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Insight: Will mobile lead to U.S. coalition renaissance?

Over at Mobile Commerce Daily, reporter Brielle Jaekel ponders the ability of mobile loyalty platforms to drive the expansion and adoption of multi-merchant loyalty coalitions in the United States. Long an outlier in the sea of coalition loyalty programmes in developed markets around the world, the U.S. may now be on the verge of a coalition loyalty explosion as Plenti, Spring annd ShopYourWay build a critical mass of consumers interacting with these programmes through mobile devices.

As Jaekel points out, the U.S. market has long been resistant to the launch of a national - or even regional - multi-merchant loyalty coalition. While mature markets around the globe typically feature one or more coalition programmes, the fragmented nature of the U.S. retail market has proven a tough nut for would-be coalition operators. From the failed launch of Jaz Rewards in the early 2000s to failed or stalled efforts from several major players in the coalition loyalty space, no one has succeeded at launching a U.S. coalition other than Kickback Points - a C-store-focused coalition based in the Midwest - and now Plenti, which American Express launched without the participation of a founding grocery partner.

Indeed, the lack of a willing U.S. grocer such as a Kroger or a Safeway to anchor a coalition with "everyday spend" earning power has long been viewed as the primary obstacle to launch. The advent of mobile loyalty platforms has, however, changed that dynamic. The primary drivers of the U.S. mobile coalition revolution, according to Jaekel:

 

  • Falling Geographic barriers: According to Megan Flynn, executive vice president at Fuel Rewards, "The rise of online and mobile shopping within the US has caused many of the geographical boundaries to fall and has finally made coalition more appealing in the US market."
  • Mobile engagement: Mobile loyalty platforms offer a host of engagement opportunities that traditional card-based coalition programmes have historically been unable to match. According to Derek Strong, general manager at OtherLevels: "At first, any retail loyalty programme - multi or otherwise - is 'just another' retail loyalty programme, especially if it is 'just another' sign-up sheet to fill out or card to carry around. The more that these programmes become embedded into the retail experience, via mobile integration, card-linked offers, and programme-member benefits both online and in-store, the more adoption they will see among consumers."
  • Consumer convenience: With today's consumer economy embracing the "frictionless" customer experience, mobile-based coalition loyalty programmes combine all the benefits of the coalition play - faster earning power and the ability to earn across a number of brands without carrying multiple loyalty cards - with the convenience of mobile interaction. Says Kate Hogenson, loyalty strategy consultant at Kobie Marketing: "Mobile plays a large role in multi-retailer rewards because consumers live on their mobile devices today... Multi-brand programmes allow consumers to have one app instead of cluttering their phone with an app from each individual brand."

 

The Bullet Point: No one would be more excited than us to see coalition loyalty finally take flight in the U.S. While mobile device integration certainly makes participation and engagement easier, it remains to be seen whether the conspicuous lack of U.S. grocer participation will effect long-term consumer engagement. Will consumers be able to earn enough meaningful rewards through Plenti, for example, that they'll stay engaged through multiple earning and redemption cycles? It's too soon to say. The future of coalition loyalty may be mobile, but our money will be on the first U.S. coalition programme to finally convince a major U.S. grocer to join the party. Grocers, the ball is in your court.

Read the Mobile Commerce Daily article here.

- Rick Ferguson


 

 

More Info: 

http://www.mobilecommercedaily.com/