences, with security being a key concern. In our study, we also found that many Canadians had not yet formed a view around their appeal, which infers that they are reserving judgment until they become more familiar with newer technologies.”

Key study findings:

Canadians have polarizing perspectives around leveraging GenAI (generative artificial intelligence). GenAI has many applications when it comes to making payments or receiving services. This includes generating personalized discounts or pricing for consumers, providing them with virtual shopping assistants such as chatbots or providing product recommendations. GenAI can also support fraud detection by flagging unusual transaction activities, predicting user payment preferences and auto-filling details to speed up the checkout process while also generating personalized loyalty programs.

Canadians are divided on using GenAI to improve their work and lifestyle; 43 percent are interested in leveraging these technologies, 44 percent are not interested and 13 percent are unsure.

Younger Canadians aged 18-34 have more interest (56 percent) than middle-aged Canadians 35-54 (48 percent) and older Canadians aged 55+ (31 percent).

Fraud detection and prevention is thought to be the most beneficial way of leveraging GenAI among Canadians (45 percent).

Canadians have mixed views on the appeal of GenAI to enhance the online shopping experience; 28 percent consider it appealing, 34 percent say it’s unappealing to them and 38 percent say it’s neither appealing nor unappealing.

GenAI-enhanced online shopping experiences are more appealing to younger Canadians aged 18-34 (39 percent) compared to middle-aged Canadians (29 percent) and

older Canadians (21 percent).

More than 1 in 10 Canadians have used social media commerce but security concerns are a key deterrent. Social commerce enables consumers to buy and sell products directly through social media platforms without leaving the platform or app.

Overall, 12 percent of Canadians have sent or received money from a friend or family member using social media platforms, such as Instagram, WhatsApp, Messenger or TikTok. Overall, 13 percent of Canadians have made a purchase within social media platforms, such as Instagram, Pinterest and TikTok. Social commerce appeals to around 1 in 5 Canadians (18 percent), with 46 percent who say it is unappealing and 36 percent who say it’s neither appealing nor unappealing.

Of those who consider social commerce appealing, reasons include convenience and ease (40 percent), useful and interesting (6 percent) and a preferential way of purchasing items (5 percent).

Among those who do not find social commerce appealing, key concerns include security (48 percent), not being of interest or useful (14 percent), not using or liking social media (10 percent) and not wanting to make impulsive purchases (5 percent).

Pay-by-bank, which allows consumers to make transactions directly from their bank account to the merchant, bypassing traditional payment methods like credit and debit cards, is appealing to 29 percent of Canadians. Consumers select pay-bybank (also known as account-to-account) at checkout, typically on an e-commerce website, app or point-of-sale terminal, which then redirects the consumer to their online banking platform or app where they can then approve the transaction.

Overall, 29 percent of Canadians find pay-by-bank appealing, 33 percent do not find it appealing and 38 percent are neutral.

Newcomers to Canada (53 percent) and gig workers (47 percent) are significantly more likely to use pay-by-bank. The key attraction of pay-by-bank is security with 32 percent of Canadians indicating it offers greater security. This is because when making an online purchase consumers do not have to enter their credit or debit card information directly on the merchant site. Instead, they are redirected to their online/mobile banking platform to confirm the payment transaction.

The payment is made via an account-toaccount (A2A) transfer directly from the consumer’s bank account.

Incentives would encourage Canadians to use pay-by-bank, with 60 percent more likely to use it with incentives such as cashback offers or rewards points.

Only 22 percent of older Canadians would use pay-by-bank, compared to 34 percent of young Canadians and 28 percent of middleaged Canadians.

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talking points

standards that support these systems. In 2024, our systems cleared and settled $107 trillion — more than $424 billion every business day.

Some of the transactions that pass through our systems include debit card payments, pre-authorized debits, direct deposits, bill payments, wire payments and cheques.

Payments are an essential part of our economy and way of life. From a down payment on a home, an invoice paid to a local business or a first paycheque — payments keep Canadians and the economy moving forward.

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Half of Canadians (50 percent) find passkeys an appealing alternative method of user authentication that eliminates the need for usernames and passwords. Passkeys are integrated into online payments during checkout and linked to the consumer’s bank account, digital wallet or card issuer, with the consumer being prompted to authenticate the purchase with a passkey on their device using biometrics (for example, their fingerprint, facial or voice recognition). Passkeys are considered more secure than passwords because there isn’t a string of characters to memorize, making them harder to hack.

Passkeys do not need to be changed, cannot be stolen by someone guessing or peeking over your shoulder, and there is no way to accidentally use one on the wrong website.

Overall, 47 percent of Canadians say they are likely to use passkeys instead of passwords for logging into their email and online/mobile banking accounts, or e-commerce sites if the option was available. However, 23 percent do not find passkeys appealing, and 27 percent remain neutral.

Among those that do not find passkeys appealing, key concerns include it being less secure (27 percent), lack of interest or need (20 percent), a perception of complexity/ finding it confusing (16 percent), lack of understanding (12 percent) and lack of trust (7 percent).

About the study: 1,500 Canadians were interviewed online each wave, between February 26 and March 8, 2024, (wave 1) and between June 24 and July 5, 2024, (wave 2) using Leger’s online panel. The margin of error for this study was +/ 2.5 percent, 19 times out of 20.

Payments Canada makes payments easier, smarter and safer for people living in Canada by providing secure and resilient infrastructure where payments are cleared and settled between financial institutions. We are a public purpose organization that owns and operates Canada’s payment systems, Lynx, the Automated Clearing Settlement System (ACSS) and the forthcoming Real-Time Rail (RTR), and are responsible for the by-laws, rules and ❱ DMN.CA

As the e-commerce landscape grows ever more crowded, capturing and retaining customers’ attention has become even more challenging.

Winning customers is no longer about competing on price alone — it’s about crafting unique products, building distinctive brands, and connecting with consumers on a deeper level. As e-commerce continues to surge, businesses must navigate fierce competition and find strategies that truly set them apart.

In this interconnected world, isolated efforts are no longer enough. Success now depends on collaboration — between brands, technology, and ecosystems. Tapping into the power of partnerships has become the key to unlocking innovation and driving localized growth in the ever-evolving e-commerce landscape.

Today’s merchants are no longer just sellers — they’ve become architects of a global business ecosystem. While traditional commerce platforms still matter, the rise of independent online stores has unlocked new opportunities for brands to connect with customers on their own terms.

This evolution brings its own set of challenges, from inventory management to marketing, payments, and fulfillment. One company that is addressing these issues head-on is Shoplazza, a global leader in retail commerce technology. By combining cuttingedge technology with a strong partner ecosystem, Shoplazza enables merchants to streamline operations and focus on what truly matters: building distinctive brands and delivering outstanding customer experiences.

