Mobile loyalty cards to reach 3 billion by 2020; doubling over five years

The improved targeting and personalisation made possible by digital coupons is leading to greater activity rates, according to Juniper Research

Cards linked to mobile apps experience rise in activity rates 

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8 February 2016 | 0

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More than 3 billion loyalty cards will operate as mobile-only or be integrated into mobile apps by 2020, up from 1.4 billion last year, a new study from Juniper Research has shown.

The new research entitled ‘Mobile & Online Coupons: Redemption, Loyalty & Consumer Engagement 2015-2020’, found that brands and retailers are increasingly responding to consumer demand for mobile integration, with many 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.

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 card holders had linked their card to an app, and Target which had only 27% of cardholders linked.

Research author Dr Windsor Holden attributed these disparities to a number of likely factors. They could “reflect the level of satisfaction with the app and, or the features it offers” as well as being impacted by the success of a retailer’s marketing of its digital loyalty options.

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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