Last holiday season, I wrote about the potential of digital receipts for driving consumer engagement; through embedded PFM features and integrated social media channels. Unfortunately for merchants, the value proposition of these features is limited. Instead, they are more focused on turning infrequent shoppers into regular customers through store loyalty programs.
Enrolling in store loyalty programs is rarely a frictionless process. Even providing basic information like an e-mail address at the register isn’t worth the time at a store that you only frequent half a dozen times each year. How much easier would it be to simply opt into the store’s loyalty program after the purchase, with just one touch on your smartphone? Done correctly, digital receipting can facilitate this very process, eliminating the friction that currently exists in loyalty program enrollment.
Banks are positioned to capitalize on this opportunity, as the only stakeholders that are guaranteed to maintain a relationship with the consumer after a purchase. American Express has laid the groundwork for a seamless loyalty program enrollment process with its real-time purchase notifications, which highlight transaction details like merchant name, store location, transaction amount and purchase date.
Merchants might consider partnering with Amex to implement a button on these purchase notifications that allows consumers to opt into a loyalty program immediately after a purchase. Amex, which already owns the customer’s e-mail address, can share this and other customer preferences with the merchant, to be linked with the bank card used for purchase. (Of course, Amex would need to migrate from static Passbook-based notifications to dynamic notifications generated by its native mobile app)
With one touch by the consumer, a merchant can complete the acquisition of a new loyalty program member. No loyalty cards need be issued, since all loyalty benefits are now linked to the customer’s credit card and e-mail address. Redemption of future discounts and deals can be automatically applied at the point-of-sale, with no extra effort by the consumer, just as is the case with Amex’s existing card-linked offers platform.
If merchants are extra ambitious, they might try and convince Amex to free up more space on the purchase notifications for loyalty point balances and incremental points earned. Consumers, who have become increasingly protective of the volume of marketing received from merchants, may be more open to receiving point information, coupons and deals on a digital receipt in real-time rather than floods of promotional content at random in their e-mail inbox.
Merchants have likely avoided the on-boarding approach described above due to consumers’ tendency to use more than just one bank card at the point-of-sale. Merchants also prefer to own all loyalty and marketing rather than having it managed by a financial institution. However, merchants like Sports Authority, DSW and Best Buy must evaluate this type of relationship versus the possibility of no relationship with customers who visit their stores less than a dozen times each year.