In line with this vision, Shoplazza hosts its annual Shoplazza Awards to celebrate merchants who leverage their brand strength and customer insights to successfully expand into both cross-border and local markets. The awards also spotlight exceptional partners recognized for their technical innovation, deep understanding of merchant needs, and close collaboration with the platform. The 2024 winners, announced recently, exemplify how collaboration fuels success and reshapes the future of commerce.

A strong brand is essential for online businesses to succeed, as is the ability to forge meaningful connections with consumers.

Achieving this requires a deep understanding of customer needs, a focus on brand building, and strong platform support. The 2024 Shoplazza Awards highlighted merchants who excelled in these areas.

One such company is MUJOSH, a fashion eyewear brand that used Shoplazza’s omnichannel solutions to integrate its online and offline operations. This collaboration resulted in simplifying the customer journey, which in turn drove brand loyalty. Similarly, ICOICE, a DTC fast-fashion lens brand, customized platform features to introduce a subscription model and enhance its sustainability-focused image, ultimately boosting retention and brand value.

Meanwhile, Vitamin World, a 47-year-old health and wellness brand, partnered with Shoplazza to overcome system integration challenges, resulting in an impressive 247.3 percent year-over-year GMV growth during Black Friday 2024. This success is setting a high bar for what traditional businesses can achieve when they embrace digital solutions.

These brands are an example of how consumer-centric strategies, supported by Shoplazza’s tailored solutions, are driving success in today’s competitive market.

Through this partnership, they’re not only building lasting connections with customers but also achieving sustained growth and setting new industry standards.

Teaming up with strategic partners expands the capabilities of any platform or solution, providing sellers with a wider array of tools and expertise. By collaborating with key industry players, platforms can help merchants streamline operations, improve customer experiences, and drive innovation within their own business ecosystems. These partnerships create a synergistic effect, where the combined value of each player exceeds the sum of its individual contributions, helping businesses scale more effectively and stay ahead of the competition.

Similarly, Narivex, a global digital marketing platform, brought localized expertise to streamline TikTok onboarding, fueling growth for global brands looking to tap into emerging markets. Meanwhile, payment leaders like Mastercard and Payoneer launched innovative solutions that simplified payment processes, boosted conversion rates, and optimized cross-border transactions, further enhancing the merchant experience.

These partners not only contributed cutting-edge technologies but also exemplified the power of collaboration with Shoplazza, reinforcing how strong partnerships can propel innovation and create greater value for merchants.

FEBRUARY 2025

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Speaker Shawn Stewart, President, Air Miles.

SESSION: A FIRESIDE CHAT. The future of Air Miles, the potential for loyalty programs in Canada

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Senior Vice President, Strategic Marketing & Innovation, Parkland (Journie Rewards).

See the full speaker roster and sign up now to save with Early Bird Registration discounts for single, dual or team registrations.

To Register or Get More Information

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TECHNOLOGY

The Next Frontier of AI? Data Quality

BY KENNETH MANSFIELD

F

or marketers across industries, there’s no doubt that AI continues to be the topic du jour. Over the past few years, we’ve learned how to use tools like ChatGPT and Gemini to support us with basic tasks like providing meeting summaries, drafting cover letters — and even recommending holiday gifts.

But what makes an AI tool actually worth using? How do we know that the AI tools we build, and implement are secure, high-quality and trustworthy products? Setting marketers up for success in AI is all about data inputs and outputs. Have you ever ❱ DMN.CA

entered an AI prompt that gave you an inaccurate answer or an image that was completely wrong?

Then, when you continue to ask the prompt more questions, clarify your request and add details, like magic, the answers become more predictive. What’s happening behind the scenes is telling data models what they’re doing right and wrong to create a stronger feedback loop.

It all starts with a solid foundation of clean, updated and accurate data. All in all, if you fuel your AI engine with inaccurate, poor or outdated data, the results will also be inaccurate, poor and outdated. In other words? Garbage

in, garbage out.

As a refresher, there are two main types of AI we typically encounter: predictive AI and generative AI, and how they work is pretty intuitive.

Predictive AI, well, predicts, and generative AI generates, but really what it comes down to is how they interact with data.

In general, when we talk about predictive AI, we’re talking about a methodology (like machine learning) that combs through existing data to forecast future outcomes, while generative AI uses existing data to respond to a user’s prompt and create original content.

Now let’s get back to how data quality impacts AI. At Epsilon, we

recommend evaluating data quality based on the following 10 key criteria.

10

Criteria to assess data quality

1. Privacy Privacy is the top consideration when it comes to data quality and remember: It should never be sacrificed for the sake of performance.

Data providers should be able to share how they comply with current legislation and are preparing for new legislation.

Always review privacy policies and opt-out language and how FEBRUARY 2025

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TECHNOLOGY

companies are handling consumer reporting, data deletion and the handling of sensitive personal information.

AI benefit: Privacy protects individual rights, builds trust in AI systems (which can aid in fair and accountable decision-making) and promotes using AI technology ethically by minimizing the potential for discrimination and manipulation via personal data.

2. Accuracy To compare and evaluate data accuracy, use a truth-set file that has your full confidence. While we all know that there is no universal truth set for evaluating data FEBRUARY 2025

quality at scale, there are ways to use smaller-scale options to get a relative read of data accuracy. This ensures you’re connecting to the right people at the right time with the best-possible messages and offers to maximize your marketing dollars.

AI benefit: Accuracy ensures that the AI models can make accurate predictions and decisions.

Erroneous or noisy data can lead to incorrect model training, resulting in poor performance and unreliable outcomes.

3. Coverage The data coverage conversation should determine how much of

the target universe is covered, as well as the completeness of each record. High coverage with little depth of useful information won’t serve a purpose — coverage must go beyond name and address to include multiple channels. This translates to consistently higher identification rates across devices for more effective omnichannel marketing.

Many providers offer data hygiene and identity-completion solutions that clean and fill holes in customer data by appending or reverse-appending contact information (e.g., address, phone number and email). Make sure you understand average match rates

and the quality of the referential data file that’s used. Tradeoffs between coverages and accuracy will happen, so the key to success is balancing, picking a priority and achieving high marks in both.

AI benefit: Carefully curated, clean data can mitigate biases.

Incomplete or skewed datasets can lead to biased models, and cleaning can involve ensuring that the dataset is representative and balanced.

4. Granularity Granularity characterizes the level of detail in a data set. Granular data is broken down into the smallest pieces possible to be more DMN.CA ❰

TECHNOLOGY 9. Omnichannel activation Data needs to be available for use across channels. This includes traditional channels (like direct mail and email) and all major digital platforms (including DSPs, DMPs, social networks and connected TV). Using a consistent identity for each consumer across all their online and offline channels drives a consistent experience.

