While 47 percent of retailers increased their mobile marketing budgets this year, 73 percent still do not offer mobile access to their loyalty programs, according to a new report from Boston Retail Partners.

However, 56 percent of retailers are working towards offering more mobile capabilities in the next two years, such as the ability to track point balances, redeem rewards, send alerts to customers near a reward threshold and offer special promotions. Another key finding was that 883 percent more retailers plan to have the ability to identify customers when they walk in the store via their smartphones in five years.

“Mobile devices and the opportunities they represent will have the greatest impact on the evolution of loyalty programs in the next few years,” said Don Yee, vice president at Boston Retail Partners. “More than 50 percent of retailers are working to enhance their mobile capabilities for their loyalty programs in the next two years.

“Another way that retailers are beginning to engage with their customers is through gamification,” he said. “Engaging customers by utilizing game dynamics – gamification – helps stimulate brand engagement and foster long-term loyalty.”

Budgeting for loyalty
The research found that 62 percent of retailers increased their 2015 budgets to enhance their loyalty programs, which are a top priority for 46 percent of retailers.

However, many retailers are finding it a challenge to keep pace with the advances in mobile technology, which may be why so many still not offer mobile integration with their loyalty program.

Some of the challenges retailers face that are making it difficult to integrate mobile with loyalty include building the infrastructure and developing the skills required to manage multiple mobile interactions. Another challenge is properly balancing customer experience with privacy concerns.

Retailers increasingly recognize the potential of mobile to provide new ways to interact with customers, including providing instant coupons during checkout via NFC, alerting customers of promotional items via email, SMS text or mobile app and texting coupons to customers who are walking or driving by a store.

Retailers are also increasingly looking at applying game design to their loyalty programs to make them more fun and engaging.

Gamification takes off
Boston Retail Partners’ research shows an explosion in the use of gamification from 6 percent last year to 31 percent this year and a 181 percent planned increase within the next five years

By rewarding users with points or badges in exchange for store visits, purchases or watching product videos, retailers have further information on shopping and purchasing behavior to fuel future sales.

Gamification can also encourage customers to demonstrate their loyalty through social media interactions by “liking” on Facebook or posting images of their purchases on Instagram.

The research uncovered strong interest from consumers in mobile loyalty, with almost half wanting to engage with programs via mobile but, in 61 percent of the cases, they are not aware of whether or not the programs they are enrolled in offer a mobile app.

Coalition loyalty
Digital loyalty rewards programs and coalition loyalty programs that span multiple retailers are two ways retailers are looking to blend mobile and loyalty.

The recently launched Plenti from American Express enables members to shop at multiple retailers across categories to accrue points that can be used for savings at various businesses.

Shopkick is an app that offers rewards for walking into stores, scanning product bar codes or QR codes and making purchases. Points can be redeemed for gift cards, song downloads and movie tickets.

For retailers’ loyalty programs to effectively engage customers and increase loyalty, they need to enable enhanced services, such as real-time customer identification in-store to enable guided selling; customized rewards based on customer preferences; gamification to engage customers and encourage social interaction, and mobile tracking and redemption of rewards and offers.

“To operate a successful loyalty program requires a single centralized CRM platform to gather and maintain customer information across all channels,” Mr. Yee said. “This is prompting many retailers to implement a single commerce platform across all customer touch points that is tightly integrated to a centralized CRM system.

“Together, these represent a unified commerce platform, which facilitates high efficiency by combining CRM, traditional point of sale, mobile, Web, clienteling, order management and fulfillment into a consolidated, real-time platform,” he said. “It also provides a single version of the truth across all channels to enable visibility and availability of customer information that can be used to support guided selling functions.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York