Gamification has quickly become one of the most exciting and effective ways to boost consumer engagement for CPG and retail brands.
Brian Reinhart joins Brad Van Otterloo on this week’s episode of How Convenient for some fun and games! They're sharing gamification strategies
for brands and retailers. Learn how games can help engage consumers, drive store trips and boost sales.
Welcome to How Convenient, a new podcast about the essential role convenience stores play in the busy lives of consumers. Our hope is to equip innovative, C-store leaders as they seek to earn lasting shopper loyalty. Today's 21st episode was recorded on May 25th, 2021. I'm Brad Van Otterloo with Koupon and today I'm fired up to be joined by Brian Reinhart, our VP of Engineering. This is his very first podcast, and I have the feeling that once he's bit by this bug, that he's going to become a regular guest. Welcome Brian.
Brian Reinhart: Hey Brad, glad to be here.
Brad Van Otterloo: Wonderful. As always, we'd love your feedback. We'll let you know how you can share that with us in a few minutes. So, Brian, we've all heard that term gamification and have a general idea of using games to influence behavior overall. So how do you define the term, as well as a little bit more about its history?
Brian Reinhart: Yeah, awesome. So, gamification is definitely something that I'm pretty passionate about. Previously before being at Koupon, I ran a game company and made mobile games and am an avid gamer myself, my wife and I will oftentimes play video games in our free time to unwind. It's definitely something that I'm passionate about and have quite a bit of experience with. I'm sure everybody, unless you've been under a rock for a while, have heard the term gamification and have definitely used gamification in some form or fashion, just by interacting with websites or apps, even retail experiences today, oftentimes will use gamification. It's actually really a lot about psychology and about engaging your users in unique ways. And the psychology behind it is that you're really playing with like powerful human emotions. Humans have the desire to compete. They have the desire to explore, to beat themselves and become better than they were before.
And so using things like awards and progress, even using this most simple gamification out there, which is like a punch card. I'm sure everybody has gotten a punch card where you go to like subway and you get your punch and eventually you get that free sandwich that just tastes even better because it was free and you had to earn it and work for it. So that's what gamification is in the most simple form, is it's using those powerful emotions to gain better loyalty. And retail is in a very powerful place and in a unique place to use gamification. But it's also one of the places where I don't see gamification used as often as it could be. Lots of times you see it in education with giving like accolades and awards for progressing and you see it oftentimes even in like healthcare lots of times the healthcare will you know start to give you benefits or cost savings on your premiums if you can exercise or maybe reach a certain blood pressure. So, it's starting to be used all over the place and there's lots of opportunity in retail for it as well.
Brad Van Otterloo: Yeah, that's awesome Brian and just as we were getting ready for this topic, I was thinking of different examples that we are seeing in day-to-day life that's using gamification. And one that really stuck out to me is around the vaccine. I know in Ohio that if you're getting vaccinated every week, they're giving you a potential to earn a million-dollar prize, or you're basically entered into a lottery just by getting the vaccine. So would you consider that a gamification?
Brian Reinhart: Oh, absolutely. And I think it's a genius application to get people motivated. And honestly, there's little that motivates people more than money...
Brad Van Otterloo: Yeah.
Brian Reinhart: I think it's fantastic. And there's actually some psychology even to failure when it comes to gamification. So, the more you fail, the more it feels good when you actually win, that's like the whole like gambling mentality. You actually released dopamine whenever you reach that reward and it's been proven and there's a lot of research that goes into the more you fail before reaching that reward, the more rewarding it is, and you actually get more of a dopamine released. So that's why you see things like smaller rewards and maybe like a grand prize that you're always constantly working towards. And so, it's actually okay to do gamification, even if there isn't a high value reward for everybody.