You should understand what ID graph, matching methodology and partners your brand is using for data activation and identity resolution across different channels and devices. Data should hold up across all of them with scale and accuracy. Keep in mind that both your audience definition and activation channels may be different for upper-funnel awareness versus lower-funnel conversion.

AI benefit: Facilitates seamless integration and activation across multiple channels, enabling AI systems to deliver personalized and coherent experiences to users, regardless of the platform or touchpoint.

5. Timeliness When it comes to data, timeliness tells us how much time has passed between when the data became available and when the actual event(s) occurred. Generally speaking, recent data is the most useful, so it’s important to understand how often data is refreshed.

Consumers’ attributes each have different sensitivity to timeliness, but for data that adds extreme value (such as financial, in-market, propensity to purchase or other economic or activity-influenced attributes), timeliness is even more crucial.

AI benefit: Algorithms can process data free of redundancies, duplicates and irrelevant information faster with less computational cost.

6. Predictive power Predictive power is the cornerstone of the data-quality evaluation process and is directly associated with data performance.

Understanding what data types lead to successful interactions — or what data would most likely generate specific activities — is the focus of this assessment and frequently requires use of more advanced data and analytics.

Well-balanced models with data elements reflecting depth, breadth, variety and uniqueness typically drive the best performance.

AI benefit: Clean data plays a critical role in building models that are able to effectively generalize new, unseen data. If the training data contains irrelevant or misleading patterns, the model might fit the noise instead of the ❱ DMN.CA

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defined and detailed. For example, while a person’s entire address could be in a single field, a more granular approach would be to divide the address into multiple fields like street number, street name, city, state and ZIP code.

One of the advantages of granular data is that it can be aggregated and disassembled to meet the needs of different situations.

AI benefit: When data is wellorganized and labeled, it’s easier to trace how decisions are made, which is crucial for explaining AI decisions, particularly in sensitive applications.

underlying trends, affecting its ability to generalize.

7. Consistency Consistency requires that information or certain attributes will exist or be accurate in each observation. For example, if a data solution for an insurance policyholder requires knowing their mortgage value, age and house’s square footage, this data must be consistently available.

Consistency is key for modeling solutions that require variable stability.

AI benefit: Uniformity across datasets leads to consistent AI model performance and predictions by eliminating discrepancies and variabilities that could otherwise hinder the decision-making progress.

8. Transparency Data transparency is becoming

more important, especially for certain industries. The Interactive Advertising Bureau (IAB) Tech Lab has partnered with leading associations and companies to create an industry standard, a Data Transparency Label. Similar to an nutrition label, it tells marketers what’s inside the data segments they buy, providing details on source, collection, segmentation criteria, recency and cleansing. It’s intended to give every marketer, agency, data provider and publisher a transparent view of syndicated audience segments.

AI benefit: Structured and wellorganized data allows AI models to become more transparent and interpretable, allowing stakeholders to understand how decisions are made and enhancing model explainability. It is highly recommended that real people should monitor any AI outputs in a supervised environment.

10. Usefulness Usefulness assures that data achieves business goals and delivers value. The only way to gauge it is to test the data and see if it works. Ideally, test it how you plan to execute it.

For specific campaigns, assembling a valid test is critical, so be mindful of the number of variables so you can isolate the data’s performance. It’s an opportunity to revisit and optimize the data types and variables for future campaigns and see if something new or different can improve performance. Qualitative feedback from users is also important to ensure all users are maximizing their data usage and the knowledge the data provides.

AI benefit: By removing noise and irrelevant information, clean data improves the relevance and quality of insights generated by AI, making the outputs more actionable and valuable for decision-making and strategic planning.

KENNETH MANSFIELD is a Senior Director of Product Management at Epsilon.

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TECHNOLOGY

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Looking Ahead: A Glimpse into the Future of Artificial Intelligence

BY RICKY CHOPRA

Z

enith Global held its first AI Day in November, marking a significant milestone in the company’s journey towards embracing and integrating artificial intelligence into its operations.

Held at Zenith’s headquarters in London, the event was a vibrant mix of presentations, workshops, and interactive sessions, designed to deepen understanding and harness the potential of AI technologies.

The morning featured insightful presentations, including media partner guests like Google, that helped attendees dive into the multifaceted world of AI, discussing its myriad applications, ethical considerations, and envisioning its future trajectory.

The afternoon was a handson workshop where teams brainstormed innovative ways AI could power each stage of Zenith’s strategic planning framework, the ROI Experience Platform.

Ricky Chopra, Global Digital Business Director and head of Zenith’s AI Taskforce, said: “We are thrilled to explore the vast potential of AI. Our dedicated AI taskforce is already investigating ways to integrate cutting-edge AI solutions into our daily operations, FEBRUARY 2025

aiming to enhance efficiency, accuracy, and innovation in our industry. This marks a significant step in our journey towards a more data-driven and intelligent media landscape.”

Four key takeaways 1. Subject matter experts Our clients rely on us to be at the decision-making experts. Whether solutions are generated by humans or AI, the responsibility for the outcomes rests with us. This paradigm shift in accountability highlights the evolving role of AI in business decision-making processes.

2. AI is best used as support A standout analogy compared generative AI to a team of interns. This perspective vividly illustrates how AI can assist in daily tasks, but emphasizes the need for diligent oversight, quality checks, and constructive feedback, ensuring that AI tools learn and evolve effectively.

3. It’s quality, not quantity The cornerstone of effective AI utilization is the art of crafting quality prompts. During a Prompt Workshop, participants learned how to refine their questioning techniques,

highlighting how the calibre of input significantly influences AI-generated outcomes.

4. Stronger together A handful of the 20 ideas presented during the workshops are currently being developed further to be hard-wired into our planning process and scaled across our global planning community. This demonstrates our team members are our most valuable assets when it comes to innovation that helps deliver client ROI. Three focus areas Zenith’s AI Day was more than just an event; it was a commitment to the future where we unveiled our strategic focus areas at AI Day. These ‘big bets’ represent our commitment to leveraging AI in transformative ways, ensuring that we stay ahead of the game in a rapidly evolving digital landscape.

1. Enhanced audience insights By harnessing vast amounts of data from social media giants, we aim to deploy AI algorithms to uncover trends, cohorts, affinities, and patterns that might elude human analysis.

2. AI-assisted media planning Since the introduction of ChatGPT in 2022, Zenith

has been at the forefront of integrating AI into its media planning processes. Our goal is to seamlessly integrate AI into our platforms.

3. Data-driven business transformation By enabling natural language querying, users can then delve deeper, asking questions to generate comprehensive observations, insights, and recommendations.

These focus areas underscore Zenith dedication to not just adopting AI, but fully integrating it into the core of our business operations. By placing these ‘big bets’ in 2024, we are positioning ourselves to lead in an AI-driven future, delivering unparalleled value to our clients and stakeholders.

