In 2025 the idea of a traditional retail loyalty program might seem, to some, quite dated. With price checking so much easier to do, many retailer loyalty cards offering discounts immediately, and the proliferation of different retailers, shopping in one place in order to collect points to cash in for products could be seen as ‘old school’.
However with the right promotion, and right licensed brand attached to it, not only can retailers see great sales uplifts, but the licensed brand can benefit not only from licensing revenue but also great brand awareness and consolidation.
Retail loyalty programs and licensing can be a powerful combination, offering retailers opportunities to enhance customer engagement, drive sales, and strengthen brand loyalty. The huge amount of promotion, both in and out of store, that the licensed brand receives is fantastic ‘free’ marketing.
Leveraging popular licensed brands or characters allows retailers to create exclusive products and experiences to drive customer loyalty. The program can also attract new customers, as well as drive sales and foster deeper connections with existing customers.
Differentiation and Exclusivity:
Including licensed IPs in their loyalty programs allows retailers to offer unique, limited-edition products and experiences that aren't available elsewhere, making them stand out.
Increased Customer Engagement:
Licensed products can be used as rewards, bonus points multipliers, or even as part of tiered loyalty programs, encouraging customers to participate more frequently and increase average basket spend.
Stronger Brand Connection:
By including licensed and popular and beloved brands in the marketing and product offering, retailers can tap into existing fandoms and emotional connections to build stronger brand loyalty and drive trial with new customers.
Cross-Promotion Opportunities:
Licensing can create opportunities for cross-promotion between the retailer and the licensor, expanding reach for both and attracting new customers for the retail and drive brand awareness with wider demos for the licensed brand.
New Revenue Streams:
Beyond rewards, exclusive licensed products can be sold to program members, creating a new revenue stream for the retailer.
When developing a branded retail loyalty program its important to consider the following factors:
Choosing the Right Brand:
Selecting a brand that not only resonates with the retailer's existing audience but can also attract new customers is crucial for success. Whether it's tied to a big movie release or sports tournament, an evergreen brand with parental appeal or a ‘hot’ brand that is in demand.
Quality Control:
Ensuring the quality of the licensed products and premiums is paramount to not only maintaining brand integrity but also customer satisfaction.
Legal Agreements:
The licensing agreement, as with all deals, must be carefully negotiated and managed to protect the interests of both the retailer and the licensor. Often a sliding scale of royalty rates and /or bonus payments to the licensor are included depending on how successfully the program performs.
Adaptability:
Retailers should be prepared to adapt the licensing strategies for their retail loyalty programs based on market trends and customer feedback. Also having exclusive licensed products for the brand they have partnered with for sale in store is important for those customers that want instant gratification or have been driven to the store by fandom for the licensed brand.
Retail loyalty programs can take many different forms. The type that springs to mind for most people is when a supermarket partners with a popular children's character, offering exclusive toys or merchandise as part of a loyalty scheme to attract families.
However other types of retail loyalty program include when a fast fashion retailer collaborates with a designer or celebrity. Creating limited-edition clothing or accessories available only to loyalty program members. Or when film studios offer movie-themed merchandise related to a new release for members of specific theater chains. Many retailers, including those exclusively online, have loyalty schemes which opens up opportunities for licensing to be integrated into them.
The net-net is that by carefully integrating licensing into their loyalty programs, retailers can create a more engaging, rewarding, and ultimately successful customer experience. And the licensor can benefit from great brand promotions and welcome licensing revenue.