Why Gamification for Retail is a Powerful Tool for Connecting with Millennials

By: Anand Shaw, Cofounder, Inventrik Pte Ltd

Anand Shaw, Cofounder, Inventrik Pte Ltd

In the age of smart-phones, social media and connected devices; keeping millennials engaged has become more difficult than ever before, especially for retailers. Our increasingly digitalized lifestyle means that we have more information available to us than ever before, with more ways than ever to access it. According to a study by Microsoft Corp., the average human attention span is only 8 seconds, and it isn’t increasing anytime soon. So as our attention span decreases to that of a goldfish, how can retailers get cut-through to keep millennials engaged and build customer loyalty? Enter gamification for retail.

What is gamification?

Gamification is the use of game elements within a non-gaming environment to influence behaviour and increase engagement. Let me be clear on what a “non-gaming environment” means. Playing candy crush on your phone is NOT gamification, that’s simply you playing a game. It’s only classified as gamification when used OUTSIDE a gaming environment. For example, online retailer Sephora uses a points based loyalty system to reward customers for repeated purchases. Sephora offers customers more points for each purchase, enabling consumers to reach higher levels and receive more perks. This is a great example of using the engaging traits of games outside of a traditional gaming environment to connect with consumers.

Why gamification is so effective in retail.

Gamification has been shown to be most successful in highly competitive industries where organisations need to differentiate themselves. Retail is a good example where competition is fierce, cut-through is difficult and anything that can be used to stimulate consumer behaviour should be welcomed with open arms. Retailers can use gamification to reward customers and keep them engaged through gamification tools such as discounts, coupons, promotions and even referral rewards.

Gamification for retail is a marketing strategy increasing in prominence in the industry. A study by Boston Retail Partners showed that almost nine out of ten retailers will use gamification in their marketing strategy by 2020. Amazon is a great example of a retail company that used gamification to improve engagement through it’s ‘Amazon’s Top Reviewers’ program, which rewards customers for good quality reviews. If the world’s largest online retailer thinks that gamification is a great engagement strategy, then it’s a sign that the rest of the retail world should stop and listen.

Why is gamification so important when engaging millennials?

Millennials are the first truly digital generation. They are digitally-savvy, born multitaskers and they are not fazed by new technology. More importantly they are a generation used to instant gratification thanks to Netflix, Spotify and even same day Amazon delivery. The desired outcomes of gamification play perfectly into these generational traits that are inherent in millennials. This is supported by Deloitte’s 2017 Australian Mobile Consumer Survey, which showed that millennials are more likely to engage with brands if they have a loyalty app, a very effective gamification technique. This is great news for retail outlets looking to increase engagement with millennials through digital channels.

Gamification also plays into the desire of millennials for instant gratification, e.g. get them to perform an action to unlock a new item and rewarded them instantly. Retailers can use strategies such as this to generate intrinsic motivation through competition and curiosity to attract millennials and keep them further engaged. Let’s look at a couple of examples in more detail.

Rewards Program

We all love to be praised and given a pat on the back, and gamification feeds right into this. When we make a purchase we already feel a sense of reward as we leave the shop with a “gift” i.e. our purchase. Retailers can take this even further with a loyalty program that encourages consumers to perform an action or overcome a challenge to reach a milestone. The competitive nature within us makes us want to engage and “win” the game. A common example of this is through a loyalty points program that encourages consumers to make purchases, earn points and unlock rewards. It can make us feel exclusive, special and more importantly forces us to engage.

Mobile Game

Given that millennials are tech-savvy by nature, mobile gamification is the perfect way to engage them. Majority of them have smart phones and use apps as part of their day to day lives. If done correctly it can appeal to our desire for achievement and competition. A great example of this is Woot, a retail app that offers consumers a limited quantity of items each day with new products unveiled at midnight. This builds a sense of curiosity and competition with consumers wanting to outdo each other to buy rare items at great prices.

What about brick and mortar retail stores?

Traditional brick and mortar retail stores can also use gamification to improve the shopper experience and better engage with millennials. While online shopping has negatively impacted sales in traditional retail stores, offline-gamification provides them an outlet to re-engage with tech-savvy millennials.

Shoe retailer Stride Rite embraced in-store gamification by leveraging digital screens and augmented reality in its stores. Shoppers could try on shoes and then perform dance moves that would appear on screens in the store. Each shopper would then receive a score based on their performance that could be shared online. This example plays into the human desire to win and be rewarded for our performance. Similar digital technologies such as augmented reality is only going to increase the ways brick and mortar stores can use gamification to engage customers.

Final Thoughts

As technology continues to play an increased role in our shopping experience, the use of gamification to engage millennials is only going to increase in prominence. To connect with digital-savvy millennials, gamification provides a powerful way to connect, engage and eventually convert to a sale. Gamification plays into our natural competitiveness and our innate desire to be rewarded. Whether this is through loyalty programs, mobile apps or even in-store strategies, gamification provides a way for retailers to cut-through the noise of our digital society and build lasting relationships with millennials.