Benoit Cacheux, Global Chief Digital Officer at Zenith, said: “Armed with PublicisGPT, which leverages the most powerful AI models from OpenAI and other partners, Zenith is in a leading position to shape how Gen AI will create new applications for our future media landscape.”

RICKY CHOPRA is Global Business Director and Head of Zenith’s AI Taskforce.

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Outsourcing Your Marketing How to Maximize the Relation O

utsourcing marketing services is a crucial strategy for modern businesses looking to maximize efficiency, reduce costs, and access specialized expertise. This detailed article explores the benefits, strategies, and best practices for outsourcing marketing services. It is based on a webinar organized by helloDarwin with industry expert Jean-Baptiste Le Pesant President and Founder, the Beauvoir agency and Laurence Massé, Executive Director from SPCA Montreal.

One of the first questions you may ask yourself when considering the options for marketing is “Why Outsource Marketing Services?”. In this interview with the two ❱ DMN.CA

participants, they discuss this and other factors which influence those decisions.

1. Accelerate Processes and Increase Impact Outsourcing marketing services allows companies to speed up their projects by leveraging external experts. Specialized agencies can offer in-depth expertise and additional resources, thereby increasing the impact of marketing campaigns. This acceleration is crucial in a business environment where speed and responsiveness are essential to maintaining a competitive position. Furthermore, outsourcing reduces bottlenecks in the workflow, allowing internal teams to focus

on core initiatives while experts handle complex marketing challenges. Companies that outsource can also take advantage of seasonal or temporary campaigns without the need for long-term hires, making their operations more agile.

2. Access Specialized Skills Marketing agencies possess a wide range of skills that companies may not have in-house.

Whether it’s content creation, social media management, search engine optimization (SEO), or data analysis, agencies offer specialized expertise. This specialization enables companies to benefit from the latest trends and best practices in the industry.

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g: nship with Your Agency Additionally, marketing firms often have access to cutting-edge tools and analytics platforms, providing a data-driven approach to optimize strategies and maximize results.

Companies leveraging these services can remain ahead of industry changes, avoiding stagnation in an ever-evolving market landscape.

objectives without the constraints of hiring and training new employees. Additionally, businesses can scale their marketing efforts up or down as needed, ensuring that budgets are efficiently allocated. This adaptability is especially useful when entering new markets, testing new campaigns, or responding to unforeseen industry shifts.

3. Flexibility and Rapid Adaptation Agencies can quickly adapt to the changing needs of companies. They offer flexibility in terms of resources and skills, which is crucial in a dynamic economic environment. This flexibility allows companies to adjust their marketing efforts based on their strategic

4. Cost Reduction Outsourcing marketing services can also lead to significant cost savings.

By outsourcing, companies avoid the costs associated with hiring, training, and providing benefits to employees.

Additionally, marketing agencies can

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often offer competitive rates due to their economies of scale and access to advanced tools and technologies. Businesses also save on software and training expenses, as agencies already have the necessary infrastructure and expertise. Moreover, outsourcing reduces the risk of financial loss from poorly executed campaigns, as experienced professionals ensure optimized performance and return on investment.

5. Focus on Core Business By outsourcing marketing tasks, companies can focus on their core business. This allows internal resources to be freed up to concentrate on strategic and operational DMN.CA ❰

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aspects of the business, thereby improving overall efficiency and performance. Employees can dedicate their efforts to product development, customer service, and operational improvements rather than diverting time and energy to marketing functions outside their expertise. Furthermore, outsourcing marketing enables better collaboration between internal and external teams, fostering innovative ideas that align with company goals and drive longterm success.

How to Choose the Right Marketing Agency?

1. Clarify Expectations and Objectives Before choosing an agency, it is essential to clarify your expectations and objectives. Define what you expect from the agency, what your specific goals are, and what results you hope to achieve. Also, clarify the desired financial model, whether it is a fixed rate, hourly, or performance-based. Additionally, consider outlining your preferred communication style, project timelines, and any specific deliverables you anticipate. Providing detailed expectations upfront helps ensure that both parties are aligned, reducing the risk of misunderstandings and facilitating a smoother collaboration process.

2. Meet Potential Agencies Arrange meetings with potential agencies to assess their compatibility with your company.

Check their expertise, approach, and ensure there is a good cultural fit. These meetings also help evaluate their understanding of your needs and their ability to meet them. Prepare a list of key questions to ask, such as their experience with similar businesses, their approach to project management, and their flexibility in adapting to unforeseen challenges. Taking the time to understand their working style and responsiveness can prevent future conflicts and inefficiencies.

3. Consider Specialization and Versatility Some agencies specialize in specific areas such as digital marketing or content creation, while others offer a broader range of services. Choose an agency based on your specific needs. For ❱ DMN.CA

example, if your main goal is to improve your SEO, an agency specializing in that area would be ideal. Additionally, assess whether they have experience with your industry, as niche expertise can make a significant difference in campaign effectiveness. Versatile agencies with multidisciplinary teams can provide more comprehensive support, enabling seamless integration of various marketing efforts.

4. Evaluate Cultural Compatibility Cultural compatibility between your company and the agency is crucial for successful collaboration.

Assess whether the agency shares your values and vision.

Good cultural compatibility enhances communication, collaboration, and overall satisfaction. Consider factors such as work ethics, transparency, and creativity, as these elements can influence long-term success.

Conduct informal discussions or request case studies to gain insights into how they handle challenges and client relationships. A well-matched agency will act as an extension of your team rather than an external service provider.

5. Check References and Case Studies Request references and review the agencies’ case studies. This will give you an idea of their experience, skills, and ability to deliver results.

Testimonials from previous clients can also provide valuable insights into the quality of their work and reliability. When reviewing references, look beyond just positive feedback; ask about challenges faced and how they were resolved. This will provide a clearer picture of the agency’s problem-solving abilities and level of commitment. If possible, reach out to past clients directly to get an unbiased perspective on their experience with the agency.

Real-life Examples of Successful Outsourcing The Case of SPCA Montreal SPCA Montreal has outsourced several of its marketing services, including public relations, solicitation campaigns, and digital strategy development. Over the years, they have refined their approach to working with external agencies, ensuring a seamless integration of outsourced services into their operations. Here are some lessons from their experience: Internal Resources and Coordination: Even when outsourcing, effective internal coordination is crucial. A dedicated person to manage the relationship with the agency

is essential for smooth communication and coherent project execution. This role involves ensuring that the agency understands the brand’s core mission, maintains consistency across campaigns, and aligns with strategic objectives. Regular internal meetings help facilitate communication between teams and keep the agency accountable.

Onboarding and Training: Invest time to properly brief the agency on your organization, values, and expectations. Good onboarding reduces back-and-forth and optimizes collaboration. SPCA Montreal also provides detailed brand guidelines, audience personas, and communication protocols to new agencies, helping them quickly adapt to the organization’s needs. Continuous training sessions allow agencies to stay updated on internal policies and marketing priorities.

