Mobilised retailer loyalty schemes on the rise

More than three billion loyalty cards will operate as mobile-only or be integrated into mobile apps by 2020, according to a new study from Juniper Research.

The predicted jump in mobile loyalty programmes represents more than double the 1.4 billion said to be in operation at the end of last year.

Juniper's report, 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.

Within the research it is argued that the improved targeting and personalisation made possible by digital coupons was leading to greater activity rates, with Juniper also suggesting this method can resolve what is viewed as a key failing of traditional loyalty schemes where a lack of relevant offers had resulted in a downturn in usage.

In the UK, it was found that around 40% of Nectar Card holders had acquired the loyalty app by late-2015, but less than 4% of Tesco Clubcard holders had done likewise with the supermarket's loyalty mobile platform. Meanwhile, in the US, 61% of Walgreens card holders had linked their card to an app, but Target had 27% of cardholders linked.

Research author Dr Windsor Holden commented: "These disparities are likely to result from a number of factors.

"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."

Juniper warned that retailers not offering mobile integration were likely to have far lower levels of visibility on consumer activity. The research company cautioned that not digitising loyalty would put retailers at a disadvantage when seeking to tailor offers and thereby increase the lifetime value of the consumer.

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Juniper Research