A framework for loyalty management in a dynamic and diverse Asian marketplace
The Asian food and grocery consumer is fast evolving and more diverse than any other region in the world.
This diversity and pace of change is a ‘moving target’ for retailers; creating an imperative to stay ahead or at least keep pace with their target customers.
This complex situation gives rise to the question – How can Asian food and grocery retailers keep pace and improve relevance with their most valuable customers?
The answer – By shifting the role of loyalty management from a marketing and promotions tool to the main way a retailer adapts its retail offer to its most valuable customers.
Retailers must do three things in order to evolve their loyalty management function from a marketing and promotion tool into a mechanism to refine and adapt their retail offer:
- Build a broad cross-functional understanding that loyalty management is the tool to adapt the retail offer by continually engaging, evaluating and adapting the offer to the target customers
- Tailor and enhance your loyalty management function by focusing on the most relevant capabilities to your retail operation
- Plan your implementation strategy through a series of small steps, moving from your own starting point towards your desired end-state prioritising for early momentum and greatest return
Research background
This study began life as a series of round-table conversations between a group of Asian food and grocery executives known as the Coca-Cola Retailing Research Council of Asia (CCRRCA). They were keen to explore how their peers across the region are tackling customer loyalty. These discussions gave rise to an initial research brief: How can retailers create greater customer loyalty by identifying and caring for their top 20% of customers. In response to this brief, KPMG was engaged to conduct a study of the region.
Over fifty in-depth one-on-one interviews were conducted covering:
- Three retail formats: hypermarket, supermarket and convenience.
- 13 countries including: Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Vietnam
- 27 food and grocery organisations and their executives including:
- 20 Presidents, CEOs and Managing Directors
- 16 Marketing Directors/Customer Strategy Executives
- 6 Retail Operations Managers
- 10 Store Managers
The result has been this report, Making the connection: rethinking the role of loyalty management, a framework for loyalty in a dynamic and diverse Asian marketplace. This paper outlines the evolution of loyalty practices across the region, including the market conditions retailers are working in and the various manifestations of loyalty programs. We have framed our findings in a maturity model for loyalty management. Aimed at helping you, as a retailer, understand your current capabilities and the actions you can take to improve the effectiveness of loyalty management within your organisation.