Properly managed loyalty programs are becoming increasingly common in today's retail landscape. Most Australians are members of a loyalty program, and usage is going up.

Understanding Point Expiry Mechanics

Point Expiry in Loyalty Programs: A Smart Strategy for Your Retail Business

You're likely familiar with loyalty programs, you cannot get away from them today. You may have seen their power to keep customers coming back. Today, let's dive into a crucial aspect many small business owners overlook: point expiry.

Why Point Expiry Matters

Point expiry isn't just about managing your books, although it helps there as large numbers of unused points can be financially troubling, as some of my clients have found out.  It is a powerful tool for driving customer engagement. Customers are much more motivated by the possibility of losing their rewards than they are by the possibility of gaining new ones. This psychological trigger can significantly boost your program's effectiveness.

Setting Up Your Expiry System

Choose the Right Timeframe The sweet spot for most Australian retailers is 12 to 24 months. This gives your customers ample time to earn and redeem points while keeping your program manageable. We tend to recommend 12 months. 

Clear Communication: Your POS system should automatically track point balances and send timely reminders about expiring points. Your POS System makes this process seamless, as it handles everything from:

• Point balance tracking
• Automated expiry notifications
• Redemption monitoring

Making It Work for Your Business

Clever Program Design: Your loyalty program should offer multiple redemption options to prevent point hoarding. Consider including:

• Essential rewards that are easily attainable
• Premium rewards for higher spenders
• People love charitable donation options for unused points; remember to select a few non-partisan charities they can pick from. 

Managing Customer Expectations

The key to success is transparency. Your POS system should provide clear visibility of:

• Current point balances
• Upcoming expiry dates
• Available redemption options

Measuring Success

Your POS analytics should track crucial metrics like:

• Redemption rates
• Customer engagement levels
• Revenue impact

Remember, a well-managed point expiry system isn't about taking away value from your customers - it's about creating a dynamic program that keeps them engaged and returning to your store.

Want to learn how a modern POS system can help you manage your loyalty program more effectively? Let's chat about finding the right solution for your business.

World Wide Web Day is when the World Wide Web started 35 years ago.

In just 35 years, the internet has revolutionised retail, driving business digital transformation at an unprecedented pace. It has reshaped how businesses operate in an increasingly digital world.

The Evolution of POS Software

Its been remarkable. The days of cumbersome cash registers and tedious manual entry are behind us. The internet's influential role has reshaped the operations and customer experience for local businesses.

• Local shops now need an online presence for small retailers
• Access to e-commerce platforms
• Social media to improve customer engagement
• The fax and much of the mail have practically gone
• Digital receipts

Digital Payment Solutions

Today, most payments, such as EFTPOS and credit cards, are made online. We at POS Solutions were the first software company to introduce this to Australia. https://www.possolutions.com.au/pages/tyro-payments.

Retail in the Internet Era

E-commerce has created new revenue streams and broadened customer access for small businesses. The COVID-19 crisis accelerated this trend.

Today embracing the power of data, including CRM and analytics, has emerged as a game-changing strategy for local retailers.

Customer relationship management (CRM) tools have become indispensable for small retailers. These systems allow businesses to:

• Track customer preferences and purchase history
• Personalise marketing efforts
• Improve customer service

The main reason this works today is that, with email and internet newsletters, businesses can communicate effectively for free with their customers. Before the internet, this was very expensive and only available to large companies.

Local Business Marketing Online: A Game-Changer

Local business marketing online has revolutionised how local retailers attract and retain customers. Strategies like local SEO, social media marketing, and targeted online advertising need to be looked at  to compete effectively.

Conclusion: Embracing the Digital Future

The internet has undoubtedly transformed retail.

There is no going back. 

The Australian retail landscape is in flux; we all know that what is essential with these studies is not just what they say but also what others, for example, banks that control the finances and prospective buyers and their accountants, are being told. These people control the inflow of money.

What we do know is that retailers face obstacles.

- We have a rising cost of living

- We have significant supply chain challenges

- Shifting consumer preferences

As everywhere, only those who are willing to adapt and evolve do well.

Let's dissect some critical insights from Roy Morgan's recent retail address and a lively discussion between retail experts Laura Deasi and Paul Zara, CEO of the Australian Retailers Association.

