How Retailers Are Using Brand Partnerships To Encourage Brand Loyalty

By Lee Metters, Retail Client Partner, Awin

The pandemic triggered a significant shift in customer behaviour which has forced retailers to rethink their brand loyalty offerings. With online retail performance up over 100%, and 13% of shoppers seeing the pandemic as an opportunity to try new brands, customers are increasing their propensity to switch between different retailers.

Whilst this might offer a sign of encouragement when trying to attract new customer audiences, it does mean that retailers will need to work harder to encourage second and third customer purchases. More worryingly, it also means that retailers can no longer rely on their brand loyalty offering alone to keep their customers coming back.

Instead, brands must pivot their loyalty offering.

One thing that is clear is that customer attitudes and behaviors have changed as a result of the pandemic; so too have their expectations. IMRG reported earlier this year that 38% of shoppers would like to see an improvement in loyalty offers from retail brands. I have fond memories of printing my Advantage points instore at my local Boots and then redeeming them at the point of check-out. But loyalty propositions must evolve. As more shoppers move online, brand loyalty propositions must have a digital focus.

But how?

Through the use of brand partnerships.

Collaboration opportunities that boost your loyalty offering

Putting it simply, brand partnerships provide collaboration opportunities that can be formed with complementary brands to increase customer loyalty. Leading brands such as MyProtein, I Saw It First and Iceland have already executed brand partnership campaigns; most notably MyProtein who partnered with SimplyCook to drive customer loyalty by offering customers a free recipe box with all purchases over an agreed spend threshold.

In this digitally driven example, both brands benefit from mutual reward as a means of driving customer loyalty. MyProtein have a value-added incentive, offering customers a greater service, with the core aim of enhancing the user experience to encourage customer loyalty. Whilst SimplyCook leverage their relationship with MyProtein to reach prospect customers, looking to acquire through the gifting of a free sample to encourage a second, paid, transaction.

By offering a value-added incentive, either at the point of purchase like MyProtein, or as a retrospective targeted follow-up, retailers are able to create valuable and innovative digital collaborations with complementary brands. Typically, value added incentives would be offered in the form of an offer or reward, no different to the instore point collection benefits that customers have long been accustomed to.

When it comes to launching a brand partnership campaign online, retailers have two clear routes to market. They can enter into a reciprocal relationship with another complementary brand, or formulate a more traditional set-up, with one brand acting as the promoter and the second brand being promoted. The type of partnership will likely depend on the brands’ goals, but both can be highly effective strategies in creating brand loyalty at different points throughout the customer lifecycle.

Using brand partnerships to adapt a new business strategy

A particular brand partnership success story is that of tastecard. With a business model that focuses on providing customers with discount and incentives within the hospitality industry, a sector which was significantly impacted by the pandemic, tastecard used brand partnerships to quickly adapt their business strategy.

tastecard set three clear, but simple objectives for their brand partnership strategy; to build new revenue opportunities for the business, to attract new customer subscriptions throughout the pandemic, and to prevent their existing subscriber base from churning.

tastecard, created a bespoke ‘member perks’ offer portal on their site, and within the first two weeks of their brand partnership strategy being live, they had already partnered with more than 35 brands, including the likes of LOOKFANTASTIC, Sky and BT. And by running their partnership strategy through the affiliate channel, tastecard were able to earn commission for driving customers to their partnership brands.

Through this new strategy, tastecard were able to monetise their existing subscription product, whilst also encouraging loyalty and reducing the threat of churn by offering brand partnership incentives online.

The brand partnerships activity that tastecard ran yielded a 399% increase in inbound revenue and a 167% increase in sales. And owed to the success of this campaign, brand partnerships continue to be an integral part of the tastecard business strategy, with over 80 partnerships created.

The power of partnerships

What tastecard were able to achieve, and what I want this article to demonstrate, is the power of digitally driven brand partnerships as part of any retailer strategy.

The pandemic has driven a period of digital transformation never seen before. As a result, traditional brand loyalty incentives and propositions must evolve as shopper behaviour and attitudes change. Through brand partnerships there is an opportunity for retailers to collaborate with complementary brands online, incentivising customer loyalty at different stages of the customer life cycle.

The added benefit of brand partnership loyalty offerings, and as tastecard have demonstrated, is that online partnership activity is underpinned by the presence of brand equity, only achieved by partnering within complementary brands through association.

For more information on digitally driven brand partnerships, and how your brand can benefit, please get in touch with [email protected].

By Lee Metters, Retail Client Partner, Awin

Published 24/08/21

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