Can gamification help breach the retail digital divide, building customer loyalty and engagement?

Guest columnist Nithinan Boonyawattanapisut shares her perspectives…

Now is not an easy time to be a brick-and-mortar retailer. In an increasingly cut-throat environment, with operators facing intensifying competition and softening consumer sentiments, physical store networks are shrinking in many developed markets, and retail sales are stagnating or even falling – in Singapore and Hong Kong this year, for example.

The decline of physical retail has been lamented by many as a direct result of e-commerce’s rise, with the growth of online retail behemoths such as Amazon and Taobao ascending in a digital age.

While it might be easy to blame digital’s growth for the decline in brick-and-mortar retailing, the truth is different. Indeed, with surveys showing an overwhelming majority of shoppers prefer an in-store shopping experience, it is clear that physical stores are here to stay. Enticed by the halo effect of the brick-and-mortar store, things have taken a surprise turn as e-commerce makes its way into the windows and shopfronts of physical stores.

US online home-furnishings retailer Wayfair is the latest to join the ranks of digital natives opening physical outlets, while in Asia, and previously online-only retailers, such as Love Bonito and Naiise, have also started setting up shops to add to their retail repertoire.

With consumers reaping the rewards from both in-store and online, the differences between physical and digital appear to blur in an omnichannel future. Rather than insisting on drawing up boundaries that may soon cease to exist in a blended retail environment, traditional merchants and retailers will have to deliver value that resonates with the consumer. The conventional wisdom of “Customer is King” still rings true, and while businesses have outgrown the mentality of the-customer-is-always-right, anchoring the consumer-brand relationship around the shopper is a step in the right direction.

Amid ongoing efforts to capture the loyalty of today’s fickle consumers, gamification – the idea of using game mechanisms to drive engagement and action – appears to hold the script for success.  

Gamification can take the form of quizzes, online or offline challenges, and competitions, elements designed to hold the attention of the consumer and banking on the psychological trigger of wanting to win. In turn, retailers offer up rewards in the form of points, discounts, promotions, or even just bragging rights of advancing on the progress bar, with the aim to enhance consumer’s brand loyalty.

The first rule of retail

Retail gamification operates on the simple premise that the consumer takes centre stage in the relationship between business and customer. A recent KPMG report concluded that customer experience remains more important than ever, as companies seek to use any advantage to differentiate themselves in a market that has become very crowded, very quickly.

Consequently, it is not so much the demise of retail but rather the death of boring practices that retailers need to face, as consumers yearn for a unique shopping experience beyond just point-of-purchase transactions at a checkout counter. In short: customers will shop where they enjoy their experience, irrespective of the channels offered by retailers.

In the desire to curate a compelling retail experience, even luxury brands are experimenting with gamification. Hermes, for example, has returned to its equestrian roots, introducing a mobile app, “H-pitchhh”, a virtual rendition of the classic horseshoe toss game. A nod to Hermes’ beginnings as a harness maker, this enabled an interactive narrative of the storied French fashion house.

Guided by the principles of fun and play, gamification has also cast its spell beyond physical retailers. E-commerce company Lazada has introduced Slash It, a game mechanism that leverages on the power of social networks to obtain discounts on purchases, enabling wider consumer reach and a stickier customer relationship.

Deployment of gamification can also be found on mobile applications, as in our gamified retail platform, HotNow.

The use of gamification in increasingly innovative methods, stands to not only meet but exceed expectations for both retailers and consumers alike.

Different, but not less

Digital reinvention has become part and parcel of life, woven into the fabric of the business landscape. While e-commerce cannot be isolated from traditional shopping formats, retailers should be addressing the need to deliver a persuasive shopper experience instead debating the merits of clicks versus bricks.

Retailers who are keen to capture this seismic shift are tuning in to conversations happening outside of traditional shopping paradigms.

Gamification is unique in its ability to foster a participatory culture, building customer engagement and brand loyalty in the long run.

Rebuilding the customer relationship requires retailers to be flexible about taking risks, and to adopt a different set of performance metrics as they add novel experiences to traditional retail models.

