Location-based marketing in SAP hybris Loyalty
SAP has been busy adding new capabilities into their microservices-based loyalty solution SAP Hybris Marketing Loyalty. In this article, I will describe a simple use case illustrating the new geomarketing features introduced in version 1602. For a general introduction into Hybris Loyalty have a look at my previous post.
Hybris Loyalty now allows organizations to create offers for members in specific target groups (e.g., all loyalty program members that have reached at least Silver tier). These offers represent virtual coupons that entitle the customer to fixed or percentage discounts for their next purchase. Offers are time-bound and can be limited to a certain number of uses to support scenarios where, e.g., only the first 1,000 customers get the deal. In addition to simply sending out offers via email (e.g., when a customer signs up or reaches a higher loyalty program tier), Hybris Loyalty also supports geofences and iBeacons to tie an offer to a physical location - for instance, a retail store. Once the customer enters the specified area, a mobile app on their smartphone can pop up a notification with the offer, which will hopefully prompt them to make a purchase.
To use the geofencing capabilities provided by Hybris Loyalty, it is recommended to create a dedicated application on YaaS that will act as the endpoint for the mobile shopping app. Using a separate application allows to:
- assign the relevant scopes - and only those - that are required to access the Offers and Geofences services in the Loyalty Package;
- use the application-specific client id and the secret to call the corresponding microservices from the mobile app.
To demonstrate the use case for this blog, I have developed a simple Android app that first calls the YaaS tenant (i.e., the application endpoint) to fetch all the configured geofences. The app then leverages the Google Play Services for monitoring the user's current location. Once the user enters a location that lies within one of the geofences, Google Services notifies the app which then searches for offers configured on Hybris Loyalty that may be associated with this geofence location. If offers are found, their details are retrieved and presented to the user in form of a digital coupon.
The resulting conceptual architecture is shown in the following diagram:
Configuring the Scenario
Instead of simulating a fictitious retail chain, the use case for this blog is a geofence defined around the FAIR Consulting Group office in Sydney. If a customer comes within 100 metres of the office, they will get an offer for one hour of free consulting on innovative Customer Experience Management. 🙂
Geofences can be easily configured using the Loyalty Package in YaaS by defining the location, the radius of the geofence, and the type of transition (enter or exit) which should cause an event to be triggered.
An offer is equally easy to create by specifying the relevant coupon details and eligible target groups. These are then linked to the previously configured geofence location by simply enabling the geomarketing feature and adding the geofence to the offer as explained here.
The Loyalty App in Action
Details of the offer are then displayed to the user as a digital coupon. Hybris Loyalty allows to adjust the visual representation of these coupons and also offers an integration into Apple Wallet (formerly known as Passbook) as well as Google Wallet. In a real-world scenario, the QR code could be scanned at the checkout to apply the discount.
Even though Hybris Loyalty was only introduced last year, SAP has already added many innovative features to the solution that facilitate modern customer engagement across physical and digital channels. The new geomarketing features, in particular, have the potential to extend traditional transaction-based loyalty management approaches into the physical world and increase foot traffic and purchase volumes. In a time where many customers use retail stores predominantly for showrooming, a well-timed offer can provide the necessary stimulus to complete the purchase.
In addition, geomarketing has the potential to add location-based insights to the customer profile. Getting users to disclose their physical location is often a balancing act between offering a great user experience and respecting the customer’s privacy. However, the possibility to get exclusive discounts or earn loyalty points can be a strong incentive for customers to share their location data with a shopping or loyalty management app.
The use case described in this blog was fairly straightforward but plenty of more involved applications of location-based loyalty management come to mind:
- Treasure hunts within or across stores (via iBeacons or geofences, respectively) rewarding loyal customers with additional discounts or special offers for every location they unlock;
- Analytics uncovering the favourite stores (or locations within a store) of customers with a high lifetime value;
- Special VIP treatment offers for platinum tier members such as being able to jump the queue at a box office or general admission;
- Special discounted offers to purchase lounge access for Silver tier members when they arrive at the airport.
At this stage, there are a number of missing features and functionality gaps in the Hybris Loyalty solution (for instance, the definition of discounts in offers is still fairly basic), but future releases will certainly bring improvements as well as better integration into other parts of the SAP Hybris suite of solutions. Version 1605 has just been released and introduces, among other enhancements, a better integration into SAP Hybris Marketing.