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Mobile paves the way for multi-retailer loyalty adoption in US

Coalition loyalty programs are gaining speed in the United States with multi-retailer programs such as Plenti, Spring and ShopYourWay substantially growing now that mobile technology has broken down geographical barriers.

Mobile is allowing U.S. loyalty programs that span a wide range of brands and retailers, rather than being specific to a certain store, to thrive after the strategy saw years of wide spread adoption in other countries. While consumers are just starting to get on board, an innovative mobile strategy can spur exponential growth for coalition programs.

“Multi-retailer loyalty programs started overseas more than a decade ago in much smaller countries – the UK, Germany, Australia, etc.,” said Megan Flynn, executive vice president of program development, brand and communications at Excentus. “They have had time to build strong networks of retail partners and large consumer followings.

“With the U.S. being the largest economy in the world and with its vast geographic landscape, the notion of coalition is more challenging,” she said. “Without pillars of everyday spend, there is not enough transactional activity to engage a large population of consumers.

“These categories include grocery, fuel, and restaurant in addition to retail and tend to be largely regionally specific. 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.”

Spanning success
Multi-retailer loyalty programs have long been popular in various countries other than the US, likely due to the small markets and close economy whereas the US’s vast geography and complicated economy has made it difficult for these programs to thrive. The rise of mobile has made the world much smaller in a sense, and has made it possible for coalition programs to make headway.

Loyalty programs with mobile integration including features such as messaging, location technology, beacons, real-time offers, card-linked offers and exclusive member benefits will be the ones to garner real attention and adopting moving forward. The more streamlined, relevant and beneficial the user experience is to consumers, the more likely the program will see success.

“[Consumers] are starting to embrace it, but increased mobile integration will help move things forward,” said Derek Strong, general manager in North America at OtherLevels. “At first, any retail loyalty program – multi or otherwise – is ‘just another’ retail loyalty program, especially if it is ‘just another’ sign-up sheet to fill out or card to carry around.

“The more that these programs become embedded into the retail experience, via mobile integration, card-linked offers, and program-member benefits both online and in-store, the more adoption they will see among consumers,” he said.

Convenience factor
Coalition programs have the potential to see significant adoption with consumers due to their convenience and advantages. For instance, American Express’ Plenti is climbing up the ranks in the Apple App Store’s shopping category.

The program spans major retailers such as Macy’s, Rite Aid, Expedia, Exxon, AT&T, Hulu and Enterprise. Members can earn rewards by shopping at these retailers, which they can control through a mobile application.

Now that consumers are so rooted to their mobile devices for a variety of reasons, coalition programs’ convenience factor is upped through untethered integration.

“Mobile plays a large role in multi-retailer rewards because consumers live on their mobile devices today,” said Kate Hogenson, loyalty strategy consultant at Kobie Marketing. “From opening emails and playing Words with Friends to making purchases, customers are more comfortable than ever communicating with brands via smartphone.

“That means they want their loyalty rewards available on that device too,” she said. “They are downloading a variety of apps to fulfill online purchase, redeem rewards and browse the web, so having their loyalty programs all in one place on their mobile device offers the convenience that customers desire.

“Multi-brand programs allow consumers to have one app instead of cluttering their phone with an app from each individual brand.”