09 Feb 2016
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Loyalty cards go mobile, according to new research

By Shannon Williams

New research has found that brands and retailers are increasingly responding to consumer demand for mobile integration, with new figures showing more than three billion loyalty cards will operate as mobile-only or be integrated into mobile apps by 2020, up from 1.4 billion last year.

The new figures, from Juniper Research’s Mobile & Online Coupons: Redemption, Loyalty & Consumer Engagement 2015-2020, found that many retailers are now offering customers the opportunity to store their loyalty cards within a dedicated digital wallet.

“Crucially, the research argued that the improved targeting and personalisation made possible by digital coupons was leading to greater activity rates, thereby resolving a key failing of traditional schemes where the lack of relevant offers had resulted in a downturn in usage,” Juniper Research explains.

However, the new research found wide variations amongst retailers and other reward card providers with regard to the extent of digital loyalty integration. In the UK, it observed that around 40% of Nectar Card holders had acquired the loyalty app by late-2015, but less than 4% of Tesco Clubcard holders. It found a similar disparity between US retailers Walgreens, where 61% of cardholders had linked their card to an app, and Target which had only 27% of cardholders linked.

“These disparities are likely to result from a number of factors,” says research author Dr Windsor Holden. “ While in part they may reflect the level of satisfaction with the app and, or the features it offers, they may also be attributable to a greater degree – or greater success – of retailer marketing of their digital loyalty options.”

According to Holden, the research warned that retailers that did not offer mobile integration were likely to have far lower levels of visibility on consumer activity. 

As a result, it cautioned that they would be at a disadvantage when seeking to tailor offers and thereby increase the lifetime value of the consumer.

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