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Smartphones: The next generation of customer loyalty cards?

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5th Nov 2013
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Consumers are ditching plastic loyalty cards and turning to their smartphones instead to save and spend loyalty points.

According a new survey of 2,000 consumers by CloudZync, most wallets are still bulging with an average of four traditional loyalty cards but consumers access an average of six loyalty schemes via their smartphone.

Two thirds of consumers (62%) were found to access at least one loyalty scheme for electrical stores over their phones, followed by hairdressers (43%) and clothes stores (38%).

Supermarkets are leading the pack for traditional loyalty cards, the survey showed, with 92% of consumers regularly using at least one loyalty card for a grocery store, followed by coffee shops (51%) and pharmacies (51%).

However, the likes of Sainsbury’s, Tesco and Waitrose are lagging behind when it comes to mobile loyalty schemes – just 36% of those surveyed said that they access supermarket schemes through the device in their pocket, dropping to 33% for coffee shops and 27% for pharmacies.

Be it on mobile or hard plastic, consumers were found to collect their points but failing to claim the loyalty rewards. According to the findings, loyalty card users have on average of £83 worth of redeemable points across their loyalty cards at any point in time, and UK shoppers cashed in on over £4billion1 worth of loyalty card points over the past year – yet 150million points remained unclaimed as consumers simply didn’t know how to redeem them.

Meanwhile, the survey also examined any reluctance from consumers to join loyalty schemes and found their already-bulging wallets to be the biggest barrier (33%), followed by not wanting to fill out the paperwork to join the scheme (14%).

Andrew Smith, Co-Founder and CTO of CloudZync, said: “We are a nation of bargain hunters, and the research shows that Brits are cashing in on loyalty schemes across the board. But whereas we have previously been limited by the number of cards we can fit into our wallets, the boom in mobile devices means that we can now access even more loyalty programmes via our phones.

“While it’s clear that traditional cards are still doing well in many sectors, retailers that don’t embrace smartphones and tablets as part of their loyalty schemes risk being left behind by those businesses that see the opportunity these devices offer to engage consumers in new ways. Mobile gives retailers a platform through which they can build more personal relationships with customers while providing them with access to offers and promotions in a more convenient way, so they never miss out.”

Mobile or plastic, research out earlier this year showed that loyalty programmes are still a big hit with consumers with 40% of consumers claiming that they would be less likely to use a retailer without a loyalty scheme.

Edwina Dunn and Clive Humby, the brains behind Tesco’s hugely successful Clubcard scheme, recently explained how they introduced a new era of customer insight a – and why Big Data is a myth.

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