How Mobile Games
Boost the Impact of
Retail Loyalty Programs

The biggest problem with loyalty programs is that most of their points are never used. Estimates from 2020 found that 51.4% of accrued points were never redeemed. This equates to $140 billion in unclaimed loyalty points in the US, and $48 trillion globally.

When shoppers collect reward points but never use them, it’s a sign of deeper systemic problems. For retailers, some of the dangers of unclaimed reward points include:

Shoppers don’t redeem points when they don’t care about the rewards. For example, physical items that people don’t want or need will never encourage extra spending or loyalty.

Another common issue is that reward items are too expensive. Imagine that shoppers earn one loyalty point for every dollar spent, and the cheapest reward requires 500 points. Most shoppers will say, “I need to spend $500 just to earn the cheapest reward, which I don’t even want? No thanks. I don’t care.”

This is understandably unfair for the retailer because the shopper also gains the value of the items that they purchased. Realistically though, if the smallest reward requires several visits to acquire, people will quickly forget that the loyalty program even exists because the rewards are too infrequent and out of reach.

Retailers can’t cultivate loyalty if their reward program doesn’t create desire.

Retailers must be able to honor every point redemption, so as the total amount of unclaimed loyalty points grows, the company’s total liabilities grow as well. For physical rewards, this means dedicating more warehouse space to store these products.

In the case of retailers that offer discounts in exchange for points, a sudden consumption of loyalty points can significantly impact revenue compared to the amount of product sold.

Retailers often mitigate their growing liability by giving loyalty points an expiration date. Unfortunately, this “solution” causes a larger problem. The ticking clock only motivates certain people effectively, and only in specific situations.

In most cases, shoppers who discover that their points are gone and they got nothing in return will be furious. It feels like they’ve been stolen or tricked. When they see that the retailer who gave them the points also took them away, it feels like a betrayal and will push them away from the brand and toward its competitors.

Not earning loyalty points at all is better than earning points and seeing them expire.

As customers’ loyalty accounts accumulate points, they become a larger target for hackers and scammers. These people will employ a variety of tactics to gain access to accounts and personally identifiable information (PII).

Offering customers easy and engaging ways to redeem their points more frequently means that their accounts become less desirable to would-be fraudsters.

The success of loyalty programs is measured by several KPIs including:

• Enrollment and retention
• Redemption rate
• Revenue and sales impact
• Customer lifetime value (CLV)

These metrics are all closely related with one another, so low redemption rates are a warning sign that other KPIs are likely suffering as well.

For the managers and directors of loyalty programs, poor KPI ratings show an opportunity to turn things around, boost the company’s brand equity, and look like a hero in the process.

The core of mobile game partnerships is adding premium in-game items to the list of available rewards. More involved collaborations can include cross-marketing and in-game integrations. In either case, mobile game rewards are a highly effective channel to improve loyalty program KPIs across the board.

What makes mobile games superior to other rewards?
Mobile gaming is a globally popular activity with 2.2 billion active gamers. As a segment of the gaming industry, mobile platforms generate half of all revenues, estimated at $140 billion in 2023.

Along with their popularity, mobile games come in every genre, theme, and style. This means that companies can always find a gaming partner that matches their own brand identity and target audience.

All mobile games have a core audience. While traditional marketing tends to think of these audiences in terms of demographics (age, gender, location, etc.) gamers are better understood through their personality types. Games naturally appeal to people’s sense of adventure, competition, or creativity, which are inherently more effective and meaningful.

Benefit: New Shoppers and Members
Partnering with mobile games also means sharing audiences. For every mobile game partner, their audience is exposed to the retailer’s brand and incentivized to shop there for extra rewards. It gives those gamers a reason to choose that brand over the competition. For example, people will often go to the closest grocery store, but will make the effort to shop at a chain that also boosts their gaming experience.
Regular shoppers of a retail brand may not sign up for its reward program because they see no value in the rewards. However, when loyalty points translate into premium entertainment, that can create enough motivation to sign up.

Benefit: Increased Point Collection and Redemption
In mobile games, premium items generally require cash, which makes them inherently valuable. When players can redeem loyalty points for premium items, then those points are equally valuable.

Retailers can distribute premium items in small quantities for low point values. For customers with small point balances, they can collect rewards, possibly in a single shopping trip. They also might decide to purchase a few extra items just to earn enough points for the prize they want.

For customers that already have large point balances, retailers can offer larger premium packs, allowing them greater value per item. This serves the personality type that wants to accrue points over several purchases for a greater reward.

Benefit: Increased Engagement and Loyalty
Low-cost digital rewards create the added benefit of increased engagement. When shoppers can redeem a reward from a single purchase, they will engage with the system more frequently and turn it into a comfortable habit. This is essential to creating brand loyalty, and is easily facilitated by adding premium game items.

The biggest challenge for retailers is determining which mobile games will make ideal partners. With so many options to choose from, time spent on research and communication can spiral out of control.

Companies prefer to work with an agency like Play Management Company (PlayMGT), which has direct access to the top mobile game titles and studios. PlayMGT comes equipped with the research on time-tested mobile games and can create custom campaigns based on specific goals, demographics, and regions.

Contact the team today and see how mobile game integrations can breathe new life into loyalty programs and brand equity.