Last month, it was reported that Walmart Stores Inc. and Target Corp., along with about two dozen other retailers, are at work on a mobile payments system. That’s the sort of thing those of us in the customer loyalty industry pay attention to.
Mobile payment is a channel that’s not only immediate and intimate, but that also opens up huge loyalty opportunities for companies that do it right. A move by two giants such as Walmart and Target will surely hasten some of the trends predicted for years, expediting customer adoption in a way that will ripple through the loyalty industry and drive more marketers to develop loyalty offerings that provide instantaneous benefits and recognition.
The draw and attractions are straightforward. For consumers, mobile payments create a less-harried checkout experience and easier expense tracking. For retailers, they provide the economics of increased operational efficiencies and interchange costs.
But we see opportunities well beyond increasing checkout efficiency.
Mobile technologies offer myriad roles for loyalty marketers. The loyalty roles for smartphones include:
- Membership ID that replaces the traditional card or keychain tag.
- Points redeemer, an instant program update channel with news and “close to” reward announcements.
- High-impact communications device for location-specific services.
- Delivery channel for rewards from coupons to games to events to content.
- Replacement for cards and cash, of course.
The loyalty challenge is making the channel relevant enough that people overcome their bias about receiving promotional and loyalty messaging within it. A 2011 Cross-Cultural Study by COLLOQUY, a LoyaltyOne research group, showed that while 65 percent of U.S. consumers prefer to receive permission-based promotional messages via email, only 4 percent preferred text messages. Those numbers should start changing as more people get email through their smartphones, making the two channels more fluid. Loyalty marketers absolutely can help shift this preference, but the value has to be there. And that means engaging customers with loyalty, experience and service messaging as a gateway to open the channel wider for promotional messages.