Agility and Adaptability: Choose an agency capable of quickly responding to changes and opportunities. Flexibility is a major asset for successful collaboration. The ability to pivot strategies in response to new market trends, shifts in donor behavior, or unexpected PR crises is critical. SPCA Montreal regularly evaluates agency performance, ensuring they can swiftly adjust messaging and tactics to maximize outreach and engagement.

Data-Driven Decision Making: Leveraging outsourced expertise means having access to industry-leading analytics and insights. SPCA Montreal utilizes these resources to assess campaign effectiveness, refine messaging, and identify key donor engagement trends. The agency provides in-depth reports, ensuring transparency and enabling better decisionmaking.

The Case of Beauvoir Agency The Beauvoir agency, led by Jean-Baptiste Le Pesant, specializes in brand creation, deployment, and strategic marketing. Their 360-degree approach covers all aspects of marketing, from strategy to execution, making them a valuable partner for businesses seeking comprehensive solutions. Here are some key points of their success: Varied Expertise: Beauvoir offers expertise in various fields, allowing clients to benefit from a holistic approach. Their team includes specialists in digital marketing, branding, graphic design, and content creation, enabling them to deliver well-rounded campaigns tailored to their clients’ unique needs. By integrating different marketing channels, they ensure consistency in brand messaging and customer experience.

Close Collaboration: Beauvoir works closely with its clients to understand their specific FEBRUARY 2025

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needs and develop tailored solutions. They conduct extensive brand audits and market research before crafting their strategies.

This collaborative approach ensures that the agency aligns with client objectives and remains responsive to feedback throughout the partnership. Regular workshops and strategy sessions foster innovation and keep campaigns aligned with market trends.

Innovation and Creativity: The agency stands out for its innovation and creativity, enabling brands to differentiate themselves in the market. They experiment with bold branding techniques, engaging storytelling, and cuttingedge digital tools to enhance brand visibility and customer engagement. Their team is constantly exploring new media formats, from interactive content to immersive marketing experiences, to captivate audiences and drive results.

Sustainability and Ethical Branding: Beauvoir also emphasizes sustainability and ethical branding practices, helping businesses build a socially responsible image. They work with clients to develop eco-friendly marketing strategies, reduce carbon footprints, and communicate corporate social responsibility initiatives effectively.

Both SPCA Montreal and Beauvoir Agency showcase the effectiveness of outsourcing when done strategically. By establishing clear communication channels, ensuring alignment in values and goals, and leveraging external expertise, businesses can enhance their marketing impact while maintaining operational efficiency.

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Tools for Effective Outsourcing ❯ Brief Templates - Structure your requests clearly and concisely ❯ Organizational Culture Tests - Evaluate cultural compatibility. ❯ Partner Evaluation Grids - Compare agencies objectively. ❯ Project Management Tools - Tools like Trello, Asana, or Monday.com can facilitate coordination. ❯ Key Performance Indicators (KPIs) - Define KPIs to measure the success of your collaboration.

Strategies for Successful Outsourcing Define a Clear Strategy - Identify goals, target audience, and a detailed plan. Establish clear objectives and determine measurable outcomes.

Ensure all stakeholders are aligned on key business goals and the strategic direction to optimize results. Create a roadmap that includes short-term and long-term goals, budget considerations, and contingency plans to adjust as needed.

Select the Right Partners - Choose agencies aligned with your vision. Conduct thorough research, review case studies, and verify references to ensure a good fit. Select partners who understand your industry, have experience in your target market, and share a compatible work culture. Look for agencies with a proven track record of adaptability and responsiveness to business needs.

Establish Effective Communication - Use structured communication channels. Define

preferred modes of communication, set regular check-in meetings, and establish reporting structures. Encourage open dialogue and set clear expectations regarding feedback loops, updates, and revisions. Leverage collaborative tools such as Slack, Zoom, or project management software to facilitate seamless interactions.

Monitor and Evaluate - Track agency performance against KPIs. Set clear performance indicators from the outset, including engagement metrics, conversion rates, and ROI. Use data-driven analysis to assess performance regularly and make necessary adjustments. Schedule quarterly reviews and performance audits to ensure continuous alignment with business objectives.

Foster a Partnership Relationship - Build trust for a long-term collaboration. Develop a transparent working relationship by maintaining open communication and sharing insights. Encourage collaboration between in-house teams and agency partners to enhance efficiency. Create incentive structures that reward agencies for exceeding performance benchmarks, fostering motivation and longterm commitment.

Benefits of Outsourcing Marketing Services Access to Cutting-Edge Technology - Benefit from the latest marketing tools. Agencies continuously invest in advanced software, data analytics platforms, AI-driven marketing automation, and audience insights tools.

This access allows businesses to stay ahead of DMN.CA ❰

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Risk Reduction - Share risks with the agency. Outsourcing marketing helps businesses mitigate risks associated with hiring and training an in-house team. Agencies bring years of experience in navigating market fluctuations, changing consumer trends, and evolving digital regulations. Additionally, they provide contingency plans for crisis management, helping companies react swiftly to unexpected PR challenges or economic downturns. Agencies also absorb some of the risks tied to campaign performance, ensuring businesses receive expert-driven strategies with minimal exposure to failure.

Innovation and Creativity - Gain fresh perspectives and ideas.

Marketing agencies bring a dynamic and diversified team of creative professionals, including strategists, designers, and content creators, who are immersed in various industries. Their crossindustry exposure enables them to offer unique, outside-the-box solutions that an internal team might overlook. By outsourcing, companies benefit from innovative storytelling, engaging social media campaigns, and visually compelling branding efforts, all tailored to captivate target audiences effectively.

Focus on Innovation - Agencies foster creative strategies. A dedicated marketing agency constantly tests and implements innovative tactics, from experimental ad formats to interactive digital experiences.

Their expertise in emerging trends such as augmented reality, personalized content, and influencer partnerships allows businesses to stay ahead of industry advancements.

Companies can leverage this innovative edge to maintain ❱ DMN.CA

relevance in fast-paced markets and deliver more engaging brand experiences to their customers.

Improved Content Quality Higher-quality marketing content.

Agencies specialize in crafting polished, audience-specific content that aligns with a company’s brand voice and strategic objectives. Their teams include professional writers, designers, and videographers who ensure every piece of content, from blog posts to promotional videos, meets high-quality standards. This results in increased engagement, enhanced brand perception, and more effective storytelling that resonates with potential customers, ultimately leading to higher conversion rates.

Challenges and Solutions for Outsourcing Marketing Services Maintaining Brand Consistency - Provide style guides and brand manuals to ensure that all marketing materials adhere to the company’s established visual and messaging standards. This includes maintaining uniformity in logos, color schemes, typography, and tone of voice across all platforms. Regularly update these guidelines to accommodate branding evolution and market trends. Ensure that both internal teams and outsourced agencies receive comprehensive training on these standards to minimize inconsistencies and enhance brand recognition.

