Skills – 4

Name of Student: Radhika Hossale

PRN: 2000201042
School/ Programme – BBA Retail Management (SEM – 4)
Subject Name and Code: Retail Information Systems (RETL403)

Title – Do the analysis of loyalty program of any retailer

Skill/Competencies to be acquired – Understanding the practical aspects of loyalty programs

designed and developed by retailers

Duration – 3 Hours

1. What is the Purpose of this Activity?

Answer – Learning the applications of various aspects of loyalty programs to create a

desirable shopping experience for the shoppers and enhance the customer loyalty

2. Steps Performed in the activity –

STEP 1: Loyalty programs and the role of CRM

STEP 2: Expectations of shoppers from the retailers in terms of shopping experience and
benefits for loyalty

STEP 3: Procedures and practices followed by retailers to offer desired benefits through
loyalty programs

3. What Resources /Material/Equipment’s/tools did you use for this activity?

Answer – Live examples, interviews of industry veterans, and articles/blogs published in

various media etc.
4. What Skills did you acquire?

Answer – Application of various aspects of loyalty programs and generation of granular

customer profile data – enabling hyper-segmented and personalized marketing campaigns.
SKILL NO 4 Do the analysis of loyalty program of any

retailer.

‘STARBUCKS’ LOYALTY PROGRAM ANALYSIS:

INTRODUCTION TO STARBUCKS LOYALTY PROGRAM:

• Starbucks uses its loyalty program to align customers to larger

business goals and objectives, such as downloading the Starbucks
app to use their “order and pay” system, signing up for their
Starbucks Rewards Visa card or trying new products and services.

• Starbucks Rewards program awards customers with “stars.” With

each purchase, they earn stars and receive more if they follow
individualized multi-step offers from buying specific items or other
parameters during a time period. As they earn stars, customers win
free coffee and products, in addition to celebrating their birthday
with a treat, bonus rewards like double star days and access to
exclusive games and personalized offers.

• By leveraging Formation’s Offer Optimization Platform, Starbucks

increased marketing operations execution speed by 10X, increased
revenue lift per offer by 3X and sent out 15 million 1:1 offers per
week.

• As of October 2020, the Starbucks Rewards program has over

19.3 million members and generates nearly 50% of their
revenue.
SOME OF THE REASONS FOR STARBUCKS LOYALTY
PROGRAM SUCCESS:

1. Created individualized offers at enterprise scale: Starbucks created

millions of offers each week across multiple offer types. Each type of offer
was constructed with dynamic actions and rewards to improve certain
customer behaviours including frequency, category exploration, cross-sell
and upsell.

2. Continuous learning and optimization over time: Machine learning was

applied to Starbucks’s customers’ data and their customers’ interaction
patterns (or lack thereof) to optimize offer individualization and offer
selection.

3. Synchronize cross-channel experiences: Starbucks’ loyalty program

deployed individualized offers across channels including email, mobile app
and push notifications.

4. Improve customer experience: My Starbucks® Rewards program

customers could see their progress in real-time, with their unique offers
and status reflected in the mobile app.

5. Dramatically increase execution speed and reduce manual work:

 Starbucks automated many facets of the offer process using the
Formation platform, including development and measurement. This led
to dramatically faster operations and improved operational efficiency.

6. Conduct advanced experiments: The rewards program

safely, incrementally and reliably tested initiatives in the
market using Formation's rapid experimentation capability.

7. Measure impact: Starbucks tracked and measured results with

Formation’s platform to provide detailed attribution reporting against
key performance indicators (KPIs).

STARBUCKS CREATES VALUE BY:

• Ease of payment in store through mobile app.

• Ability to order and pay ahead of arriving in store (and therefore skip
any Monday morning rush lines by having a separate ‘mobile order
pickup’ station – which in itself serves as a highly effective marketing
tool for the app).

• Rewards and benefits: such as free refills on brewed coffee and free
drinks on member’s birthdays, relatively quickly earned other
rewards from purchases, such as free food/drinks/merchandise.

• Special member events.

• Ability to send other members and friends gift cards through the app.

• App integration with other platforms such as Spotify to discovery

music playing in store (a big part of Starbucks and more generally
coffeehouse culture).

• Members are first to know about upcoming seasonal and

new product releases.