Omnichannel Loyalty 101: Definition, Benefits, Trends, and Examples

Omnichannel loyalty does more than encourage customers to purchase from your store. What other benefits do omnichannel loyalty programs bring?

Now more than ever, ensuring customer loyalty is a challenge. However, with the use of omnichannel loyalty, retailers can increase customer retention by creating a high-quality shopping experience. 

Creating meaningful touchpoints at as many steps in the customer shopping experience as possible is critical in executing a sound omnichannel experience. According to McKinsey, consumers are increasingly choosing retailers based on “ease and richness of end-to-end experiences.” 

In part due to the long list of consumer behavior changes the pandemic brought with it, retailers are doubling down on creating the best omnichannel experience possible. Below, we walk through the what of omnichannel loyalty, as well as its benefits, examples, and how you can go about setting up your own strategy. 

What is omnichannel loyalty?

Omnichannel loyalty uses technology to provide a customer experience that delivers relevant offers at the right time. It’s a way for brands to interact and engage with customers regardless of when and how they shop. 

Targeted real-time campaigns across channels make it possible to integrate all customer engagements and purchases into one streamlined brand experience. As a strategy, building loyalty through an omnichannel strategy can include both online and offline touchpoints. 

Traditional vs. omnichannel loyalty programs

There are notable differences between traditional and omnichannel loyalty programs. 

Traditional loyalty programs

With a traditional loyalty program, customers are rewarded for purchases they make in a brick-and-mortar setting. Its main focus is selling through one sales channel and rewards users with a points system that, once accumulated, may be redeemed for discounts or special offers. Some retailers go as far as offering tiered or VIP programs that customers can access for special rewards in the form of deals or discounts. 

For example, Designer Shoe Warehouse (DSW) runs a traditional loyalty program that rewards customers with points for each purchase and includes reward tiers that buyers can use to make more purchases. 

However, with traditional loyalty programs, retailers can’t do much more to expand their customer loyalty strategy. Traditional channels aren’t convenient anymore. As the retail market has become more competitive, loyalty programs have been challenged to step up their customer retention strategy.

Omnichannel loyalty program

An omnichannel loyalty program focuses more on customer engagement instead of simply creating point systems that encourage customers to buy more. 

Omnichannel programs are more interactive. They can gamify the customer rewards experience in a way that encourages buyers to interact with the brand even if they aren’t showing purchase intent. 

For example, customers can earn points by fulfilling specific tasks—taking surveys or rating products are all fair game here. Thanks to the ability to collect customer data across sales channels, retailers are able to deliver a personalized experience with more touch points through mobile apps or in-store purchases. 

The discounts or special deals customers have earned through different sales channels can be applied once they do make a purchase. With an omnichannel loyalty strategy, members can engage with brands or make a purchase at any time from anywhere while their reward status is consistently tracked throughout all their devices.

A great example of an omnichannel experience is Sephora’s Beauty Insider rewards program. Loyal customers earn rewards by accumulating points based on a traditional point system. The best part? Members have a say on how they use their reward points. Points are redeemable for gift cards, special discounts, or even in-store beauty tutorials.

Omnichannel loyalty programs are more convenient. This is because they focus on developing relationships with customers and making them feel valued.

What’s more, customers who have an emotional connection with a brand have a three times higher lifetime value than those who don’t. That’s probably why customers spend more with omnichannel retailers than with traditional ones. Plus, it’s critical to note that customers’ needs are always evolving. With an omnichannel presence, retailers have a better chance of adapting quickly and capturing more market share. 

Benefits of omnichannel loyalty

Let’s look at some of the benefits of omnichannel loyalty.

Better match customer experience

An omnichannel loyalty program isn’t only about handing out rewards in hopes of increasing sales. It’s first and foremost about providing a great experience that closely matches the wants and needs of a customer. 

To do so, retailers can use customer data for key indicators that provide each customer with personalized content based on their preferences. 

Capture more relevant customer data

Omnichannel loyalty programs give an overall look at customer activity. They analyze customer data like:

• Customer purchasing habits
• Buying frequency
• Preferred shopping channels
• Point usage rates
• Demographics
• Attitudes and behaviors
• Location

Starbucks’ reward program, known as My Starbucks Rewards, collects buying habits and shopping preferences of its customers to provide them with more relevant perks. It collects information through customer transactions, seasonal favorites, go-to drinks, and frequently visited locations. 

💡 PRO TIP: Sending digital receipts via email is a great way to organically collect customer contact information at checkout and build an email list to fuel your retention marketing. Just make sure they’ve opted in to hearing from you before sending them anything.

Competitive advantage

Executing an omnichannel customer buying experience comes with plenty of upsides. With it, retailers can stay top of mind. But it doesn’t stop there. An omnichannel loyalty program also offers greater purchasing flexibility—which customers are demanding now more than ever. 

The added touch points offer more retail analytics for store owners to work with—which they can then leverage to create better connections with both new and repeat customers. Add to that an integrated experience across locations and devices, and retailers stand a better chance of capturing and retaining customer attention. 

How to set up an omnichannel loyalty program

• Build omnichannel integrations
• Integrate social media
• Store and track customer data
• Leverage third-party software

Today, retailers can set up an omnichannel loyalty program with solutions like in-store events, social media channels, apps, or websites. Here’s a rundown of some of the key steps involved in the omnichannel process to ensure better outcomes. 

