As the retail landscape has become increasingly digital, gamification has evolved from a cool trend to a proven strategy. In fact, a 2023 report estimated the size of the gamification market as more than $10 billion, with the retail industry accounting for nearly a third of that market. It’s clear: Gamification is redefining how retailers engage with customers by making every interaction fun and rewarding.
As a sophisticated layer to your existing engagement efforts, gamification should personify the core elements of your loyalty program to drive key behaviors. Adding elements like digital punch cards or social media challenges not only incentivizes purchases, but also encourages ongoing engagement.
A great example of this approach is Sephora’s Beauty Insider program. By integrating points and badges for various activities, Sephora employs a simple and effective tactic that appeals to consumers across all levels of tech-savviness. It’s about enhancing — not overshadowing — the foundational loyalty strategies you already have in place.
However, brands don’t always hit the mark when it comes to gamification — implementing overly complex or confusing activities, shoehorning in games that interrupt the natural shopping flow or allotting rewards that are too out of reach for a casual consumer — are just a few examples of poor integration. To avoid these traps, brands must prioritize a straightforward, transparent and authentic strategy.
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Know Your Audience
It’s crucial to tailor your gamification elements to the specific preferences and behaviors of your target demographics. Are your customers tech-savvy millennials? Then they might be thrilled by AR experiences or competitive social leaderboards. Gucci’s Good Game is an example of how technology can help bridge the gap between fashion and recreation to reach a younger audience fluent in avatars and NFTs. But if your consumers are less interested in crossing that bridge, then lower-lift tactics like spinning a discount wheel might resonate better.
Focus on Value and Relevance
More than ever, consumers are seeking relevance and value on the path to purchase. When engagement is tailored to the consumer’s wants, needs and behaviors, each interaction builds an emotional connection to the brand that creates valuable capital toward a long-term loyal relationship. These principles extend to gamification, too – allowing consumers to choose both the games they play and also the rewards they redeem drives sticky behavior that encourages repeat engagement. Flexibility and choice in gamification design are crucial to provide the seamless, valuable and tailored experience consumers expect.
Measure, Analyze and Scale
Testing and learning at a small scale can help you figure out what works and what doesn’t. With simple A/B tests, brands can try a variety of tactics, gain insight into how they perform across demographics and shopper profiles, and then make data-informed decisions to optimize from there. And once you know how you should optimize, AI can help you scale those tactics for success.
With a guiding human hand, AI and machine learning can help transform data into actionable insights, helping brands understand which promotions or rewards most effectively drive engagement and motivate consumers. These technologies allow you to track the effectiveness of different gamification features and adjust your tactics in real time, ensuring that your approach remains dynamic and responsive to customer preferences.
Gamification is the Spice in Your Loyalty Strategy
As competition increases, embracing innovative strategies like gamification can provide a significant edge. When integrated thoughtfully, gamification does more than entertain — it enriches the consumer’s journey, making each interaction more memorable and rewarding. By embedding gamification thoughtfully within your broader marketing framework, you can elevate customer engagement, enhance loyalty and drive your brand toward greater success.
So, are you ready to play the gamification game to level up your ecommerce strategy?
Kyle Clark is an SVP, Merchant Loyalty at Mastercard. Since joining Mastercard in 2013, Clark has driven consumer loyalty innovation including the launch of the award-winning Pay with Rewards Product. Clark has 15+ years of experience in the loyalty industry, ranging from product strategy to software development. Prior to joining Mastercard, Clark was with gamification startup Bunchball, where he managed client technical services and implementations for consumer brands. Clark holds an MBA and Masters in international business from St. Louis University and a bachelor’s in computer science from Southeast Missouri State University.
