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19 JANUARY 2019


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Tuesday, 06 June 2017 12:43
Meet the Sponsor: Bink
What is the Future of the Loyalty Industry? In a phrase, “Payment Linked Loyalty”
Article by Lee Clarke, CEO and co-founder, Bink

Today’s consumer is fast, efficient and digitally savvy. They expect seamless, personalised, end to end solutions that save them time and harness the power of the technology they’re already using. Yet traditional loyalty schemes have evolved very little since their inception in the 1990s, continuing to operate on a plastic card or paper voucher basis.

It’s undeniable that these systems have their benefits; customers understand how they work and many are happy to play along if they’ve remembered the right card and aren’t in a hurry. However, if retailers, from supermarkets to clothes stores and travel agents, want to foster emotional rather than transactional relationships with their consumers they need to cater to the modern shopper’s preferences. Mastering this will provide an enhanced customer experience, drive brand engagement and cultivate stronger, long-term relationships.

At Bink we think ‘payment linked loyalty’ (PLL) will play a huge part in the future of the loyalty industry. As the name suggests, PLL enables consumers to automatically collect or spend points from shops and retailers simply by using their payment card. For customers this means they will never have to show a plastic loyalty card, paper coupon, or give a membership ID again.

We estimate that PLL will save 8 seconds at the till per customer which not only saves the consumer time but, for retailers means more shoppers through the door and higher sales. Furthermore, removing the need to create and distribute plastic loyalty cards eradicates a significant cost, while simultaneously offering a substantial environmental benefit as every year millions of plastic cards go into landfill, where they take 450 years to biodegrade.

The contactless payment trend is here to stay, and so too is the efficiency-based society that is both symptomatic of, and encouraged by it. According to the UK Cards Association, there are 107.4 million contactless cards in issue in the UK, and in March of this year over £4bn was spent using them, an increase of 166% since last year. As ‘contactless’ asserts itself further users will become increasingly disinclined to physically present an additional loyalty card at the till, as it nullifies the point of choosing a quick and effortless payment method. The risks of this are clear; retailers will lose their insights into consumer behaviour and consumers will receive less rewards - however, this can be avoided by the adoption of payment linked loyalty.

The future of the loyalty industry also lies in mobile. Mobile is the primary technology in which consumers interact with the world and it has already shaped the way brands reach audiences. Whilst traditional loyalty schemes use cards and vouchers, many now also have apps. This will only become more commonplace as mobile continues to permeate the consumer world – by 2020 Ericsson estimates that 90% of the world’s population over six will have a mobile.

For retailers mobile offers the opportunity to engage with their customers, through loyalty apps, even when the customer isn’t shopping. Whether it’s wishing them a happy birthday or reminding them of points they are yet to spend, it gives retailers a way to build trust with the consumer that is convenient and non-invasive. At Bink we built our business model around mobile and believe it should be one of the key foundations for all retailers’ strategies.

Today’s customer has access to more choice than ever before, empowering them to reward or punish retailers based on a single experience. Loyalty presents an opportunity for brands to distinguish themselves from the competition, as well as increase their financial margins. The industry is on the cusp of some big changes and brands need to keep up to stay relevant to their customers.

Embracing technology such as contactless payments, mobile and payment linked loyalty are effective ways of doing this. The future of the loyalty industry belongs to the brands that embrace these changes. Those that do, will see stronger customer relationships and more effective loyalty programmes.

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