Managing Deadlines and Expectations - Set realistic deadlines and track progress meticulously. Develop a structured timeline that outlines key deliverables and milestones, ensuring that all stakeholders are aligned on expectations. Utilize project management tools like Asana, Trello, or Monday.com

to monitor progress and hold teams accountable. Establish contingency plans for potential delays and schedule buffer time to accommodate revisions or unexpected challenges. Regular status meetings with agencies help to realign goals and make necessary adjustments.

Ensuring Effective Collaboration - Schedule regular follow-up meetings to foster seamless communication between internal teams and external agencies. Define clear roles and responsibilities to avoid duplication of efforts and miscommunication. Leverage collaboration tools such as Slack, Zoom, or Google Workspace

to maintain transparency and facilitate real-time discussions.

Encourage an open feedback culture where both parties can discuss challenges, brainstorm solutions, and enhance project efficiency. Strengthening interpersonal relationships between teams helps to build long-term trust and operational synergy.

Measuring and Evaluating Performance - Use KPIs to assess agency performance effectively.

Define quantifiable metrics such as conversion rates, engagement levels, lead generation, and return on investment (ROI) to evaluate success. Implement real-time tracking systems and generate performance reports regularly to analyze trends and areas for improvement. Conduct quarterly reviews to reassess objectives and make data-driven adjustments to strategies. Establish clear performance benchmarks to incentivize excellence and foster continuous improvement in outsourced marketing efforts.

Conclusion Outsourcing marketing services offers numerous benefits for companies looking to improve efficiency, flexibility, and impact.

By choosing the right agency and implementing effective collaboration processes, you can maximize the benefits of outsourcing. Use the tools and strategies discussed in this guide to successfully outsource your marketing projects and achieve your business goals.

In summary, outsourcing marketing services allows companies to benefit from specialized expertise, reduce costs, and focus on their core business.

By following best practices and establishing strong partnership relationships with agencies, companies can maximize their return on investment and achieve their marketing goals.

Benefits of Outsourcing Marketing Services ❯ Accelerated Processes & Increased Impact – External experts speed up projects and enhance campaign effectiveness. ❯ Access to Specialized Skills – Agencies provide expertise in SEO, content creation, data analytics, and more. ❯ Flexibility & Adaptability – Companies can adjust marketing efforts without hiring additional employees. ❯ Cost Reduction – Eliminates expenses related to hiring, training, and infrastructure. ❯ Focus on Core Business – Allows internal teams to concentrate on strategic objectives.

How to Choose the Right Marketing Agency ❯ Clarify Expectations & Objectives – Define goals, expected results, and financial models. ❯ Meet Potential Agencies – Assess expertise, working methods, and cultural fit. ❯ Consider Specialization & Versatility – Choose between niche expertise and full-service agencies. ❯ Evaluate Cultural Compatibility – Ensure shared values and work ethics. ❯ Check References & Case Studies – Review past performance and testimonials.

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It’s Time for the Retail Pet Sector to Add More Bite into Their Customer Loyalty Programs

BY RICHARD SCHENKER

A

Retail Pet Sector Overview The pet sector is dominated by a mix of large retailers, including mass discount chains, big-box club retailers, traditional and discount grocery stores, big-box pet stores, chain pet retailers, small niche stores, and, of course, FEBRUARY 2025

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s a former dog owner (our late dog, Koby, pictured on page 19), I can attest firsthand that pets are often seen as the epitome of loyalty, offering unconditional love and companionship without asking for anything in return. Whether it’s a dog waiting at the door after a long day or a cat curling up beside you for warmth, their devotion is unwavering. Pets don’t judge, hold grudges, or demand anything in exchange for their affection. They are always there to provide comfort and joy, creating an emotional bond that remains strong through every challenge. It’s no wonder pets are among the most loyal beings!

So, it bewilders me that in such an emotionally driven retail category, pet retailers’ loyalty programs are almost entirely focused on generating transactional loyalty rather than fostering an emotional connection with their customers. Honestly, I can’t think of many retail sectors better positioned to build emotional bonds with customers than the pet industry.

The retail pet industry in North America has experienced significant growth in recent years, primarily driven by the pandemic. As millions of people were forced to stay home, pets became central to the emotional well-being of many households. Pet ownership transitioned from a casual hobby to an emotional lifeline. With this unprecedented growth in pet ownership, however, comes the realization that pet retailers have an untapped opportunity to leverage loyalty programs in ways that deepen customer connections and increase long-term value.

Yet, despite the explosive growth of the pet sector, loyalty programs in this space still aren’t reaching their full potential.

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online giants. The emergence of online retailers like Amazon and Chewy presents a significant challenge to the traditional retail pet sector.

Amazon has become a one-stop shop for pet owners, offering a wide variety of products, often with subscription services for recurring purchases like pet food. Chewy, specializing in pet supplies, has carved out its niche by focusing on pet-centric customer experiences, such as auto-ship delivery programs and personalized care. These online retailers often offer lower prices, convenience, and a wider range of products than traditional brickand-mortar stores. Pet ownership can be expensive, and during these uncertain economic times, many pet owners place a high value on price and convenience.

Specialty pet retailers are struggling to keep pace with online competitors by adopting omnichannel strategies, such as online ordering with in-store pickup or expanding delivery services. However, they have been slow to innovate their loyalty programs to counteract the online threat. Many loyalty programs at traditional pet retailers lack the same degree of personalization or convenience as their digital counterparts, which may explain why customers are increasingly shifting toward online purchases. ❱ DMN.CA

A Lack of Differentiation in Loyalty Programs Despite the competition, loyalty programs in the traditional pet retail sector have remained largely stagnant. Many are transactional at their core, focusing on earning points or discounts with little attention paid to the broader customer experience or the emotional connections between customers and their pets. While price and convenience are key drivers of loyalty, there are several other factors that pet retailers need to focus on. This is in stark contrast to sectors like fashion, airlines/ hospitality, and tech, where loyalty programs are more dynamic, offering exclusive benefits, perks, features, and mechanics that foster emotional loyalty to the brand.

The lack of innovation in pet loyalty programs is striking. The retail pet sector is missing an opportunity to build not just transactional loyalty but emotional loyalty as well. Pet owners are deeply attached to their pets, and the bond they share can be a profoundly emotional experience.

Yet, pet retailers have largely missed the mark in connecting with customers on an emotional level.

While transactional loyalty — such as offering discounts or reward points for purchases — is essential, emotional loyalty can elevate a brand to the next level.

Retailers have the opportunity

to tap into the emotional aspect of pet ownership by offering personalized services, education, and experiences that go beyond mere product transactions. Pet retailers could build communities for customers, provide resources like training or health tips, and host special events that align with pet ownership values.

