4 Ways to Win Customer Loyalty in Retail

Ornella Urso (Senior Research Analyst, IDC Retail Insights in Europe)

In retail, nothing will be as it was before. It’s time for retailers to really make a difference to survive in the new shopping experience era. This requires them to prioritise immediate business initiatives such as a contextual customer experience, engaging customers everywhere and responding to customers’ needs in real time. Among the key actions for retailers, loyalty management remains critical.

Leading global brands are already investing in customer loyalty. For example, Best Buy Canada is updating its in-store POS and loyalty programme to integrate them into its ecommerce offering. The Body Shop’s Open Hiring initiative aims to promote open hiring to attract diverse candidates and increase employee loyalty. Under the slogan “The more active you are, the more you get rewarded,” NikePlus membership offers free services from Nike’s new partners Apple Music, Headspace and ClassPass. Walgreens recently revamped its myWalgreens loyalty programme to include same-day pickup, partnerships with third-party delivery platforms (such as DoorDash and Postmates) and new mobile app services. Lidl’s new loyalty app (Lidl Plus) offers personalised deals to shoppers based on their purchasing history.

It’s not just about rewards. According to IDC’s Global Retail Innovation Survey, 33% of retailers need to identify new loyalty strategies to improve CX personalisation at speed and scale. At the same time, 23% of retailers that consider CX a key enabler of company business model innovation over the next three years plan to evolve existing loyalty programmes as a key area of intervention to drive new revenues and increase KPI scores.

As this new shopping era begins, let’s see what retailers should focus on to improve customer experience through loyalty.

The 4 Strategies to Build Customer Loyalty in Retail

  1. Be Transparent and Fix the Problem

Post-purchase is a crucial moment for customers that have bought a product and passed through all the main steps of the shopping journey but then need support or need to return an item. This is even more evident when customers shop online and experience some friction along their purchasing journey or simply add the wrong item to the cart or receive a damaged parcel.

Retailers can now support the customer not only in store but also online through virtual agents from the mobile app and contact centre AI. The goal is to provide customers with a real-time, clearer and more personalised solution to their problem. This enables retailers to retain the customer and increase overall customer satisfaction while strengthening mutual trust between the brand and the customer in the long term.


  1. Take Advantage of Existing Customers to Generate New Customers

Happy customers generate new customers. Engaging new customers is often perceived as being something different to retaining loyal customers. However, in a world where customer reviews matter, customer satisfaction is vital for new client engagement, especially in the initial stages of the shopping journey.

It’s important therefore for retailers to provide a superior customer experience that meets loyal customers’ needs and expectations, as shared experiences can in turn enable retailers to reach new clients. Satisfied customers can promote a brand or product to their friends and family.

Retailers, for instance, can launch a “bring a friend” initiative as part of their loyalty programme, so members can receive rewards in exchange for inviting friends to join the programme. At the same time, as potential clients can reach the brand through multiple interfaces, retailers should recognise them, collecting and managing customer data through advanced analytics to personalise and offer a coherent marketing and advertising message (special discounts, personalised offerings, etc.).


  1. Aim for Initiatives to Increase Customer Experience

Loyalty needs to go beyond the mere collection of loyalty points and rewards — and should be a combination of initiatives and personalised strategies aimed at increasing customer experience. Through their loyalty programmes, retailers create exclusivity, providing customers with differentiated offerings (exclusive events, one-of-a-kind experiences, birthday gifts, tier celebration gifts, free shipping, seasonal savings, etc.) while becoming part of a community.

As part of its loyalty strategy, US-based beauty retailer Ulta Beauty launched its #SeeBeautifulToday campaign to enhance the sense of community and human connection through communication and CX. By taking part in the campaign, customers can pass on positive messages and transmit shared values to the rest of the community.


  1. Drive Customers to Visit or Use the Store to Collect Orders

Frictionless engagement drives loyalty. In response to the new shopping paradigm, retailers need to rethink the store and store operations to better serve the customer and improve frictionless customer engagement between online and offline experiences.

