Exploring the Transition, Challenges, and Impact of Loyalty Programs on Pharmacy Retail

Abstract

This thesis addresses the transition from traditional loyalty programs (LP) to modern digitalized loyalty programs in the Austrian pharmacy sector. Loyalty programs have long served as a tool to retain customers but the growing digitalization of retail practices has driven towards app-based solutions. It further explores the technological and operational challenges that arise while implementing such programs. While existing research focused on the general role and effectiveness of loyalty programs across various industries, little research has been conducted on the pharmacy sector, specifically on the transition from traditional to digitalized LP. The Following research questions will be answered: 1. What are the measurable differences in customer engagement and retention rates between traditional and digitalized LPs in pharmacies? 2. What are the primary technological and operational challenges pharmacies face during the transition from traditional to digitalized LPs, and how can they be effectively addressed? 3. How does the implementation of online LPs impact pharmacy sales growth and key customer retention? This study uses qualitative semi-structured interviews with seven pharmacy professionals and one industry expert. The research shows that digital loyalty programs can improve interaction. However, effectiveness depends on customer types, such as regular customers who show a higher engagement than walk-in customer. Technological and operational challenges such as QR-code issues, staff involvement and data protection were among the key challenges. Most pharmacies struggle to track key performance indicators and find it difficult to directly link loyalty programs to revenue growth. Despite the limitations the overall perception of digital programs was positive, especially for customer retention. There are, however, several limitations. It is based on a small non-random sample as well as the perspective of the LP provider is not covered. Future research may expand the sample size, include the customers perspective of the loyalty programs or include multiple countries. The thesis ends with practical recommendations for pharmacists.

Date of Award	2025
Original language	English
Supervisor	Robert Füreder (Supervisor)