Key Takeaways from the Roy Morgan Address

• Population growth is vital: Australia's growing population has been a lifeline, somewhat shielding us from a full-blown recession. These people have been a big help to retailers.
• The cost-of-living bites: Rising costs disproportionately affect young families with children. However, some sectors and demographics still have spending power. The traditional pattern in such circumstances is that men's products go down, followed by kids' and women's products.
• Changing spending patterns: Consumers are reducing spending in some categories but increasing in others. There's a surge of interest in bargain hunting and sustainable options.

The Rise of Online Giants

• Amazon's Dominance: Amazon is rapidly expanding its customer base and is now one of Australia's top five non-food retailers. Their vast stock and focus on fast delivery pose a significant challenge to brick-and-mortar retailers.
• Ultra-Cheap Challengers: Shein and Temu have entered the scene with rock-bottom prices. However, concerns about quality and ethics may turn some consumers away in the long run.

What Does This Mean for Aussie Retailers?

Paul Zara and Laura Deasi offered valuable advice and considerations:

• Value is the New Currency: Price matters more than ever, but it's not just about the cheapest deal. Emphasise quality, durability, and your product's long-term benefits.
• The Ethics Factor: Consumers are increasingly conscious of your company's ethics. My advice still applies: Do not fall into this trap as whatever you do many will not like it.
• Online presence: I do not know how or why anyone would want to escape without an online presence.  Offer something and have "click-and-collect" options. A modern and robust online presence is essential for meeting the expectations of today's shoppers.
• Tech to the Rescue: Your point-of-sale (POS) system can be your best ally.
  • Streamline operations: Automate tasks to reduce overhead and free up time for customer service.
  • Personalise experiences: Use our CRM features to provide recommendations and targeted promotions.
  • Data-driven decisions: Track sales patterns and inventory levels to optimize your offerings and minimise waste.

Your Competitive Edge: The Human Element

Retail has always been a people-powered industry. While tech upgrades are vital, the exceptional in-store experience remains a decisive advantage for brick-and-mortar stores:

• Become an expert: Offer valuable product knowledge and tailored recommendations that online giants can't replicate. Coles has even little things like greeting cards, but I will not get any advice there on the sort of card I need.
• Build relationships: Friendly, personalised service creates loyal customers who become your advocates.
• Community connections: As Paul Zara emphasizes, physical stores are the heart of local communities. Support community causes to show that your values extend beyond sales.

The Future of Retail – Adapt and Thrive

The retail landscape is constantly evolving. Businesses with the foresight to adapt have a chance to excel:

• Embrace innovation: New technologies can transform your operations.
• Test and learn: Experiment with new products, displays, and promotions. If they work, double down. If they fail, be ruthless and get rid of them. Do not reinforce a defeat.
• Partnerships matter: Collaborate with as many people as you can.

To do well in 2024, we need to focus. 

Share your thoughts in the comments below!

Australian retail turnover rose 2.0 per cent (seasonally adjusted) in November 2023, according to figures released today by the Australian Bureau of Statistics (ABS).

Robert Ewing, ABS head of business statistics, said: "Black Friday sales were again a big hit this year, with retailers starting promotional periods earlier and running them for longer, compared to previous years.

“The strong rise suggests that consumers held back on discretionary spending in October to take advantage of discounts in November. Shoppers may have also brought forward some Christmas spending that would usually happen in December." 

Okay, accepting that the latest retail sales number did show a robust 2% monthly growth, but it may be distorted by the increasing popularity of Black Friday sales in November. More about that later. 

One bit of good news is that this shows that consumers are still spending despite higher interest rates. Our strong job market certainly helps this. We will need to see the December figures to see whether it's simply that consumers are spending more or that all they are doing is bringing forward their purchases from December to November.

Black Friday sales impact on Australian retail

Black Friday sales have become an increasingly prominent retail event in Australia over the past decade. Originally from the US, it has evolved into a much larger affair in Australia. Black Friday has become mainstream in the past ten years, changing to a "Black November" event in Australia. Rather than just a day,  retailers now run week-long or even month-long sales promoted under the Black Friday banner. See this graph for the past ten years of November growth.

The future of Black Friday in Australia

Black Friday will remain a prominent retail event in Australia, especially as more consumers become conditioned to expect big sales in late November. Retailers should continue to expand Black Friday promotions to maximise sales. Today, many shops open on the Black Friday public holiday to capitalise on foot traffic.