A new study by Juniper Research (www.juniperresearch.com) found that 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 research 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 personalization 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 data from Juniper Research found wide variations among retailers and other reward card providers with regard to the extent of digital loyalty integration. In the UK, the research group 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 U.S. retailers Walgreens, where 61% of card holders had linked their card to an app, and Target which had only 27% of cardholders linked.
According to research author Dr. Windsor Holden, “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.”
The research warned that retailers that didn’t 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.