Gamification is set to incubate a different retail landscape in the years ahead.

Now is not an easy time to be a brick-and-mortar retailer. In an increasingly cut-throat environment, with operators facing intensifying competition and softening consumer sentiments, physical store networks are shrinking in many developed markets, and retail sales are stagnating or even falling – in Singapore and Hong Kong this year, for example.

The decline of physical retail has been lamented by many as a direct result of e-commerce’s rise, with the growth of online retail behemoths such as Amazon and Taobao ascending in a digital age.

While it might be easy to blame digital’s growth for the decline in brick-and-mortar retailing, the truth is different. Indeed, with surveys showing an overwhelming majority of shoppers prefer an in-store shopping experience, it is clear that physical stores are here to stay. Enticed by the halo effect of the brick-and-mortar store, things have taken a surprise turn as e-commerce makes its way into the windows and shopfronts of physical stores.

US online home-furnishings retailer Wayfair is the latest to join the ranks of digital natives opening physical outlets, while in Asia, and previously online-only retailers, such as Love Bonito and Naiise, have also started setting up shops to add to their retail repertoire.

With consumers reaping the rewards from both in-store and online, the differences between physical and digital appear to blur in an omnichannel future. Rather than insisting on drawing up boundaries that may soon cease to exist in a blended retail environment, traditional merchants and retailers will have to deliver value that resonates with the consumer. The conventional wisdom of “Customer is King” still rings true, and while businesses have outgrown the mentality of the-customer-is-always-right, anchoring the consumer-brand relationship around the shopper is a step in the right direction.

Amid ongoing efforts to capture the loyalty of today’s fickle consumers, gamification – the idea of using game mechanisms to drive engagement and action – appears to hold the script for success.  

Gamification can take the form of quizzes, online or offline challenges, and competitions, elements designed to hold the attention of the consumer and banking on the psychological trigger of wanting to win. In turn, retailers offer up rewards in the form of points, discounts, promotions, or even just bragging rights of advancing on the progress bar, with the aim to enhance consumer’s brand loyalty.

The first rule of retail

Retail gamification operates on the simple premise that the consumer takes centre stage in the relationship between business and customer. A recent KPMG report concluded that customer experience remains more important than ever, as companies seek to use any advantage to differentiate themselves in a market that has become very crowded, very quickly.

Consequently, it is not so much the demise of retail but rather the death of boring practices that retailers need to face, as consumers yearn for a unique shopping experience beyond just point-of-purchase transactions at a checkout counter. In short: customers will shop where they enjoy their experience, irrespective of the channels offered by retailers.

In the desire to curate a compelling retail experience, even luxury brands are experimenting with gamification. Hermes, for example, has returned to its equestrian roots, introducing a mobile app, “H-pitchhh”, a virtual rendition of the classic horseshoe toss game. A nod to Hermes’ beginnings as a harness maker, this enabled an interactive narrative of the storied French fashion house.

Guided by the principles of fun and play, gamification has also cast its spell beyond physical retailers. E-commerce company Lazada has introduced Slash It, a game mechanism that leverages on the power of social networks to obtain discounts on purchases, enabling wider consumer reach and a stickier customer relationship.

Deployment of gamification can also be found on mobile applications, as in our gamified retail platform, HotNow.

The use of gamification in increasingly innovative methods, stands to not only meet but exceed expectations for both retailers and consumers alike.

Different, but not less

Digital reinvention has become part and parcel of life, woven into the fabric of the business landscape. While e-commerce cannot be isolated from traditional shopping formats, retailers should be addressing the need to deliver a persuasive shopper experience instead debating the merits of clicks versus bricks.

Retailers who are keen to capture this seismic shift are tuning in to conversations happening outside of traditional shopping paradigms.

Gamification is unique in its ability to foster a participatory culture, building customer engagement and brand loyalty in the long run.

Rebuilding the customer relationship requires retailers to be flexible about taking risks, and to adopt a different set of performance metrics as they add novel experiences to traditional retail models.

Gamification is set to incubate a different retail landscape in the years ahead.

• Nithinan Boonyawattanapisut is CEO & co-founder of HotNow.