Effective Loyalty Apps Will Drive Mobile Payments Adoption - eMarketer
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Effective Loyalty Apps Will Drive Mobile Payments Adoption

Points and miles come first

March 31, 2015 | Retail & Ecommerce

According to data from Salesforce Marketing Cloud, loyalty programs are among the most effective mobile campaigns. But when relatively few people have actually adopted mobile payments, why are retailers still so effective at driving loyalty via handheld devices?

Effectiveness of Select Mobile Campaign Types According to Marketers Worldwide, Nov 2014 (% of respondents)

According to Christopher Barnard, president of loyalty commerce transactions and currency management firm Points, loyalty comes first, and mobile payments will follow. After all, consumers already have plenty of convenient ways to pay. But as they search for more opportunities to earn points or miles toward a trip—and as marketers find ways to incentivize these activities with offers on the mobile platform—they'll begin turning to mobile for more and more.

People used to think writing a check was easy enough, Barnard pointed out. "But credit cards became more interesting for people to use as a new form of payment when miles were added to them."

He went on to note that research has indicated loyalty and rewards were currently considered the top benefit of mobile payments. "An argument can be made that people care more about the loyalty side of the transaction than about the payments side," Barnard said.

The killer app for mobile and loyalty, according to Barnard, will come when an app developer succeeds in marrying as much data as possible about the consumer and the loyalty programs she participates in with offers from multiple retailers or brands—and especially if that app incorporates location-based offers, loyalty program data and payment capability. "Those kinds of much more specific loyalty details added to location awareness can really drive purchase," Barnard explained. "If you imagine going to a clothing store, and an offer pops up saying that you'll get 500 miles in a certain loyalty program, and the app knows that you're only 500 miles away from a free trip to Fiji, all of a sudden buying the sweater translates directly into a trip to Fiji. I think you'll buy the sweater."

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