Retailers Need More Than Fun When It Comes to Gamification

Consumers have been exposed to games when they shop for decades. As far back as 1896, grocers distributed Green Stamps that were collected to earn shopping rewards. How many times as a kid did you open a box of Cracker Jacks to find a small toy tucked inside? Even the cereal box tops that kids sent off to Battle Creek, Michigan, for a “free gift” were early examples in gamification.

I recently completed an online course through the University of Pennsylvania’s Wharton School on gamification, specifically how game design can be applied in a business context to engage new consumers and create a more compelling customer experience in the retail environment. What I learned was that these consumer games have become far more complex than at any time in the past. They rely on a basic understanding of human psychology to inspire and motivate consumer shopping behaviors. Understanding these triggers, and having a clear plan of the impact these behaviors can have on a business plan is quite a powerful thing.

Our professor, Dr. Kevin Werbach introduced a six-step gamification design framework, which helps to identify the essential elements of the concept and the outcomes that they help to generate. Let me share some of the material from his course and add some examples from the current landscape to help illustrate his ideas.

Define your business objectives. Why are you gamifying? How do you hope to benefit your business, or achieve some other goal such as motivating people to change their behavior? These motivations could include the engagement of new customers to gain market share. It could also be something that encourages a larger basket size or an upsell to drive a higher gross profit. It’s hard to imagine Coca-Cola needing more consumers, but its My Coke Rewards program has to be one of the best examples of a consumer packaged goods company that uses the concepts of gamification to engage consumers and promote their brand.

Delineate target behaviors. What do you want your players to do? And what are the metrics that will allow you to measure them? These behaviors should promote your business objectives, although the relationship may be indirect. For example, your business goal might be to increase sales, but your target behavior could be for visitors to spend more time on your website. As you describe the behaviors, be sure to explain how they will help your system achieve its objectives. The metrics should in some fashion provide feedback to the players, letting them know when they are successfully engaging in the intended behaviors. Foursquare is an excellent example of this with the tokens that you collect and the competition to become the “Mayor” of your favorite spot.

Describe and identify your players. Who are the people who will be participating in your gamified activity? What is their relationship to you? For example, are they prospective customers, employees at your organization, or some other community? And what are they like?  You need to understand what sorts of game elements and other structures are likely to be effective for this population.

For example, you might discuss whether a more competitive or cooperative system would be better for this player community. This concept can even be applied to engage employees in desired activities like developing a higher level of product knowledge to support questions fielded from customers. Even the US government is using the concept of gamification to engage its employees and help its agencies deliver a better customer experience.

Devise your activity loops. Explore in greater detail how you will motivate your players using engagement and progression loops. First, describe the kinds of feedback your system will offer the players to encourage further action, and explain how this feedback will work to motivate the player. One type of activity loop is to simply engage customers. Another may be to encourage return visits. Here’s Dr. Werback describing some of the concepts during a recent class.

Don’t forget the fun. Although more abstract than some of the other elements, ensuring that your gamified system is fun remains as important as the game design. Frito-Lay came up with an entertaining use of augmented reality to promote Pringles in China.

Deploy the appropriate tools. You might decide the gamified system is to be experienced primarily on personal computers, mobile devices, or some other platform. You might also describe what feedback, rewards, and other reinforcements the players could receive. Finally, think about whether you’ve tied your decisions back to the other five steps in the process, especially the business objectives.

Is all of this just a fad? I think we’re hearing a lot about this now because our technology is offering news ways to implement the concept. Overall, the principles are based on human desires to compete, collect, and engage in play. Those things aren’t going to change, just the method of delivery.

Dave Rodgerson is the senior managing consultant for IBM’s Retail Strategy & Transformation practice.




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