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AIR MILES' Mobile Platforms Lift Membership

October 18, 2013



Emmie Fukuchi
Associate Vice President of Digital & New Media
LoyaltyOne’s AIR MILES

With the recent drop-off in adoption of BlackBerry in Canada, AIR MILES, a rewards program in Canada owned by marketing company LoyaltyOne, decided to make iOS and Android devices its priority for app design. The program has more than 10 million active members, called “collectors,” representing approximately two-thirds of all Canadian households. Emmie Fukuchi, associate vice president of digital & new media for AIR MILES, spoke with eMarketer’s Danielle Drolet about the mobile landscape in Canada and how the rewards program’s business goals are aligned for success.

eMarketer: What key trends are you seeing this year in mobile in Canada?

Emmie Fukuchi: Smartphone penetration continues to climb in Canada. Now at more than 60%, we believe there are increasing opportunities to engage collectors on behalf of our sponsors.

With GPS capabilities being a standard feature of most smartphones, marketers have the opportunity to connect with consumers in a context-aware way—through push messages that provide consumers with opportunities to use mobile apps to engage with specific campaigns at the right time in their shopping journey.

“By capitalizing on the increased penetration of GPS-enabled devices, AIR MILES will be able to make specific offers to collectors when they reach a store or even enter a shopping mall.”

While more than 74% of smartphone owners get real-time location-based information, only 18% use a service to check in to locations. However, they are extremely open to receiving relevant coupons or offers when they reach a store location. By capitalizing on the increased penetration of GPS-enabled devices, AIR MILES will be able to make specific offers to collectors when they reach a store or even enter a shopping mall.

eMarketer: One difference we are seeing from last year is that BlackBerry adoption has dropped off in Canada. What will the shift in adoption habits mean for your mobile efforts?

Fukuchi: As previously noted, we are seeing great increases in smartphone penetration across Canada, but across our collector base, the iPhone still leads, with more than 40% of smartphone collectors using one. We have seen the most growth with Android-based devices, which have steadily risen and now make up 30% of all collector smartphones. We continue to monitor any uptick from the launch of the BlackBerry 10, but like the rest of the smartphone market, we have seen a decline in the number of our customers carrying BlackBerrys over the past year.

These market factors have caused our first priority on designs to be for iOS and Android devices. Should we see the demand and penetration rise for BlackBerry 10- or Windows-based devices, we would contemplate releasing new native apps for those operating systems, as well.

eMarketer: How are you using mobile to increase traffic?

Fukuchi: The AIR MILES rewards program introduced its mobile app in 2010. It was the first loyalty application of its kind for smartphone users in the country. It was introduced as a response to the growing popularity of mobile devices. To date, there has been more than 950,000 downloads of the app and overall, we are seeing 25% of all traffic to our digital properties coming from a mobile device. In order to optimize that experience, we have also launched a mobile site and a tablet app.

We are also very excited about the impact of mobile while in-store. The AIR MILES mobile app enables you to look up sponsor locations and check in for offers. We have had more than 6 million check-ins to date, with the average user checking in every week.

“To date, there has been more than 950,000 downloads of the app and overall, we are seeing 25% of all traffic to our digital properties coming from a mobile device.”

eMarketer: How significant of a role does location-based services play in your mobile efforts?

Fukuchi: We want to be where our collectors are, and the AIR MILES app enables us to do so. Collectors can quickly find the closest sponsor locations in Canada. We have more than 10,000 locations. They can use the app to check in and receive relevant offers so they can maximize earnings on the spot. Some sponsors also offer bonus reward miles simply for checking in.

The key to location-based services as part of a mobile program is to present customers with relevant, personal and contextual offers. Geofencing and push notifications, while significant in the US markets, is just starting to be leveraged in Canada, and the technologies are still emerging.

eMarketer: How much revenue percentagewise are you seeing from your mobile efforts? How is this different from previous years?

Fukuchi: In 2012, AIR MILES saw an immediate and sustained transactional lift of between 5% and 20% following the launch of the updated app with a new “check-in” feature. Our mobile initiatives have shown that a mobile strategy can help drive significant consumer engagement with a strong return on investment.

eMarketer: Can you compare and contrast your mobile app vs. mobile website in terms of performance? Is it important to your business to have one or the other, or both?

“Our mobile initiatives have shown that a mobile strategy can help drive significant consumer engagement with a strong return on investment.”

Fukuchi: Both our mobile app and mobile website are key parts of our long-term vision for mobile. We leverage the app to deliver an exceptional experience for Android devices, as well as for iPhone and iPad users. Meanwhile, the mobile web provides access on the go for customers on other devices and platforms.

We believe it’s important to ensure a great customer experience across all interaction points—mobile app and web provide unique opportunities to deliver the most robust and efficient experience depending on the user needs.

eMarketer: Responsive design is top of mind for marketers in the US. Is it the same in Canada? How does this help mobile gain traction with your collectors?

Fukuchi: Responsive design is also top of mind for marketers in Canada, as we have seen smartphone penetration continue to increase, and the use of multiple devices to interact with brands via laptop, smartphone and tablet is on the rise. The complexity of managing across multiple platforms can be resource and budget intensive, and responsive design is a solution that can help simplify this complexity.

eMarketer: Do you experiment with mobile payments? If so, what?

Fukuchi: AIR MILES recognizes that mobile payments will become an increasingly important part of the shopping experience over the next few years. When we ask AIR MILES collectors what kind of mobile capabilities they want in the future, we are hearing that they want access to relevant and personalized offers, as well as ways to ensure they earn AIR MILES everywhere they shop.

There is interest in mobile payments, but also a lot of confusion about exactly what mobile wallets are all about. We are currently working closely with our sponsors to enhance the mobile shopping experience to increase customer engagement and streamline the in-store checkout experience.

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