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Starbucks, Sephora bet on mobile to drive new customer loyalty

Starbucks, Sephora and Walgreens are putting mobile and digital at the forefront of their post-holiday campaigns to help drive loyalty with new customers acquired during the holiday shopping season.

All three retailers have strong loyalty programs with mobile as a focal role, and the medium is clearly playing a role in how these brands are kickstarting their 2014 marketing initiatives. For example, Starbucks is advertising on Spotify as part of a post-holiday campaign to acquire loyalty members.

“Starbucks has a great reputation for being an innovator with mobile purchasing and loyalty,” said Dave Martin, senior vice president of media at Ignited, El Segundo, CA.

“When customers see the ads encouraging them to convert their gift cards into virtual payment systems, it’s a pretty appealing proposition, especially to customers who drink coffee at least a few times a week,” he said. “And once they’re hooked in the Starbucks app, the upsell is a lot easier than getting them to purchase another clunky piece of plastic.”

A jolt of mobile
Mobile plays a core part of Starbucks’ My Starbucks Rewards program, and with the logical spike in gift card sales over the past couple of months, the brand is capitalizing on the time of year to acquire and retain loyalty members.

Starbucks is running a new, post-holiday campaign within Spotify’s iPhone application to promote the My Starbucks Rewards program.

Audio and creative for the ads encourage consumers to register their gift cards from the holidays and sign up for My Starbucks Rewards.

When consumers click on the ad, they are directed to the page on Starbucks’ mobile site that outlines My Starbucks Rewards. Via the site, consumers can learn about the program and register their cards.

Consumers can then instantly start redeeming rewards and offers by entering the information from the gift card straight to the brand’s iPhone, iPad or Android app.

The mobile campaign extends post-holiday marketing that Starbucks is also running in-store.

Loyalty has always been a top goal for retailers, but Starbucks’ campaign highlights the increasing move towards digital and mobile as a primary advertising tactic.

“The days of direct mail loyalty cards are over,” said Catherine Tabor, CEO of Sparkfly, Atlanta. “While digital advertising efforts traditionally focused on brand awareness, campaigns are now more narrowed in on attracting and retaining repeat customers.

“We’re also seeing retailers run campaigns with brands that have the primary focus of getting a consumer into the store, and once they are inside, the retailer can make a push to sign them up for a loyalty program.”

Kick starting 2014
Sephora is also stepping up its post-holiday mobile and Web campaign with incentivizes to promote its Beauty Insider loyalty program.

Beauty Insider members can receive 12 free samples with a $25 or greater online order. The gift includes 12 top-selling moisturizers and a travel-sized bag.

To redeem the gift, loyalty members enter a code at checkout on Sephora’s Web and mobile properties.

Given the role that mobile plays overall in Sephora’s loyalty program, it is no surprise that the beauty retailer is running the limited-time offer at the beginning of the year to drive sign-ups of the Beauty Insider program.

These cross-channel campaigns will grow in importance through 2014.

“At the end of the day, the consumer loyalty program should live in the cloud with the smartphone device being the main companion and access point,” said David Hewitt, global mobile lead at SapientNitro, New York.

“Loyalty programs have so much more potential when the retailer knows who their best customer is, what they are doing, where they are at and what they are likely to buy,” he said.

“To date, most loyalty programs have only stood for customers getting ‘credit’ for purchasing an item at the register as supposed to being incented on trying something new or getting passed an offer based on past purchase history.”

Fueling up for 2014
Walgreens is another example of a retailer that is leveraging digital as part of a multichannel marketing mix in building post-holiday loyalty into 2014.

The pharmacy chain is promoting its “7 Resolutions for Real Life” campaign via Facebook and in-store.

The campaign encourages consumers to start off on the right track for the year with seven health-related products.

These types of programs can be appealing ways for marketers to take advantage of the fact that consumers are spending gift cards after the holiday season.

Coupled with loyalty programs, marketers should set up initiatives to propel long-lasting loyalty programs.

“If anything, there is for sure a great opportunity for marketers to build programs and offers to loyalty members to use their points as a post-Christmas debt recovery currency to pay for day-to-day items and treats like phones, trips and other purchases,” said Richard Lane, marketing strategist at Maritz Loyalty Marketing, Mississauga, Ontario, Canada.

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York