Eye opening Technology

The Power Of One

Over the last few years, many loyalty cards have reached saturation driving the cost to get one additional loyalty member.  Member acquisition costs for some of these cards range from $10 dollars to now over $100.  It is not surprising that the average North American consumer has 7 loyalty cards in their wallet/purse.

There is a race to win the “one card connected to all” – meaning one card in your wallet will be connected to all the loyalty cards you setup for it.  The technology to do this is relatively simple as is the ask of the consumer – easy to understand, easy to accept the benefits and easy to sign up. However, getting merchants on board to accept the “one card for all” is not so easy.

Technology at point of sale is not the barrier to connect one to all.  It is much bigger than that – it is the belief that you trust someone else with your customer list.  Essentially, one card for all means that the host will have all customer lists.  Yes – of course there will be agreements that the information is not shared or used in any commercial way.  But that is a pipe dream.  Once the information leaves the retailer and is in the hands of a consolidator – anything can and will happen.  So executives need to decide the risks of sharing their customer lists with the risks of not participating with the “one for all” card and then losing sales.

Most theorists will quickly point out that the customer always wins – so if the customer wants one card for all – then retailers better embrace the idea and focus on winning a larger share of the customer’s wallet.  This is a big ask of retailers – especially large ones that have millions of cards, millions of transactions, and millions of predictive analytics (what their customer is most likely to buy).

Where the battlefield is today – is quickly changing – and tomorrow the one card for all – makes sense.  Apple Pay, that was introduced a year ago was seen as a competitive threat.  Now many retailers are accepting the technology because it is what the customer wants and choses to pay with.  It is not surprising that Apple is now in negotiations with banks about the creation of a new service that would let people use their smartphones to send money to one another as easily as they send messages.  This new service, which could be ready as soon as next year, would compete with PayPal’s peer-to-peer payments app Venmo, and Square’s Square Cash.

This service would provide additional reasons for iPhone users to use their Apple Wallets.  Clearly the race is on to make the Apple/Android smartphone’s ecosystem more attractive to users so that they can leave their wallets at home and be loyal to one who provides the greatest benefits in their ecosystem.

We all are working longer hours and anything that simplifies our lives – especially with a device that is always with us – is something the majority of people will embrace and welcome.