In today's highly competitive retail industry, businesses are constantly searching for innovative strategies to improve customer engagement, boost brand loyalty, and increase sales. One approach that has gained significant popularity is gamification.
In this article, we are going to focus on gamification in retail. You’ll find out what gamification is and how it can positively impact the retail industry. Let’s dig in!
What is gamification and what’s its impact in the retail industry?
Gamification involves incorporating gaming elements and mechanics into non-gaming contexts to influence customer behavior positively. It turns shopping into a game, providing a fun and interactive experience for consumers while offering several benefits for retailers.
The effectiveness of gamification in the retail sector is undeniable. According to Boston Retail Partners, a staggering 87 percent of retailers plan to implement gamification within the next five years. This statistic demonstrates the growing recognition of gamification as a powerful tool for engaging customers and enhancing their overall shopping experience. Additionally, 46 percent of retailers consider structured loyalty programs a top customer relationship management (CRM) priority, highlighting the importance of fostering customer loyalty through gamified experiences.
Gamification has been successfully adopted by major companies such as Adobe, NBC, eBay, Walgreens, Oracle, and Cisco, among others. These organizations have integrated gamification techniques into their consumerization strategies, leveraging the competitive nature of individuals to motivate both customers and employees.
One of the reasons why gamification is so powerful is that humans are inherently competitive. People are easily motivated by rewards, whether they are physical, monetary, or even virtual. Gamification taps into this competitive streak, empowering businesses to incentivize customers and employees effectively.
Gamifying the shopping experience
Loyalty programs are a prime example of gamification, where progression bars and achievement-based mechanics drive customer engagement and motivation. Starbucks has successfully implemented a gamified loyalty program that rewards customers for their purchases. Members of the Starbucks Rewards program can earn stars for every transaction, and as they accumulate stars, they unlock different levels of membership, each offering various perks and benefits. The gamified nature of the program encourages customers to continue patronizing Starbucks to earn more rewards.
Augmented Reality (AR) is another technological advancement that has greatly contributed to the success of gamification in the retail industry. AR overlays digital elements onto the real world, allowing retailers to create immersive experiences that deeply engage customers with their brands.
For instance, LEGO has embraced gamification and AR to enhance the customer experience in their physical stores. They have introduced an AR-powered app called LEGO AR Studio. When customers visit a LEGO store, they can use the app to scan select LEGO sets or displays. The app then overlays virtual elements, animations, and interactive content onto the physical LEGO models, bringing them to life in a digital way. Customers can play games, solve puzzles, and unlock virtual rewards within the app. This gamified AR experience not only entertains and engages customers but also encourages them to explore different LEGO products and spend more time in the store.
To create successful gamified applications, User Experience (UX) and User Interface (UI) play vital roles. High-quality UX design is crucial in ensuring that customers have a seamless and enjoyable experience, while UI design focuses on the visual appearance and efficient interaction with the application. A well-designed UI/UX for gamified apps enhances brand recognition and loyalty, as users begin to associate the app with the brand's identity.
Target's Cartwheel app is a gamified mobile platform that offers customers personalized discounts and deals. Users can browse through offers, save them to their digital wallet, and then redeem them at the checkout. The app also incorporates a social element, allowing users to share their savings and compete with friends to see who can accumulate the most discounts.
Various gamification techniques are employed to motivate and engage customers effectively. Rewards, such as badges, points, levels, discounts, or free gifts, provide a dopamine hit that encourages customers to complete tasks and engage further with the brand. Progress bars create a sense of achievement and motivate customers to reach their goals.
Challenges are powerful tools that direct customers towards desired actions and offer tailored experiences based on their context. In-game or virtual currency shapes user behavior, increases retention, and creates a desire for material benefits. Finally, the creation of virtual environments within gamified applications further enhances engagement, encouraging customers to return to the app repeatedly.
While gamification has primarily been associated with mobile apps, its benefits extend to in-store experiences as well. Implementing in-store games and gamification elements can increase the time customers spend in a store, attract new and returning customers, promote brand awareness, and facilitate customer acquisition. These strategies provide retailers with valuable real-time data on customer preferences and behavior, enabling them to target their audience more effectively.
With the rapid advancement of technology, Virtual Reality (VR) and AR are revolutionizing the retail industry. Companies like IKEA and Lowe's have begun utilizing these technologies to enhance the customer shopping experience. VR creates artificially simulated environments, while AR enhances the real world with digital elements. In a shopping context, AR can improve the changing room experience by allowing customers to view outfits from different angles, and making informed purchasing decisions.
Gamification has emerged as a powerful tool for retailers to enhance customer engagement, increase brand loyalty, and drive sales. By incorporating gaming elements into the shopping experience, businesses can tap into consumers' natural competitiveness, motivating them to actively participate and interact with their brands.