What is the competitive advantage of Shopkicks

Mobile loyalty

The term mobile loyalty (German: mobile loyalty) describes loyalty programs on mobile devices that serve to ensure long-term customer loyalty. Such programs are offered as part of mobile commerce, mobile shopping and mobile payment in order to offer customers an additional purchase incentive and to retain them in the company in the future.

General information on the topic [edit]

Mobile loyalty programs are a further development of conventional loyalty programs. Think of discount cards for regular customers or gifts when you make a new purchase. The principle: Customers are rewarded for their loyalty and receive special discounts, vouchers, coupons or benefits from cooperating companies. This is intended to increase customer satisfaction and improve customer loyalty. Last but not least, sales should be increased through the sale of products. The best known example in Germany is Payback.

The goals are similar for mobile loyalty. The difference is that customers have the loyalty program with them on their smartphone - in the form of an app. You don't need to have discount codes or cards with you. As soon as you go to a shop with your smartphone and buy something there, you can register this on the device using a corresponding app. For example, by making the purchase through the mobile payment system that you are using. The app credits the digital loyalty points and when you reach a predetermined number of points you receive a reward.

The reward comes after the purchase. That is why mobile loyalty must be differentiated from mobile couponing, where customers are given discounts before making a purchase. Another special feature of mobile loyalty is that the providers of such programs receive various information and data about customers and their purchasing behavior. The mobile device sends data on preferences, buying behavior, amounts, the place of purchase and the contextual relevance to the provider. This can use the data to design the marketing 'data-driven' and to align the targeting.

How mobile loyalty works

With mobile loyalty, either two companies can cooperate in order to offer their customers something in return. As is the case with banks and airlines, for example. Or a company uses a mobile payment app that is linked to a loyalty system. Examples of this are Shopkick, Pirq, Belly or Beacon. However, customers are still hesitant to use the new possibilities of mobile payment. Only around half of smartphone users in the UK see added value.[1] There is likely to be a similar skepticism in Germany. Only in the USA are mobile payment and reward models on the rise.

Most mobile loyalty apps work with the available technologies such as geo-based services, NFC and QR codes. The customer selects a product, scans the QR code on the label and can then pay by smartphone - while the digital loyalty points are credited to their customer account or the payment app. Beacon takes the next possible step by using location-based data to make special offers to customers - tailored to the location where they are. With systems such as NFC, payment processes are also possible that only require a swiping gesture or proximity to a terminal. This in turn requires a corresponding infrastructure, which is still missing in many areas.

Advantages of mobile loyalty [edit]

Nevertheless, providers enjoy some advantages when they implement a mobile loyalty program:[2]

  • Increase in sales to new and regular customers
  • Unique selling proposition with regard to the competition
  • Cost savings compared to conventional loyalty programs (hardly any operational costs for organization and administration)
  • Improved customer service at the point of sale (POS)
  • Valuable data for marketing and sales - young, tech-savvy target groups in particular can be reached.

The technical possibilities are also interesting:[3]

  • Mobile notifications: Customers receive status updates on the loyalty program.
  • Integration of mobile wallets: Services such as Passbook, Google Wallet or PayPal can be connected to the program.
  • Personalized advertisements and messages: Push messages can be sent at different points in the purchase process to encourage customers to complete a purchase.
  • Augmented Reality: Geo-based services and NFC combine online and offline user experiences.
  • Social functions: APIs from Facebook, Twitter, Instagram or other social networks can be integrated so that customers can share program progress. In this way, new customers can also be won.

Importance for social media marketing

Mobile loyalty programs are still in their infancy in Germany. Many people use the smartphone to compare prices or to get information, but mobile payment has not yet caught on. With certain target groups, such as young smartphone users up to 25 or so-called millennials, things look different again. It can be a decisive disadvantage here if the possibilities of mobile marketing are not exhausted. In this context, the options of mobile loyalty can mean a competitive advantage.[4]

However, such programs should also be implemented with the necessary caution. Because millennials are also interested in protecting their data and making decisions themselves. Mobile loyalty should therefore be an option and not an obligation when customers shop. Programs should complement the shopping experience and communication should be transparent and honest. The benefits and obligations of programs should be clearly communicated so as not to discourage certain target groups from the outset. This of course includes the handling of user data. These have to be anonymized and at the same time it is about building a personal relationship with the customer - a tightrope walk.[5]

References Edit]

  1. ↑ Are smartphone innovations in retail really important for users? mobile-zeitgeist.com. Retrieved on September 8, 2015
  2. ^ 'Mobile Wallets,' the Future of Loyalty Marketing Programs entrepreneur.com. Retrieved on September 8, 2015
  3. ↑ What is driving mobile loyalty? mobilecommercedaily.com. Retrieved on September 8, 2015
  4. ↑ Why a mobile loyalty program is imperative when selling to millennials mobilecommercedaily.com. Retrieved on September 8, 2015
  5. ^ Mobile Is Shaking Up Traditional Loyalty Marketing Programs adage.com. Retrieved on September 8, 2015

Web links [edit]