In 2021, 25% of retailers plan to implement IoT technology to deliver a real-time contextual customer experience in the store. Retailers can improve customer loyalty by leveraging technologies such as AI, IoT and AR/VR in store. By doing so, they can effectively blur the line between online and offline and provide a unified and contextual customer journey. ​


IDC Retail Insights is carrying out dedicated research and original surveys across the extended retail value chain with a focus on customer experience and loyalty. To find out more, see what’s in store within IDC’s Worldwide Retail Customer Experience and Commerce Strategies programme — and don’t forget to join us at the IDC European Retail Executive Digital Summit 2021.


If you want to learn more about this topic or have any questions, please contact Ornella Urso, or head over to https://uk.idc.com and drop your details in the form on the top right.

Sharing Data in Manufacturing Ecosystems — It's All About Trust!

Stefanie Naujoks (Research Director, Manufacturing Insights Europe)

Analysing data to gain insights has turned into a core discipline of manufacturing organisations. No manufacturing CxO would deny this. Data can deliver valuable insights into how to optimise products, increase production throughput, improve customer satisfaction, increase revenues, reduce costs.

According to IDC survey results, for 42% of manufacturing organisations worldwide, capitalising on and monetising data are among the priorities to achieve digital transformation vision and strategy. But, to a large extent the data that is used for analysis is from manufacturers’ own domains and is captured in their own applications.

But how about using data from stakeholders and partners in the ecosystem?

Benefits of Sharing Data in the Manufacturing Ecosystem

By sharing and exchanging data in an ecosystem, manufacturers can realise even greater product quality and customer experiences. They can also enable more efficient supply chain execution and production operations and faster and better product innovation than by analysing data only from their own domain.

This is because manufacturers can feed external data into their own data analytics applications, enriching their own data sets. This enables them to apply data analytics that will deliver even more insights on how to solve problems and eliminate challenges, with even more possibilities to detect correlations or dependencies.

Use Cases Based on Data Sharing in Manufacturing Ecosystems

Use cases range from asset optimisation and enabling predictive maintenance concepts to collaborative quality resolutions; just some examples aimed at improving the efficiency of production operations. However, all these use cases require close collaboration for data sharing between plant operators, machine OEMs, or even operating supplies providers.

Among the most frequently discussed use cases are predictive maintenance concepts. And what we currently see is that plant operators increasingly collaborate with the suppliers of their production machines or even with suppliers of their operating supplies. They see value in exchanging data sets to gain much more meaningful insights than relying on their own data only. Sharing data is seen as a key enabler to achieve competitive advantage.

What Will Drive Data Exchange Among Stakeholders in the Ecosystem?

Drivers of data exchange relate to the organisation and people and technology and processes:

  • The more manufacturing experience organisations gain from successful data analytics projects that deliver measurable ROI, the more they are open to projects involving external data sources.
  • Increasing adoption of technology that enables data sharing, such as cloud and open APIs, will also drive data exchange across ecosystems. Data exchange will also be driven by the availability of artificial intelligence or machine learning capabilities, as applying AI-based algorithms delivers even more insights into correlations and dependencies.
  • An increasing focus on environmental sustainability and traceability, which is all about tracking products along the value chain, will also drive data exchange in ecosystems.

The Challenges of Sharing Data in Ecosystems

Sharing data in ecosystems brings benefits, but also challenges. The more manufacturing organisations will want to scale and extend data exchange within their ecosystem, the more they will need appropriate data management and data sharing IT infrastructures and architectures. But it will be key to consider the individually different requirements related to latency, volume, security, or traceability of date exchange.

But what can actually be considered as major challenges related to data sharing in ecosystems from my point of view are the current lack of common data formats across industries and concerns around IP protection, data ownership, and data privacy. I view trust and establishing a “win-win” situation for all participating stakeholders to be a key pillar of sharing and exchanging data in ecosystems.

What are your experiences around data sharing in your ecosystem of stakeholders? If you would like to have a conversation about this. Please feel free to reach out to Stefanie Naujoks.


If you want to read more:

A detailed report on Data Exchange in Manufacturing Ecosystems: Drivers, Use Cases, Challenges, and Outlook has been published on idc.com.

