Tag Archives: loyalty

2011.25 | Trade Privacy for Convenience

All retailers want to understand their customer better to sell more stuff.  In order to gain an understanding data must be gathered to build customer profiles.  Loyalty or member based card programs were instituted to gather data.  Consumers were and are willing to give up some privacy in return for a reduced price or special offers.  As technology has matured and become ubiquitous, privacy has become more precious to some.  Pricing has become increasingly competitive, and one can only discount so much.

One strategy for driving loyalty and gathering data is by offering convenience in return for taking part in a loyalty program.  One relevant current example is Starbucks’ mobile payment which is available to customers with a registered Starbucks card, and nobody else.  While there are benefits like a free shot of syrup and a free birthday beverage, these are standard items.  More exciting to customers is being able to pay quickly and simply every day, and it can only by done by registered customers.   What if we were to take this registered user benefit further?  Some examples:

  • A customer has coupons and offers tied directly to their card.  The customer only requires a reminder to buy the product to obtain the offer.  No need for customers to clip coupons or remember to bring them along.  When the loyalty card is scanned, and then a product is scanned, the customer gets the special price automatically.  With newer software solutions, this connectivity to the card can get granular enough that individual prices can be offered to individual segments or even individual customers if retailers wish to do so.  Not having to remember pieces of paper in the digital age is a benefit to consumers, and obtaining unexpected offers breeds loyalty.
  • Price guarantees are often provided over a certain time period.  In the online world, pre-orders have price guarantees that are provided automatically.  Why should customers have to go back to stores to ask for their credit?  Why not allow loyalty card holders or high value clients automatic refunds for price guarantees?  While it’s not practical for grocery, it can be done for general merchandise, fashion, and any large ticket items.  While it sounds counter-intuitive to give funds back, it is currently rare enough that it will drive confidence in a retailer to encourage return business on profitable large ticket items.
  • Loyalty customers could be eligible to receive e-receipts.  Retailers like Old Navy and Sears already provide such platforms, however there are some potential holes in the solution as it exists today.  First, if a customer has to provide an email address, there is always a chance that the receipt could go to the wrong place, and the customer will not have a receipt – a potential problem for both parties.  Second, providing e-mail addresses will soon start to slow down the check-out process.  Using a loyalty card or even an account number attached to the card will provide a quicker checkout experience and a database for the receipts.  Apple Stores already effectively do this using a customer’s Apple ID for the transaction based on the customer’s credit card swipe.
  • If a customer leaves an item behind at POS or Self-checkout, they can automatically receive an SMS message to ensure that they have all of their items with them.  This could be triggered by a button on the POS linked to the customer’s loyalty card which has the customer’s mobile number.  If the customer registers their mobile with the loyalty program, when they cash out, the cashier could have a button on their screen that allows them to SMS previous customers a standard message indicating that they should ensure that they did not leave anything behind.
Privacy for lower prices is common enough in the retail landscape.  There are many more creative outlets possible given all of the details in today’s technology.  Sooner or later, a savvy retailer will cash in on these potential differentiators.  These benefits are still novel today, and can win an audience accustomed to convenience and novelty.  Best of all, it uses technology in a way consumers love – in a manner that is ideally transparent to the user.

2010.25 | Contactless Transit in NYC | Walmart Loyalty | Mobile Movie Marketing

Contactless Transit - While contactless has lots of benefits, it sure seems to have problems with customer usage.  NYC has the contactless credit card option on the turnstiles as part of a 6 month trial, and while the benefits seem obvious, there are few takers according to this NYT video. Why would consumners opt to go to a vending machine, charge a declining balance card, and then use that card to pay for their ride? Consider the benefits to users:

  • One card will do where two were once needed – no need for separate Metro Card
  • No need to recharge a card at a Metrocard Vending Machine = no waiting and reduced time spent on purchase
  • The turnstile opens and closes just as quickly
  • No need for an advance outlay of funds
  • No more lost coins or cash jingling in your pockets – though the cash option may be what drives the recharging of cards depending on your population.

Yet still little usage based on their informal survey in the subway.  Most likely problem: they’ve not been advertising it strongly enough in person as part of this trial.  For self service to succeed someone at the site needs to be there telling New Yorkers why this is a benefit.  Technology isn’t enough on its own.  The general population needs to be shown, shown again, and then shown another time – highlighting the benefits in a brief, clear manner. 

Walmart Loyalty - While a perennial holdout in the many loyalty schemes available here in Canada, Walmart Canada will be offering loyalty points on their new credit card to be released as part of their newly chartered bank.  This should shake things up a bit.

Mobile Movie Marketing - As part of the upcoming release of the Steve Carell motion picture Despicable Me,  the Best Buy Movie Mode mobile app will translate the nonsense jabber of little characters called minions during the end credits of the movie while users are in the theatre.  This idea certainly provides an interesting cross pollination for retailers like Best Buy to the movies, and we can certainly expect them to extend it to other films.  Now we will have public service announcements at the end of the movie to remind us to turn ON our mobile.  Like that was necessary.