Build omnichannel integrations

Using Shopify POS integrations is one way to create a seamless, omnichannel loyalty experience. It integrates directly with your existing business systems, enabling retailers to connect with their loyalty programs for a smooth setup experience. 

Using an integrated POS system that offers a frictionless experience ensures that you can execute omnichannel strategies like: 

• Setup customer emails that include their in-store favorites, right from the POS system
• Make it easy to bring online customers in-store and upsell at pickup
• Easily accept in-store returns and exchanges, whether an item was purchased online or at other locations.

📌 GET STARTED: Choose from hundreds of loyalty apps in the Shopify App Store and start rewarding shoppers for purchases they make both online and in-store.

Integrate social media

Integrating your social media platforms enables retailers to get more engagement, leads, and future customers. Social media is great for capturing customer emails, for example. With it, retailers can grow their email newsletters, entice customers to join special rewards programs, or run special sales promotions that enable additional brand touchpoints that eventually lead to a purchase. 

As you create your omnichannel strategy, consider leveraging social media as a key part of your customer pipeline. Chances are, many would-be customers are already hanging out on every social platform. 

Store and track customer data

After gathering customer data from various channels, study it and use it to make personalized offers. With the right omnichannel strategy, retailers can use customer data on the basis of:

• Customer interests
• Their pain points
• Customer preferences 
• Frequency of brand touchpoints

Gather the collected data in one shared database—like a customer relationship management system. Later, you’ll have an easier time integrating your collected data with other platforms to provide a cross-channel experience. 

Leverage third-party software

Use third-party software such as Smile.io to help create an omnichannel strategy for your brand. It will help to collect, track, manage and use customer data more effectively. 

Examples of omnichannel loyalty programs

To help you inform your own strategy, let's look at a few real-world examples of omnichannel loyalty programs.

Target

One of the most exemplary stores using omnichannel experiences to increase customer loyalty is retail giant Target. Its current list of omnichannel loyalty programs includes: 

• Target Circle rewards program: Every time you shop with your Target Circle account, Target rewards you with special perks, offers, and plenty of deals. You earn 1% to redeem on future purchases when you shop at Target. Customers also get 5% off any purchase on their birthday. 
• Target app: Shoppers that take advantage of the Target app get exclusive access to year-round deals, RedCard rewards, and in-app shopping list features they can use to quickly make a purchase for free contactless pickup. Once customers are on the Target app, they’re always filled in on deals, the latest sales, and special promotions. 
• Target BOPIS (buy online, pickup in-store): Through the Target app, users can take advantage of Target’s buy online, pickup in-store feature. As a bonus, customers can use their Circle Rewards while they shop and checkout within the app. 
• Target RedCard: Target offers its own credit card with a $40-off deal for customers that qualify for it. Once activated, customers have access to perks like two-day shipping, an additional 30 days for returns and exchanges, and even 2% savings on dining and gas purchases. 
• Target email: Customers can sign up for weekly Target emails that fill them in on exclusive deals, additional Circle Rewards, and curated gift ideas. 

As an omnichannel strategy, Target has gone full force in offering customers plenty of flexibility, discounts and special offers, and personalization. 

Ultamate Rewards by Ulta

Ultamate Rewards program by Ulta is a great example of a tier-based program to encourage customers to consistently engage with the brand. Ulta offers three tiers based on how much customers spend annually. All its customers start with the free basic member tier. 

Those who spend at least $500 move to the platinum tier, and buyers who spend more than $1,200 move to the diamond tier. As customers graduate to the next tier, they get to unlock exclusive rewards and offers. The Ulta mobile app provides its users with personalized content, and members can track their points and manage their offers in one place. 

XPLR Pass (The North Face)

XPLR Pass by The North Face is another great example of an omnichannel loyalty program. The brand encourages its customers to earn points through actions like: 

• Exploring national parks and monuments
• Referring their friends to join the rewards program
• Bringing their own bag while shopping in-store 

The mobile app lets members check in at national parks to collect points. Members of the XPLR Pass program get access to members-only sales and limited edition products. 

Build your retail omnichannel loyalty program

Creating your own retail omnichannel loyalty program opens up a lot of opportunities for retailers to increase loyalty, grow brand awareness, and boost sales. By creating a customer-centered omnichannel strategy that integrates all shopping channels and embraces data collection technology, retailers can stay competitive and grow their market share.

Omnichannel Loyalty FAQ

What is the omnichannel concept?

Omnichannel is a multichannel approach to marketing, selling, and serving customers in a seamless way across multiple channels, such as physical stores, websites, mobile apps, direct mail, call centers, and social media. It is designed to give customers a consistent and unified experience no matter how they choose to engage with a brand.

How can an omnichannel experience strategy improve customer loyalty?

An omnichannel experience strategy can improve customer loyalty by providing customers with a consistent and unified experience across all channels. This allows customers to have a seamless experience when interacting with a brand, no matter which platform they are on. Customers will have a better understanding of the brand, feel more connected to it, and be more likely to stay loyal. Additionally, an omnichannel experience will make it easier for customers to access information, services, and products, and provide them with more options to interact with the brand.

What is an example of omnichannel?

An example of an omnichannel experience is a customer who purchases a product online and then returns it to a physical store location, or a customer who begins shopping online but asks a customer service representative for assistance with completing their purchase. In both cases, the customer has access to multiple channels and can switch between them as needed.