Furthermore, a recently published IDC PeerScape describes some best practices of how manufacturers from the automotive, aerospace, industrial machinery, and chemicals industries leverage data sharing and data exchange with their ecosystems of partners, suppliers, and customers to solve some of their existing challenges.

iPhone 12 Pro Billboard New York City

The Impact of the Success of the iPhone 12 on European 5G

Simon Baker (Program Director)

A rule of thumb for mobile operators in Europe for 2021: if you want to know where to market 5G services, just follow the sales of the iPhone 12.

Apple sold approaching 56 million iPhone 12s globally in 4Q20, according to the IDC Worldwide Quarterly Mobile Phone Tracker, at a retail value of $58 billion before taxes.

Around one in six of these, or close to 10 million, were sold in Europe.

That total is not much short of all the Android 5G devices sold in Europe to date, including in the fourth quarter.

The iPhone in Europe Has Peaks and Troughs

Apple shares are not distributed evenly around Europe. The U.K., Germany, and France account for close to a half of all iPhone sales in the region.

When you look at the iPhone share of the smartphone market, in addition to the three main Apple countries above, the Netherlands, Belgium, Ireland, Austria, Switzerland, and the four Nordic countries also figure prominently.

The highest Apple share in Europe in the fourth quarter was in Norway, at 61.5%, with several countries above 50%. Its lowest market share in Western Europe, in Greece, was less than a quarter of that in Norway. Richer countries normally did better than poor ones, with some exceptions.

In the peak-Apple markets, the iPhone 12 accounted for more than half the Apple phone mix. Again, in the weaker ones, the iPhone 12 share was normally lower.

So, it is the northern half of Europe where operators should take their iPhone 12 cue and ramp up their 5G marketing.

How do Sales Translate into User Base?

Is there another rule of thumb here on 5G for mobile operators, on how quickly the impact of the iPhone 12 will build up the 5G smartphone installed base?

Installed base calculations need to be pretty complex, but working them out starts off quite easily for the first quarter of the iPhone 12.

Let us take the Netherlands, a country where Apple is very popular, and with a population of 17 million and an installed base of around 15 million smartphones. The smartphone market amounted to 1.4 million in the fourth quarter, of which Apple took half, and of these iPhones, approaching 400,000 were the new 12 models.

Like most countries in Western Europe, smartphone lifespan in the Netherlands is around two and a half years. So, in 4Q the arrival of the iPhone 12 equated to about 2.7% of the smartphone installed base.

Diminishing Returns

That number sounds underwhelming against Apple’s shipment share, and, moreover, there will be diminishing returns against sales thereafter.

First, sales of the new iPhone are at their peak in the launch quarter, with this proportion around 40% in Holland. So at the end of its first year, the iPhone 12 will account for a bit less than 7% of the local installed base there.

Lots of iPhone 12 owners will move on to the new model come autumn next year. Many of their iPhone 12s which are traded in to mobile operators will end up being exported to other markets after being refurbished, so we can’t count on them all going two and a half years in the local market.

On the other hand, we can assume with some certainty that next year’s iPhone range will again be all 5G.

Last year’s iPhone 11 continues to sell well In the Netherlands and made up 30% of the Apple market share in the fourth quarter. So in the last three months of 2021, with the launch of the next iPhone, we can expect that around four out of five iPhones sold there will be 5G.

Thereafter, the growth in the iPhone 5G installed base may tail off, with a lot depending on how long Apple keeps older 4G models in production and whether it launches a new budget SE model, and if it comes, it is 5G.

It is clear that the transition from one generation of technology to another is not a sprint, it is a marathon.

For Android — A Price Point Rule of Thumb

But that’s leaving out the impact of Android of course. Android 5G volumes were much lower in Europe in 4Q than those of Apple, but the Android market started earlier, and the cumulative total tends to be similar in countries where the iPhone is strong.

Are there any rules of thumb there with Android?

IDC is expecting Android 5G phones to outsell iPhone 5G models well this year, by as much as four to one.

In the fourth quarter there were few 5G Android models on sale in Europe at prices below $300 retail before tax. Nearly three-quarters of Android sales in Europe are at prices below this threshold.

If there is another rule of thumb for operators on the take-up of 5G on Android — it is watching how quickly the price of Android 5G phones comes down below this price barrier — the entry point to the mass market.


IDC will include country by country five-year forecasts of the installed base of 5G smartphones in all countries in its Worldwide Semiannual Telecom Services Tracker from the next issue, available in early summer.