2009.36 | Changing Approaches

The Fitting Room - LA retailer Metro Park is using the fitting room as a point of differentiation, making a potentially painful interaction- trying on a new garment – something that makes customers feel special. To take this a customer experience enhancment further, St Clair Interactive has a solution that allows retailers to understand what customers didn’t buy. Items are scanned prior to entering the fitting room, and then retailers can look for patterns in what customers left behind as well as in what they bought. Having that understanding can improve suggestion making in the store, allow for adjusted stocking practices, and help understand individual customer behaviour for loyalty card holders.

The Supply Chain - Retailers and manufacturers are always looking for an opportunity to drive out cost and ensure that the merchandise consumers want is in store. While the parameters considered are quite extensive, Tesco is taking it a bit further by incorporating weather into their calculations.

Checkout – Item level RFID had some great results at a Bloomingdales study last month. Interestingly the comments indicate that while the inventory savings are wonderful, there may be a greater opportunity for consumer benefits in leveraging RFID – help finding items, immediately provide details on size and colour, suggest coordinating items by scanning them and many more.

In Aisle - With the costs of technology going ever downward, expect to see more interactive solutions within the aisles as you shop. The costs and functionality of price verifiers and kiosk platforms are crowding ever closer, making the only obstacles a good interactive program and the operational support to make it happen. Expect the usual lack of knowledgeable staff to be replaced by viable useful technology solutions.

2009.33 | Item Level RFID

RFID has been touted as the future of retail for some time now. Item level tagging certainly seems a long way down the road, given the usual challenges of change including issues like RFID tag costs, altering the supply chain, and engineering changes to store operations.

American Apparel is making an attempt to leverage RFID in the store, and if it works, there are some interesting potential benefits given the right retail environment:

  • Simpler Inventory Management – Cycle counts are more automated and faster, providing more selling time and less administrative time for store staff.
  • Shrink Reduction – RFID could prove more effective than EAS technologies, given the potential to allow an exit gate alarm to go off only if an item has not been scanned. Instead of scan and de-activate, an item needs only be scanned. The gate could even identify the specific item that has passed through the gate to staff.
  • Better Service in Store – Always knowing the sizes and colours on the floor and in the back is key to customer satisfaction.
  • Potential Loyalty Program Benefits – Having RFID readers in the store could allow Loyalty card holders to be identified by staff and accorded special treatment.

There are certain to be other benefits not yet considered, so let’s hope that the business case comes together for the technology.

2009.27 | Strategies for Tough Consumers

Tough times drive tough consumers. Retailers are adjusting their strategy to the new reality around consumer behaviour in varying ways.

2009.23 | Trading Privacy

The basic agreement underlying basic consumer facing loyalty programs is that consumers are willing to trade a certain amount of their privacy in return for a discount on goods, services or other rewards.

Moving past that basic agreement, more sophisticated consumer facing organizations provide targeted offers or suggestions to consumers based on their selections or buying habits with the consumer’s agreement.

Now consider the internet generation and web 2.0, where few question the fact that every online and mobile service online is ’free’. All comers are completely willing to provide their intimate details to populate the key fields of the system – a marketers dream. In this environment, the consumer’s data is the price of admission for a ‘free’ service.

last.fm

Last.fm keeps track of all their members’ music and listening habits in incredible detail. In return, it is possible to listen to new music online with links to purchase music from iTunes, discover concerts and share music online or even right on their mobile device (video is coming, too). The data captured is an irreplacable resource that can be sold to music artists and labels (or movie studios). Detailed listening data can be used to target consumers of specific musical taste, providing spot on targeting, reducing promotional costs, and driving revenues.

While this could still be considered a fair trade, assuming data is kept anonymized and used for legitimate and agreed upon commercial purposes, it does bring up troubling privacy issues. In 2009 most people are comfortable sharing their information online in social media experiments like Facebook, last.fm, Bookarmy, Evernote and countless other very useful applications. There are certainly other applications for these consumers’ data that have not been considered by the consumers as they provide it, and insidious or not, it signals change in our society and our consumer interactions.

Privacy issues or no, the first consumer facing organizations that discover a seamless way to allow customers to move as themselves from point of service to online to the web, remembering preferences of product and business method, purchases, while making useful recommendations and generally acting as our trusted advisor will certainly profit. There are many attempts being made today.

2009.16 | Mobile Life

Everyone knows that mobile is exploding as a touchpoint for consumers. NCR is banking on it as are many others. I was amazed on a recent trip to Walt Disney World in Florida at the explosion of mobile device usage everywhere I went. I saw hundreds of teens texting on their holiday. I saw their parents using their mobiles to keep track of the rest of the family on vacation, as well as keep tabs on work via email. Disney even has a handheld based adventure for kids to experience at Epcot, indicating they understand the importance of this channel.

