Crypto currency charting the future of customer loyaltyBY Australian Retailers Association
Blockchain loyalty company Incent is taking up the challenge of bringing payments and rewards into the mobile era.
Over the past 20 years technology has transformed the retail sector. In the 1990s ‘shopping’ typically meant visiting a physical store and paying in cash. Forward-thinking consumers may have dabbled with mail order, frequently with lengthy delays and the added inconvenience of having to return substandard or unsuitable goods.
Consumers are increasingly shopping online, with e-commerce revenues growing at double-digit annual rates and user penetration expected to approach 75% of Australians by 2020. As fashion is leading the e-commerce sector, physical stores are yet to go out of fashion.
Customers are more inclined to pay by electronic means compared to coins and notes. With a mere 37% of payments made in cash, down from 69% in 2007, due to the influx of the convenient tap-and-go payments, customers are used to a fast, smooth and efficient process, both online and off.
There is one notable element of the retail experience that hasn’t moved with the times: ‘loyalty’.
Although a handful of major retailers have started to bring in dedicated apps – Starbucks being a notable pioneer – the majority are likely to use card-based strategies.
Smaller outlets probably haven’t got even that far, relying instead on paper tickets and ink stamps to record balances of points – an approach that is not appreciably different from that of Britain’s Green Shield Stamps of the 1960s, one of the first true loyalty programmes.
Australians are big fans of loyalty, with the most successful programme, Coles’ flybuys, topping 10 million cardholder. Qantas’ Loyalty program has a very large and growing membership too, with this aspect of the airline’s business bringing in over $400 million in revenue each year.
The reality is that too few of today’s rewards programs live up to the promise, with credit card loyalty programmes and airline schemes both coming under increased criticism for being more about corporate self-interest rather than delivering real value to members. When margins are squeezed, consumers suddenly find the value of their points plummeting.
Sydney-based tech start-up Incent has developed a world-first crypto-currency and blockchain-based approach to loyalty which removes precisely this problem: the unilateral devaluation of customers’ points by companies who see an easy way to cut costs.
Instead of issuing non-transferable IOU-style points, Incent gives merchants and consumers access to cryptocurrency points that have real value, independent of the issuer established on an active secondary market.
A recent survey of British consumers found less than half redeem the points they collect.
“When it comes to improving loyalty schemes, 26 per cent said that being able to view their points and rewards through an app would improve the experience, which jumped to 41 per cent for 18 to 34-year-olds,” the report’s authors noted.
Incent's coalition loyalty approach offers both customers and merchants the benefits of cross-selling and running promotions across a large network of users, while a mobile app offers partners an easy way to engage with their target audiences – especially the lucrative Millennial demographic.
“Ultimately, we’re about providing true value for both businesses and consumers,” said CEO and Co-founder Rob Wilson.
“Combine that with a great user experience and mobile strategy, and we think you’ve got a winning combination”said CEO and Co-founder Rob Wilson.
Incent Loyalty was crowdfunded by $1.1 million collected in cryptocurrencies in October- November 2016. For more information, visit incentloyalty.com
ABOUT THE AUTHOR
Australian Retailers Association
Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $310 billion sector, which employs more than 1.2 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.