Unfortunately, many loyalty programs stop at the discountdriven transactional model, leaving emotional connections untapped.

Innovative Loyalty Program Considerations for Pet Retailers Retailers in the pet sector can innovate in several ways to not only make their loyalty programs stand out but also encourage long-term customer engagement.

However, it is essential for pet retailers to discern which of these features will drive the greatest customer appeal and loyalty outcomes. Most retailers have tight budgets and over capacity digital departments with competing priority projects. Therefore, conducting some level of voiceof-customer research is always useful to gauge appeal, likelihood to increase shopping frequency, and the probability of customers referring the brand to others. This allows for a logical rationalization of new ideas.

The following is a list of possibilities that rely less on

traditional loyalty mechanics and focus more on emotional loyalty features, which can help differentiate retailers from their competitors. While implementing all of these strategies is not recommended, selecting those that will be most strategically and financially accretive to the business is key. Here are some thought starters:

1

Tailored Pet-Centric Loyalty Tiers

Instead of traditional points-for-purchase programs, retailers can design loyalty tiers focused on the unique needs of different pet owners (e.g., puppies vs. seniors).

This segmentation ensures that customers feel the loyalty program is personalized to their pets’ life stages, increasing relevance and engagement.

2

Integrate Technology for Seamless Experiences

Pet retailers should consider investing in apps or online platforms that make loyalty programs easier and more interactive for customers. Features could include tracking a pet’s purchases, needs, and milestones (e.g., food consumed, vet visits, training goals). Incentives could FEBRUARY 2025

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be offered for completing tasks, such as checking off health goals, sharing pet stories, or attending online training sessions. Members could redeem points for both physical products and digital content, such as pet training videos or downloadable care guides.

3

Social Impact and Charity Rewards

Pet owners increasingly want to feel their purchases are making a positive impact. Retailers can create loyalty programs that allow customers to donate loyalty points to animal shelters or rescue organizations. They could also participate in charity events or fundraisers, earning points for donations or volunteer hours. A focus on social responsibility not only drives loyalty but also taps into the emotional side of pet ownership, making customers feel they are contributing to a greater cause.

4

VIP Access to Pet Services

Offering services beyond just products can increase customer loyalty.

Pet retailers could partner with pet groomers, training centers, or dog walkers to offer exclusive discounts or services to loyalty program members. Programs could offer “VIP Member” access for customers who reach higher loyalty tiers, including personalized shopping and services or priority access to new pet products.

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owners, enhancing the retailer’s loyalty program by educating and empowering customers.

Incorporate Pet Milestones into Loyalty Programs

Just like human loyalty programs celebrate anniversaries or birthdays, pet retailers could introduce milestone-based rewards. Rewards could be given when a pet reaches a certain age (e.g., a free grooming session or discounted health products when a pet turns 1, 5, or 10).

Special gifts or discounts could be offered on “Gotcha Days” (adoption anniversaries), birthdays, or holidays to foster a deeper emotional connection with customers.

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Author Richard Schenker’s late dog Koby

6

Virtual Pet Communities

Taking inspiration from Sephora’s highly successful Beauty Insider program, which has a soughtafter community portal, pet retailers can create a similar sense of community among loyalty program members. Pet owners can connect through virtual groups, online forums, or local events organized by the retailer. These virtual pet communities can share care tips, organize meetups, or host fun pet-related challenges (e.g., a cutest pet photo competition).

Members could earn rewards for participation, sharing, and engaging with the retailer’s social media or community platform. A sense of belonging can increase brand loyalty, as customers feel part of something bigger.

7

Exclusive Product Collaborations and Bundles

Retailers can collaborate with suppliers to create exclusive products or bundles that are only available to loyalty program members. For example, specially formulated pet food or limited-edition toys. Bundles of complementary products (e.g., food and grooming kits) could be sold at a discount for loyalty members.

By offering exclusive product lines or bundles, retailers can provide customers with something new, increasing purchase likelihood and brand referral.

8

Sustainability and Ethical Product Rewards

As consumer interest in sustainability grows, suppliers can help pet retailers differentiate their loyalty programs by offering eco-friendly or ethically sourced products as reward options.

Products like biodegradable toys or sustainably sourced pet food could be offered as rewards for loyalty members, with additional points given for purchasing from sustainable or charitable brands.

9

Shared Data Insights and Personalized Experiences

Suppliers with deep insights into their products and customers can collaborate with retailers to offer more personalized, datadriven loyalty programs. By sharing anonymized consumer behavior and product usage data, retailers and suppliers can offer tailored promotions based on pets’ specific needs (e.g., nutritional requirements, health issues). This collaboration can also help understand what products perform best in different regions or for different types of pets, leading to more relevant rewards.

10

Pet Health and Wellness Education

Suppliers specializing in pet care products — such as health supplements, food, or training tools — can provide exclusive educational content as part of loyalty programs.

Suppliers could offer webinars, expert pet care advice, or training courses available only to loyalty members. This positions suppliers as valuable resources for pet

Pet Retailers Must Invest More in Loyalty Programs It is more important than ever for pet retailers to make loyalty a core part of their business strategy. The industry is highly competitive, and with the growing dominance of online players, brick-and-mortar stores need every advantage they can get. Loyalty programs not only drive repeat business but also provide valuable customer insights that can inform product offerings, marketing, and store operations.

Loyalty is a powerful tool for retaining customers, increasing lifetime value, and fostering brand advocacy. As the pet industry continues to grow, investing in loyalty programs that enhance both transactional and emotional connections will be a crucial differentiator. Pet retailers must understand that loyalty is not just about discounts; it’s about building lasting relationships with customers who view their brand as a trusted partner in caring for their pets.

The time has come for the pet retail sector to evolve its approach to loyalty, focusing more on emotional connections and innovative offerings that go beyond the basics. By adding more bite to their loyalty programs, they can create deeper emotional bonds with customers that last a lifetime.

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

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BY CHRIS DAVIES

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oo often, brand loyalty is characterised by what we can see in Google Analytics or similar. It’s all about value, volume, frequency, or product holding.

Whilst these are all important indicators of depth, they naturally lead to databased strategies rooted in propensity or Next-best Action (NBA). Again, these are important but limiting in terms of how we perceive loyalty because it’s so much more.

At its core, brand loyalty is about the power of relationships. It’s a measure of how we feel about a brand and the depth to which that manifests itself in terms of purchasing habits. However, it’s also about things like customer satisfaction and Net Promoter Score (NPS). These measures are proven bellwethers for long-term business and brand health and indicate a second, softer plane we should be evaluating: Passion. How do people feel about a brand, and how emotionally invested are they?

What Love Songs Can Really Teach Us About Brand Loyalty

A new matrix to measure loyalty Just as brand loyalty is one of the purest measures of a business’s long-term health, love songs are one of the purest expressions of the human condition.