If you want to learn more about this topic or have any questions, please contact Simon Baker, or head over to https://uk.idc.com and drop your details in the form on the top right.

SAP RISE Smooths the Path to S/4HANA, but Customers Will Still Question Making the Migration Journey

Tom Seal (Senior Program Director, European Services)

Concerns around migration to S/4HANA include the complexity of the project and competing business priorities. Questions about the value of S/4HANA relate to the incremental value customers see in it over their current ERP, which in many cases they are satisfied with and which has a predicable cost.

Overall, customer’s concerns lean more towards the migration journey than the long-term value of S/4HANA as a future ERP platform.

IDC research conducted in March 2020 showed that only 48% of SAP customers were considering migrating to S/4 HANA. Reasons for not considering the move are related to both the cost and risks of the migration journey and uncertainty regarding the value they would ultimately derive from S/4HANA.

SAP S/4HANA Introduces RISE to Help with Migration

On the January 27, 2021, SAP announced RISE, a service to help its customers get S/4HANA in the cloud. RISE is described by SAP as providing business-transformation-as-a-service.

The service brings together all the elements required to move from any version of SAP or non-SAP environments to S/4HANA and makes it available for a recurring fee without upfront license or hardware costs.

The recurring fee can grow according to number of users and other parameters, and the duration will vary according to the complexity of the transition and the pace at which they want to execute it. The elements brought together under the RISE banner include migration tools, cloud services, and subscriptions to help customers on their transformation journey.

The scope of the service spans an array of tools that help customers assess their current system, scope their future ERP, and undertake the technical migration from old to new. The promise is that this service will be applicable to all organisations, regardless of their starting point, providing a single toolset to customers with wide ranging needs.

In terms of the tools that will help customers assess their current platform and processes and plan their migration, two key tools are highlighted:

  • SAP Business Process Intelligence Discovery Reports: This tool will help organisations assess the ways in which the current ERP is used in practice.
  • Custom Code Analyser, Readiness Check, Learning Hub: A set of analysis tools to assess the level of customisation and how much can and should be carried forward into the organisation’s future ERP.

SAP CEO Christian Klein mentioned standardisation several times when explaining the role of RISE, and these assessment tools in particular. SAP is hoping that these tools will help customers undertake a stock take of their business processes and then reduce their reliance on customisations — smoothing the road to S/4HANA.

Using Signavio as an Optimisation Tool

SAP’s acquisition of Signavio, announced alongside RISE, is also relevant here. Signavio offers a suite of process optimisation tools, including tools specifically aimed at supporting SAP migrations. The Signavio tools are very much orientated towards the reengineering of processes to better capitalise on intelligence and automation.

These tools and the Signavio acquisition could play an important role in convincing customers that there is business value in moving to a new set of processes supported by more modern technology. Demonstrating this crucial point hasn’t been easy for SAP so far, but Signavio could make a difference here.

The Benefits of S/4HANA RISE

RISE also encompasses all of the SAP components required to construct the customer’s future ERP, such as S/4HANA itself in its various editions, SAP Business Technology Platform, and a Business Networks starter package. None of these components are new, but the way they are to be sold is.

The licensing costs are wrapped into the RISE fee, and the promise is that, overall, the cost of transformation will be lower, and upfront costs in particular will be reduced.

RISE sounds compelling in its ability to help clients with their S/4HANA journey. This includes assessing their readiness to make the move to S/4HANA, undertaking the migration, and driving standardisation along the way. There are still many customers that will have questions about the destination — i.e., the business case.

Even if RISE gives a better understanding of the costs and risks of the journey, many customers can’t yet put a figure on the business benefits that S/4HANA will unlock. This remains the biggest unknown, and SAP’s most important challenge when it comes to S/4HANA in IDC’s opinion.

So, having eased the journey to S/4HANA with RISE, SAP must now also accelerate efforts to help customers build a business case of their future ERP platform. SAP will play a key role in working with current S/4HANA customers to quantify the value of digital transformation to make current S/4HANA resisters take the leap.


If you want to learn more about this topic or have any questions, please contact Tom Seal, or head over to https://uk.idc.com and drop your details in the form on the top right.