Brad Van Otterloo: That's really interesting as well. And I'll tell you, there's a game that my kids use where the game is all about what rewards you're getting. When I watch them play, they're always just getting no reward, no reward, no reward, but every once in a while, they give them one that's a little bit more and it gets them really engaged. I mean, it's a ridiculous game, but it's really funny that seems to use exactly what you just mentioned. So that's really awesome Brian, that's really good overview. So, let's talk more and you said it's not going on as much as it probably should be, but I'd love to hear your thoughts on how retailers and brands are using gamification right now to engage consumers.
Brian Reinhart: Yeah, absolutely. And there's a lot of studies that go on with gamification, just to quote a few. A study that came out from Deloitte showed that the TV show Psych actually saw a 40% increase in website return visits when they introduced gamification. There is a study in 2019 from a company called Talent IMS that showed that almost 80% of employees claimed that they had gained motivation and purpose at the workplace through gamification. And even Forbes came out saying that gamification can increase new user registrations by six times, which is just huge and really kind of shows the opportunity, especially in retail when you're trying to get people into your store, you can do a better job through gamification getting people rewarded the more often they come in through loyalty or through rebate and reward, progress, or even reward tiers. So, touch on a couple of ways that Koupon has used gamification.
And then talk about some examples that I've seen in the real world from other retailers that are doing it pretty successfully. Gamification at Koupon takes a couple of different forms. And I think the most obvious one is our scratcher. We actually did a case study with Kwik Chek. They did a hundred days of the coupon scratcher last summer, and we saw over 120,000 plays. What was really interesting is that we saw on average 10 plays per customer. So that means that these customers were coming back and wanting to play over and over and over again. There were 230% increase in the mobile pay users. So, this was something that they launched recently and saw an increase due to the loyalty that users were coming back to the app. And we saw 50,000 redemptions, which was a 41% increase in the average redemption rate prior to this campaign launching.
So what was really interesting about this Kwik Chek was not just that it was the end consumers that were being gamified through the scratcher, and to give a quick overview of the scratcher it's literally looks like, if you're not familiar with the scratcher technology, it's an offer that hides behind what looks like a lot of scratcher. So, the users will actually use their finger on their app to scratch this and they will reveal an offer. Sometimes the offer is a very high value. Most often it's low value offer, but it keeps users hoping that they get that high value offer so they keep coming back. What was interesting with Kwik Chek is that they actually gamified their employees as well. So they had a store wide competition with their employees that said, “Hey, whoever gets the most scans receives” and I believe it was a monetary reward for the employees at that store.
So it was really twofold and they were engaging the customers, but they were also engaging their employees, which without a doubt influenced the success of this program because these employees are going to be more likely to say, “Hey, there's an offer going on” or to point out the in-store signage, they'd be more willing to help the users if they were having issues with the barcode or scanning anything at the register. So, it was a really interesting case study that was done with Kwik Chek.
So that's, the scratcher. I think another very common gamification is loyalty. I think it's a very basic, more points that you get the more of a reward. And even if it's just a standard, you get points and you can redeem those points for gas, or you can redeem those points for offer. It's a way to engage the consumer and have the consumer be a little bit more loyal because they know that they keep coming back and they're going to get more points.
And we also use kind of that standard punch card. As I mentioned, Subway's a common one, maybe a haircut place. We actually do what's kind of a digital punch card with our rebate and reward progress. So, a user will scan a receipt and they'll receive a punch. and then after a certain number of receipts in offers they've purchased; they will receive the reward at the end. So, it's almost like a digital punch card, we call that our rebate reward progress.
And then finally, you kind of roll your own gamification using segmentation reward tiers. If somebody does something within your app, you can add them to a certain segment to receive maybe additional rewards or achievements. You could actually create a segment as kind of like, oh, you've reached gold tier and maybe after a certain number of redemptions, now that you're in this gold tier, you get better value offers.
And so that's something for a user or an end consumer to challenge themselves to reach that tier. You see that a lot with credit cards and with reward statuses on hotels and it works because people want to be able to say, “Hey, I'm that gold status.” And really, what does it mean? They get to go in the fast lane that maybe you could flash that gold card. It doesn't mean a whole lot to be honest, but it's something that people really value because they did it themselves, they achieved it. And again, it goes back to the psychology of the gamification.