They bring to life our experiences and our relationships in all kinds of ways.

This Valentine’s Day, I’d like to introduce you to a new model that uses love songs to help us characterise four different types of brand loyalty. It’s a way of thinking in which a brand’s centre of gravity is informed but not dictated by the category they’re in, and more so influenced by the nature of their products, propositions, customer experience and how they manage their customer relationships.

Lessons in the lyrics This model can help brands summarise their customer relationships and find their centre of gravity. This, in turn, will enable them to take action to boost either the passion or the depth of those customer relationships by focusing on the right areas to drive long-term brand loyalty. So, what are the four different categories — or love songs — that we need to be aware of?

Type 1: It’s Too Late by Carole King.

They can’t hide, and they just can’t fake it. No passion, there’s little left in common. Maybe they just stopped trying? Resigned to a relationship about to end, this is a song about moving on.

The writing’s on the wall, it’s too late baby.

Soon as they can, they’re gone. Cut your losses and make sure you learn from this.

Type 2: Always on My Mind by Elvis Presley.

Here’s a song about regret and missed opportunity. Passion has waned (if it was ever there in the first place), and what remains is a depth of relationship marked by time and familiarity. Maybe you didn’t love them as often as you could have.

Maybe you didn’t treat them quite as well as you should have. They’re still with you, for now. But if another younger, more exciting, better-looking brand comes along – they could be tempted. That said, they might give you one more chance to keep them satisfied, so all is not lost. You need to understand what they want and make more of a concerted effort.

Type 3: Crazy in Love by Beyonce.

Now you’re talking. Your love’s got them looking so crazy right now. You’re early in the relationship; you’re so hot right now: The coolest beer/trainer/phone on the market. There is lots of passion, but it is too early for depth and too early for true loyalty to be tested. Hang on in there; it could go either way. Be cool, but don’t play it cool.

Type 4: You’re Still the One by Shania Twain.

Looks like you made it! A relationship that’s seen it all, still as passionate about each other as ever, and with the depth to back it up. You could be a car marque or a supermarket brand, but now they’re fully wedded to you, and it’ll be hard for others to turn their heads. Whatever you’re doing, it’s working; keep it up — but remember to keep yourself in good shape.

Driving long-term loyalty When it comes to brand loyalty, it’s important to know which relationships are worth focusing on and where that focus needs to be. By categorising these four types of relationships — and four different love songs — a complex landscape becomes infinitely more controllable.

Brands can get a sense of the scale of change that is needed and take action to preserve the important relationships and drive long-term loyalty.

CHRIS DAVIES is Carat’s Head of Strategy.

❱ DMN.CA

FEBRUARY 2025

// 21

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

DATA ANALYTICS

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LOYALTY

The QSR Contest Wars Are Heating Up This Winter in Canada

BY RICHARD SCHENKER

A

couple of weeks ago, Tim Hortons, Canada’s iconic coffee chain, announced the latest iteration of Roll Up to Win, which will run from February 24th to March 23rd. Following the brand’s 60th anniversary, during which they brought back a variety of nostalgic baked goods, Tim Hortons revealed that they would reintroduce the beloved physical cup for revealing prize winnings during part of the contest. This cup has long been a hallmark of the promotion, but the Covid-19 pandemic forced the chain to abandon it and transition to a fully digital format for participation, prize reveals and redemption.

In an effort to rekindle this iconic Tim Hortons experience — likely aimed at re-engaging less digitally savvy older customers and adding fun for younger ones — the brand will run a hybrid contest, featuring both physical cups and digital prize reveals through their app. Time will tell if this decision proves effective from both a customer experience and financial perspective. Personally, I suspect it will add some complexity to the user experience.

Each year, McDonald’s Canada makes a valiant attempt to upstage this iconic Canadian contest tradition by pre-emptively launching its own promotional efforts to distract QSR customers from Tim Hortons and entice them to visit McDonald’s instead.

Some of McDonald’s past counter promotions have included mass mailings of promotional discount coupons, $1 coffee weeks, and even free coffee offers. McDonald’s typically does not run their Monopoly contest head on with Roll Up to Win. This year, McDonald’s has introduced a non-branded contest, loosely referred to as “Want Prize With That?” This digital initiative provides peel-off codes on select menu items. Once customers peel off a code, they can either scan it in the McDonald’s app to see if ❱ DMN.CA

they’ve won or manually enter it.

The contest runs from February 4th to March 3rd, aiming to drive app adoption, usage and increase frequency and spend. According to the contest’s advertising, there are $15,000 weekly cash prizes.

Additional prizes include trips for two with Via Rail, $25 SKIP gift cards, $50 Walmart gift cards, one-year subscriptions to Paramount+, up to 10,000 My McDonald’s Rewards points, and several free menu items.

McDonald’s has also integrated its loyalty program with the contest, so each code scan tracks whether a customer has won and indicates how close they are to earning 2,000 My McDonald’s Rewards points with each peel-off scan. The 2,000 points is awarded after 5 peel-off code scans. This “progressto-reward” mechanism is a proven and effective neuroscience strategy that motivates customers to visit McDonald’s more often to reach a reward worth 2,000 points.

It’s curious that McDonald’s did not formally brand this contest, raising the question of whether this is merely a test concept and could potentially be a one-off promotion if it doesn’t meet its goals.

The contest feels somewhat undifferentiated. In fact, it appears to closely mimic the Roll Up to Win contest, minus the physical cup reveal mechanic. McDonald’s has integrated loyalty points, tied winning to select menu items, and structured the prizes similarly to Roll Up to Win. However, Roll Up to Win offers more varied prizes and major, headline-grabbing big-ticket prizes. These headline prizes are typically the driving force behind consumer interest and action but

are noticeably less abundant in McDonald’s contest.

In terms of participation mechanics, aside from the cup roll portion of Tim Hortons’ contest this year, Roll Up to Win participants simply scan their Tim Hortons app and digitally roll to reveal their prize, providing instant gratification. With McDonald’s, however, the process involves more effort. One must locate the peel-off sticker on a participating menu item (which isn’t always obvious), peel it off, open the app, and scan the very small sticker to see if they’ve won. This requires more work by the customer.

One must wonder why McDonald’s didn’t opt for a completely different contest format. I would have expected them to create a more innovative and differentiated design to truly stand out to customers. Instead, it feels like a derivative contest with a different prize reveal mechanic, falling short of matching Roll Up to Win’s iconic status.

It will be interesting to see whether McDonald’s continues this contest next year, as that would likely indicate the success of their initiative. In the meantime, as the weather in most of Canada remains cold and snowy, Canadians will no doubt be heading either right or left to grab their hot drinks, baked goods, and other menu items from these QSR giants.

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 FEBRUARY 2025

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