While usage numbers on mobile continue to grow, there are also some tremendous opportunities to improve on our mobile world and interactions with customers. Most of the interactions I observed were SMS and email based, and I don’t think that has even begun to leverage the technology to its fullest. This weekend, I used my mobile to:

:: look up new releases on dvd for friday night rental,

:: look up directions in real time from a concert hall to a restaurant,

:: look up the restaurant’s phone number from the maps application to call ahead for a table,

:: view the restaurant menu ahead of time to look for options to suit my wife’s special dietary needs

:: transfer money directly to a friend’s account from my phone to pay him for the show tickets, as I don’t carry cash or cheques,

:: look up the score for Saturday night’s Leafs vs Canadiens hockey game (lost again),

:: read through 3 newspapers (NYT, Toronto Star, Globe and Mail) while waiting to pick up my children at a party,

:: look up an author online while I listened to a radio broadcast about her and bookmarked it,

:: record a voice memo to pick up some things while running errands for my wife,

:: look up Easter themed books while shopping at Chapters,

:: take a picture of a book I thought my wife would enjoy while at the store,

:: look up my bookmark for the author from the radio and look for her books,

:: show an image of my iRewards card to the cashier in my photos on my phone instead of carrying all my loyalty cards.

Most of these items are an opportunity for consumers to leverage a tool they already have in a new way, increasing convenience at little or no cost. On the business side, they are also an opportunity for consumer facing organizations to learn about their customers habits, and increase their wallet share via coupons, services, or leveraging a recommendation engine. This is a true win for both parties – more convenience for more information, allowing better service.

My iPhone makes it easier to do the things on this list, but not so easy that everyone is willing and/or able to do them just yet. Many people don’t even know that they can do these things. Apple and RIM have an opportunity to assist via their interfaces, and organizations have a tremendous opportunity to build or be a part of the applications of the future that blur the line between mobile and self service. Applications like:

Electronic Wallet – Pay with your mobile using credit cards via NFC, or pay with retailer specific declining balance cards tied to an account number via 2D barcode. Carry all of your Loyalty cards without straining your purse or your wallet. Benefit for the consumer; less of a physical burden and less organization. Benefit for the retailer; more in depth understanding of consumer activity as loyalty cards are at hand for every transaction.

Electronic Receipts – You can already get a receipt emailed to you at the Apple Store. Why not have it transferred to your phone in a receipt folder in electronic format? If there is a return or a warranty issue, you always have all of your receipts, and you can transfer them back to the retailer when for validation you complete a return. No more paper cost or paper waste. Never lose the receipt. No more George Costanza wallet.

AutoFill Applications – I saw a terrific example of this at the NCR Executive Briefing Centre. Your phone has all of your vital statistics on it in an encrypted folder. You pull up an application on a kiosk, or Microsoft Surface, and you can use your phone to automatically fill out the application with all of your personal details, much as you can with the Google Toolbar Autofill on your web browser. No more filling out your name and address for the millionth time on an application for a Loyalty card, a car lease, or even a raffle ticket.

Mobile Plan Adjustments – Go directly online and change your phone plan. Traveling to Europe? Go online on your mobile, select the checkboxes to add a la carte options like bulk SMS messages or air time to your plan, and your account is updated. No more IVR or talking to the call centre, no more confusing options, just a quick bullet list of what you have and what you pay, right on your phone.

Hotel and Car Keys – Another great demo at the NCR Executive Briefing Centre. Instead of obtaining a plastic card for your room key, use an NFC chip in your phone to register and open your door during your stay. They could do this with rental cars as well. They use similar technology for car sharing services like Zipcars. No more lost keys.

Mobile Image Recognition - Take a picture of a restaurant, a menu comes up on your phone. Take a picture of a product, and a datasheet or informational video plays on your phone. It’s coming.

Store in the Pocket – As a retailer, what better way to tighten your relationship with your customer by putting a virtual store on their mobile device. Your store is always on and always with them. Amazon has a store that’s optimized for the iPhone, and you can buy books on iPhone kindle app. Watch for ways to connect these stores to the real world, like scanning a barcode or taking a picture of a product. Starbucks has started it by allowing customers to find and purchase the song they hear on the radio at the store from Itunes on their iPhone with no charge for wifi. Expect to this to expand and get smarter. No more wandering the book store trying to remember that music or book your friend suggested.

Order Streamlining - I’ve been waiting for someone to perfect (or even attempt this) for a couple of years now after seeing this great mockup that I carry around on my phone. The real opportunity here is to connect the mobile experience to the self service or assisted service situation. Customers have a menu application on their device, and select their order. The selections are saved, and then the screen shows a 2D barcode on demand, which can be read by a customer facing scanner at the end of the line. That 2D barcode can also encode a retailer specific declining balance card so that payment can also be initiated at the same time as the order is placed. QSR organizations have the opportunity to lock in customers; providing them faster service, and complete tendering – the slowest part of the transaction – while the customer is waiting for their order. No more repeating your order or having it misheard.

These solutions may seem a little like a scene from the film Minority Report, but if you don’t use this technology, you know someone who will. These solutions exist today, they will become increasingly easier to use, more mainstream, and their usage will grow.

I placed my first ecommerce order in 1995, when I purchased a Wired Magazine subscription via email with my credit card number because that was the only way it could be done. If you consider the leaps and bounds the Internet has taken since that time, imagine how mobile will influence our lives in the coming years.


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