I've seen some really interesting trends in gamification from other retailers. One of the coolest ones that I saw was last year, Keurig Dr. Pepper did a fan-fill, augmented reality game, where you actually look through your phone and if you haven't experienced augmented reality, it's quite a trip.
I would definitely encourage anyone to go out there and try to play with it themselves because this basically transformed your room into a football field. And you can like that halftime game where you pick up the football and you have to throw it into the can. You're literally doing that with your hand motions and throwing a virtual football. As you're looking through your phone, you can see that football spiral through the air and land into the canister, and then you get an offer at the end. If you, I think you had to get a certain number into the barrel before you got the reward in and I'll be honest, I was terrible at it. It took me a couple tries before I got the offer but again, it goes back to that failure. I didn't give up, I went back to it, I did it again. I spent more time engaged with their brand because I failed, but eventually I got that reward and it was very rewarding so it was fun. I don't know if anyone's seen the Snoop Dogg wine, but I actually, I bought the Snoop Dogg wine because it just looked really cool. It's called 19 Crimes and it's got a picture of Snoop Dogg on there. They did something really interesting again, with augmented reality, you download their app and you point it at the label of the wine and Snoop Dogg literally comes to life and starts talking to you. And it's just...
Brad Van Otterloo: Oh, that's cool.
Brian Reinhart: It's really cool to watch. And he says something encouraging, but every bottle, said something different so it encourages you to collect more bottles of this wine. And I experienced all of the wisdom that Snoop Dogg has to give to you. I could go on and on from Seven 11 to Victoria Secret. Victoria Secret actually created an app called PINK Nation that is all about gamification. It's like a gamified app in itself. You can dress up, do different styles, unlock badges and progress, and you can eventually, or could potentially win tickets even to a Victoria Secret fashion show. So definitely high value rewards in there, but just the fact of using the app to get badges and to play around with some of the clothes in a game fashion has been really successful for them.
Brad Van Otterloo: That's awesome, and Brian one of the things you talked about lives around loyalty and loyalty programs. So, on earlier in other podcasts, we've discussed the challenges of building a loyalty program, right? That it's not go purchase a loyalty program and then the customers are just magically going to start signing up and going to become loyal. It's really, that's just step one is implementing the loyalty program. The more important step is to make sure you're constantly having a funnel of new customers getting into that program. So being able to utilize gamification is a very, very good way to do that because everything is based around habits. And if you're in a loyalty program and you're looking on your phone to see what offers or what's available for a retail location, you need to be able to have a way to build that habit. And I think gamification has shown a very good way of doing that. When you don't always know what offers are going to be there, but you're always going to get something that's great.
If there's a way you can do, like you mentioned the digital punch card, then that's really valuable. And one of the really most powerful things about a digital punch card is not to get that fifth purchase, but to get that fifth purchase in a short period of time, right? It's to try to make it so that you have in time limit as to how long it can be and then that's just helping you as a retailer, have more velocity inside of your store. So, there's just a lot of examples around how gamification will help you get people engaged, which is really important as we want to engage with customers more digitally and more inside of a mobile app and on the phone. Those examples you just mentioned can be a really key way to go about doing it. And one last thing I'd say here too, is CPGs have games and have resources available in things that they've built, that they want to be able to put into the hands of retailers to be able to utilize. So I think it's really important as a retailer to make sure you're always working with your CPG partners to see if there are any sort of gamification, out-of-the box things they've done. Like you mentioned with KDP, like to be able to maybe repurpose some of that stuff and be able to put it into the hands of a retailer can only help them get more of those digitally engaged consumers. So that's really awesome, Brian, in terms of that overview.
So now it always seems like this is the most exciting question that you ask, which is what's coming next? What does the future look like? I'm sure we're just scratching the surface of what gamification is. We probably can go back and even talk about what the beginning of it is, and maybe we're in inning two or inning three, of a full game in terms of what it could be so I'd love to hear from you what you think could be coming next.
