Revolutionising retail in SA through gamification

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By Rakhee Naik, Managing Consultant – Insights at KLA

Retailers in South Africa are at the cusp of a transformative shift as the potential of gamification is about to redefine the shopping experience.

By incorporating elements such as points, badges, and leaderboards, businesses aim to elevate customer engagement and foster brand loyalty in unprecedented ways. The convergence of advanced technologies like VR, AR, and AI further amplifies this shift, promising highly personalised and immersive interactions.

As this innovative approach gains traction, the implications for customer relationships and sales growth are profound, inviting stakeholders to consider its broader impact on the retail landscape.

What is gamification?

Gamification, frequently employed across various sectors, involves integrating game design elements into non-game contexts to engage and motivate users effectively.

This practice leverages engagement strategies that are rooted in behavioural psychology to enhance user experience. By incorporating game mechanics such as points, badges, leaderboards, and challenges, gamification aims to create an environment that encourages participation and sustained interest.

Examples of popular gamification

  • In educational platforms like Duolingo, game mechanics are used to make language learning interactive and enjoyable, thus improving user retention.
  • The fitness industry, exemplified by the Nike+ app, employs a rewards system to motivate users through achievements and social sharing.
  • Similarly, in the workplace, Salesforce’s Trailhead learning platform uses gamification to facilitate skill acquisition and professional development.

The core of gamification lies in its ability to tap into intrinsic and extrinsic motivators by creating a sense of accomplishment and progress.

This approach not only enhances user experience but also fosters loyalty and commitment. By understanding the principles of behavioural psychology, businesses can design engagement strategies that effectively drive user behaviour and achieve desired outcomes, thereby transforming ordinary interactions into compelling and enjoyable experiences.

Benefits of Gamification for Retailers

Retailers stand to gain significant advantages by integrating these game design elements into their customer engagement strategies.

Enhanced customer loyalty

Enhanced customer engagement is a primary benefit, driving increased interaction and time spent with the brand. This heightened engagement often translates into improved customer loyalty.

These loyalty benefits not only foster repeat business but also create a community of brand advocates.

Data & insights

Moreover, gamification enables the collection of valuable data insights from customer interactions.

For instance, TEMU, the Chinese eCommerce giant that has taken South Africa by storm, leverages gamification across its app to gather detailed data on user preferences and behaviours. This data is crucial for tailoring marketing strategies, optimising inventory, and enhancing overall customer experience.

Increased revenue

Customer engagement has a substantial financial impact. According to Gallup’s research, highly engaged customers are significantly more valuable than average customers. Specifically, these fully engaged customers contribute 23% more in terms of their spending (share of wallet), profitability, revenue, and the growth of their relationship with the company.

By making shopping more engaging and rewarding, gamified experiences encourage higher customer participation, leading to increased sales.

YourView Poll survey

In a recent poll conducted on the YourView panel, we asked 718 respondents to share which gamification techniques they find most appealing when shopping. The results highlighted a clear preference for certain strategies, indicating what engages customers the most.

  • 34.4% of respondents said: Loyalty programs offering rewards and discounts e.g. “Earn points for purchases and get discounts on future buys.”
  • 11%: Mobile apps with gamified features e.g. “Complete app challenges to unlock exclusive discounts.”
  • 10.7%: Social media engagement activities e.g. “Like posts for a chance to win store goodies.”
  • 10.4%: Interactive product demonstrations e.g. “Test products hands-on in-store with interactive demos.”

Loyalty programmes offering rewards and discounts

The most popular gamification technique, chosen by 34.4% of respondents, was loyalty programs that offer rewards and discounts. According to YouGov profiles, 72% of South Africans spend more money on brands when they are a member of their loyalty programme. Shoppers are motivated by the opportunity to earn points with their purchases, which can be redeemed for discounts on future buys. Based on YouGov Profiles, 7 in 10 South Africans are more loyal to brands that they are a part of a loyalty programme with.

Mobile Apps with gamified features

Coming in second place, with 11.0% of the votes, were mobile apps that incorporate gamified features. These apps engage users through challenges and tasks that, when completed, unlock exclusive discounts and special offers.

Social media engagement activities

Social media engagement activities were the choice of 10.7% of respondents. This is no surprise as majority of South Africans (74%) mainly use social media for entertainment and news content – shows YouGov profiles. In terms gamification through social media, these activities typically involve interacting with a brand’s social media posts, such as liking, sharing, or commenting, for a chance to win store goodies or receive discounts.

Interactive product demonstrations

10.2% of respondents found interactive product demonstrations to be a good gamification technique. These demonstrations allow customers to test products hands-on in-store through interactive demos. This is a great technique as YouGov profiles shows that 6 in 10 South Africans are tired of dull shopping experiences. This method enhances the shopping experience and makes the decision-making process more engaging and enjoyable.

The future of retail with gamification in South Africa

It’s not just the US and Europe seeing growth in the gamification market.

The future of retail with gamification in South Africa promises a landscape where customer experiences are not only more interactive but also deeply personalised and technologically advanced. Gamification strategies will evolve, leveraging sophisticated data analytics to understand consumer behaviour on a granular level. This insight will enable retailers to create highly targeted, rewarding experiences that resonate with individual customer preferences.

As tech integration becomes more seamless, augmented reality (AR) and virtual reality (VR) will play pivotal roles in transforming retail spaces into immersive environments.