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RFID Enabled Retail Loyalty Programs: Everything You Need to Know

  • Akansha Sharma
  • Jul 21, 2023
  • RFID
RFID Enabled Retail Loyalty Program

The retail sector plays a key role in the maintenance of a market and industries. These businesses are responsible for providing the finished goods to the consumers. Presently, you cannot go outside without encountering a retail outfit, giving rise to competition. In such a competitive market, businesses have to come up with innovative and effective solutions to survive. One such time-tested solution is loyalty programs.

And coincidently, many businesses use RFID-enabled retail loyalty programs.

What are Retail Loyalty Programs?

In the retail business, one of the most important parts of ensuring success is to create repeat customers. One of the easiest ways to ensure that customers return is by creating loyalty programs. These programs are popular not just in retail, but a variety of industries, like air travel, hospitality, etc.

A loyalty program refers to a special tier group/membership that a brand offers loyal customers. These memberships provide exciting new offers to the customers like discounts, vouchers, unique services, latest deals, etc.

There are many ways of operating these programs, some businesses like airlines have online portals. Other businesses like Reliance Mart (a retail outfit) use loyalty program cards. One very popular technology is the use of RFID smart ID cards for loyalty program members.

How RFID Works with Retail Loyalty Programs?

Radio frequency identification technology can play an important role in maintaining a loyalty program. They can allow businesses to hand out the customer simple membership cards with RF inlays inside them, that contain all their information. 

Businesses would often place RFID systems at key locations like entry, point of sale, and checkout. This allows the business to streamline operations & shopping for the customers with loyalty membership. It also makes it easier for workers to identify members and offer them a personalized shopping experience.

Advantages of RFID in Loyalty Programs

There are numerous advantages of integrating RFID with loyalty programs. From efficiency, and accuracy to customized experience. So, let’s check out some of the best reasons to implement an RFID loyalty program system.

(A). Easy to Use

The biggest benefit of such a system is its ease of use. Unlike using online portals or mobile apps, RF cards eliminate the need for the customer to perform any function to avail of the benefits of the membership. All they have to do is carry their cards with them and use them during shopping to avail the rewards.

(B). Personalized Offers & Discounts

These cards can be read at the entry point, alerting the system of the presence of a member. Then, the system can send personalized notifications and offers to customers while they are shopping. This allows the customers to have access to all the discounts & offers that are filtered out according to their shopping habits and needs.

This not only makes shopping a more inclusive and enjoyable experience but also makes the whole experience more personalized.

(C). Shopping Suggestions

By having access to the data regarding past product selection and checkouts, the system can alert the member and provide them with customized suggestions. For example, if a customer that uses a particular item cannot find that item, the system can suggest them similar alternatives, based on the information on the item and the alternatives chosen by other customers that prefer the same product.

These suggestions not only help the customer leave the store happy but also promotes other lesser-known brands with similar ingredients and allow them to better compete in the market.

(D). Data Collection & Analysis

When it comes to marketing and creating campaigns, the most foundational element needed, is information. By having access to critical data and its analysis, businesses can have a clear overview of the market and create customized marketing strategies and business plans.

RFID Components Required in Such Systems

Now that you know the importance and benefits of RFID technology in retail loyalty programs, let’s talk about what it would take to create such a system. Similar to any RF system, you need some basic components to create an effective data communication array.

(A). Customer/Member ID

The easiest and most popular means of providing a verifiable ID to members is to use an RFID Smart Card. These cards can have either active or passive RF inlays. Although, they are almost always HF or NFC, to provide a measure of security.

(B). POS Integration

The first thing that you need to install at the point of sale, is a reader and antennas. This is the hardware that allows the POS employee to identify the member and access their records. The system reads the card and accesses the central database to retrieve the information of the member, then proceed to complete the checkout.

The card purposefully does not contain any information other than the identification number. This is done as a security measure, to deter identity theft.

(C). Other Components

Aside from the cards 7 the POS system, businesses may also implement RF systems in other crucial points within the facility. For example, employing antennas at hotspots like different brand sections, allows the system to provide custom notifications to the shopper as they enter from one area to another.

Frequently Asked Questions

Q1. How is RFID used in retail?

There are many applications of RFID technology in the retail sector, these systems help by optimizing the daily operations of the business. The most popular applications are:

•   Inventory Management

•   Supply Requisitioning

•   Loyalty Membership Programs

•   Point of Sale Integration

•   Security Systems

Q2. What is a retail loyalty program?

A retail loyalty program is a club/membership that stores/brands offer to their return or regular customers. These programs encourage customers to keep engaging with the brand, by offering them exciting offers, discounts, and services.

Q3. What is the most popular loyalty program?

Practically all retail businesses have started offering loyalty programs to their customers, to ensure a successful business. Some of the most popular programs currently are-

•   Starbucks Rewards Program

•   Reebok VIP Membership

•   Baskin-Robbins Loyalty Program

Disclaimer: The information presented here is for general information purposes only and true to best of our understanding. Users are requested to use any information as per their own understanding and knowledge. Before using any of the information, please refer to our Privacy Policy and Terms and Conditions.

  • Created on Jul 21, 2023

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