Brian Reinhart: It's really exciting to dream about what the future of gamification is because it's only going to be a growing industry. And there's a lot of analysts who are trying to estimate, oh, it's becoming 10, 20, 50-million-dollar industry with gamification. I mean what I see the trends are one, we're going to be gamifying, everything. It's just going to be flat out everyone's going to be on loyalty. Everyone's going to be trying to engage their users in more unique ways, so I see the future definitely heading towards just more broad gamification, but as far as the technologies behind it, I really see augmented reality and virtual reality growing in this space. Especially in retail, I'm using the labels like the 19 Crimes wine, just a genius idea. Being able to walk into your C-store and open up an app and be able to look at labels on bottles and get something out of it immediately is going to be really engaging to the consumers.
Being able to potentially use your phone, to guide you through the store, to collect badges and logging time. Every time you're in the store, you get something out of it so using either beacons, Bluetooth technology, location, and Geo fences, to be able to track that and being able to use in-store signage, all of this in an augmented way is going to be the future.
And then I'd also say social, social is always growing and growing. And I think right now there's a lot of volatility I'd say in social, but I think that it's definitely going to be one of the next big parts of gamification as well. And right now, you see a lot of gamifications being you alone, solo trying to accomplish this game, but there might be a lot of like sharing the game with other people or using teamwork to accomplish a goal. So, this kind of using social to accomplish your goals is just going to become more useful in retail. And especially, as you brought up with gamification, you're going to be engaging your current customers. It's still hard to get new customers and gamification doesn't help a whole lot there. It's really great at keeping your customers loyal. But when it comes to reaching new customers, that's where using the social context of gaming is going to come in to help bring other people in with you.
Brad Van Otterloo: Totally, and there's two things I point out there. One, you mentioned that it's harder to bring in new customers, but like you had with your Kwik Chek example, if you get your associates involved and you're getting them gaming, man, they're really going to help bring more customers in because I really believe in that example, those Kwik Chek associates are the ones that really help drive larger participation because of how that all worked. And I think that's super powerful. And then second being able to say, you're an emerging brand. And when you're engaging with people digitally, it's sometimes hard to break out from the crowd, right? If you love a certain brand of candy and you're looking in your app, you're always looking for that brand of candy, but being able to have some sort of gamification that can introduce you to a new emerging brand, I think is a really powerful thing that's going to happen in the future around all of these new brands that are coming into the market and really looking for ways to stand out from the crowd. And I think that's a really good way to do that.
Brian Reinhart: Yeah, because I think some people think that gamification is only gimmicky, which is absolutely not there's real psychology behind gamification, but it can be gimmicky and that gimmicky-ness of it is really valuable as well because people are going to see that and be like, that's really cool and they're going to want to try it out. So, there is benefit to being gimmicky, to doing something unique, the advertising around the gamification, to be able to say, “hey, look at this really cool thing that we're doing” is great for getting new customers you're exactly right.
Brad Van Otterloo: Brian, that was wonderful. Thank you so much for spending the time to share this with us. Gamification is a very interesting topic and as we continue to grow this podcast, having a little bit more interest or having different topics, this's going to be very valuable. So, thank you all for listening to How Convenient and as we mentioned at the beginning, we want to hear from you. You can reach us at Koupon.com. Don't forget to subscribe and review us, and you can find more insights at blog.koupon.com. Thank you very much. And just to finish out, Brian, what is one of the words of wisdom directly from Snoop Dogg and 19 Crimes?
Brian Reinhart: Oh my gosh, you put me on the spot. I actually can't think of them. I saw a couple of them.
Brad Van Otterloo: All I know is any messages from Snoop Dogg are very powerful.
Brian Reinhart: They absolutely are and I actually have a bottle of it on my counter at home and then I'm gonna have to have to go back home and replay it because you just can't have enough.
Brad Van Otterloo: Awesome, thank you very much.
Brian Reinhart: Thanks Brad.