Later this year a new mobile phone-based loyalty programme called 'Shop Scan Save' will be launched by up to 17,000 merchants throughout the UK's PayPoint retail network.
The programme will allow mobile phone users to save money on their shopping bills while enabling brands and retailers to change and strengthen the way they interact with customers. The Shop Scan Save programme is a new development of an earlier programme called M-Bar-Go (see 8 Sep. 2005), which was launched by The Light Agency in September 2005 as a trial in Sainsbury's Jackson's stores in Hull.
As we reported in The Loyalty Guide report, the mobile phone is increasingly likely to be seen by consumers and loyalty programme operators alike as the future token-of-choice (particularly where payments, loyalty points, and opt-in personalised marketing can be brought together).
How it works
Shop Scan Save brings together mobile phones and EPOS payment systems to provide customers with money saving offers, delivered by SMS text messages. Shoppers can join the programme by sending the word 'JOIN' to a special SMS number. A unique barcode identifier (a membership number) is sent to the customer's mobile phone in the form of a graphical text message. That barcode can then scanned at the retail merchant's checkout, and the customer will automatically receive any discounts that are available to them.
Programme members can also choose to receive regular personalised SMS offers entitling them to yet more discounts at participating retailers. The offers they receive are generated based on their own purchase history.
By partnering with the PayPoint retail network (which includes Co-ops, Spar, CostCutter, NISA-Today's, Londis and thousands of independents throughout the UK and Ireland), members of the Shop Scan Save programme in almost every town and city are less than one mile away from a participating outlet. In addition, many of the country's major brand owners are also working with the programme, including P&G, Nestle, Mars, Unilever, and Red Bull.
The PayPoint alliance and national rollout follows the successful trial at Jacksons, which saw an average 20% coupon redemption rate. The peak redemption rate, however, reached 90% as members were able to request specific offers tailored to their shopping list.
According to Marc Lewis, founder and chairman of The Light Agency, "At the heart of this service is the mobile phone. With the majority of today's consumers never leaving the home without one, Shop Scan Save offers brands and retailers a new channel to talk to shoppers." PayPoint's CEO, Dominic Taylor, added: "With Shop Scan Save, value flows from the brand owner to the customer, rather than the other way around."
What the future may hold
The Wise Marketer asked Peter Wray, managing director for UK-based loyalty consultancy LoyaltyMatters, to highlight some of the most interesting features of the new programme. According to Wray, the Shop Scan Save initiative is interesting in the context of modern customer loyalty on several levels:
- It had to happen...
The development of a customer loyalty programme that is built by integrating with mobile phones is an obvious and inevitable development, given the ubiquity of these devices in the modern lifestyle. Nearly everyone in the world (both in developed and increasingly in developing economies) has a mobile phone, and those mobile handsets can be used for highly personalised messaging (which does also demand great care in terms of data and privacy protection). The mobile phone is also a very low cost communication channel between suppliers and consumers. So it is increasingly difficult to understand why the agencies that develop and operate large scale customer loyalty programmes seem to be stuck on plastic cards for member identification when a digital, networked identifier is already in the hands of the consumer. Of course branding issues may still be a justification but in an increasingly visual and fast-changing marketing environment, many of these issues could be addressed graphically through the mobile handset. Existing test schemes with mobile coupons in the UK have delivered response rates of 2 or 3 times higher than traditional paper coupons.
- Reducing churn
From the mobile network operator's perspective, the latest trend is toward using customer service and insight as a differentiator to help reduce the crippling costs of customer churn. Personalisation will certainly be a key factor in building relationships between customers and network operators. And loyalty in the mobile market is about more than rewards - it is more about delivering the correct mix of products and services to meet the requirements of specific customer segments. Anything less will be ineffective at best.
- Taking on the bigger players
This programme is also interesting because of its focus on a diverse group of second and third tier retailers that are seeking to play the big grocery groups' game of customer insight, yet lack the individual cost/benefit platform from which to achieve that insight. The real value in Shop Scan Save could well turn out to be the database of information that it will be possible to construct, particularly examining the buying habits of customers who engage with the programme. For programmes such as this, retailers will need to be aware of who owns the database, who has access to it (and to what degree), and who will undertake the analysis of the potentially massive flow of customer information. We can clearly expect to see Dunnhumby-style operations emerging from other data analysis service providers to help satisfy this market.
So this kind of initiative is well worth watching, and the market can expect more like it to follow - and not just in the United Kingdom.
For additional information:
· Visit The Light Agency at http://www.thelightagency.com
· Visit PayPoint at http://www.paypoint.co.uk
· Visit Shop Scan Save at http://www.shopscansave.com
· Visit LoyaltyMatters at http://www.loyaltymatters.com