In a thoughtful article – Fiona points to the fact that as loyalty programmes rollout the use of loyalty data across social media and integrate with POS, they could loose their brand! as the loyalty brand disappears with the lose of loyalty card etc. It merely points I think to the fact that loyalty programme owners will have to work harder to make their loyalty brand relevant, and engaging in a way they often have in the past.

iMedia UK By Fiona Moss on December 20, 2011

With new technologies meaning that loyalty schemes can be embedded further and further into our lives. How legal is it? And how far is too far?

It’s not news that the advent of technologies such as social media has given the brands that we use unprecedented access to our lives. Gone are the days when our only contact with a brand was on the high street. These days they are emailing us, texting us, writing to us (but only if we’re ‘old school’) and even ‘reaching out’ to us via social media.

And many of us have happily jumped on the bandwagon, joining, for example, the Facebook groups of our favourite brands. For instance, at the time of writing there are more than 400,000 ‘likes’ for the Marks & Spencers’ Facebook site. We get to know more about the brand and its products, and if we’re lucky we get some useful discounts and offers for the products we like. Most of us know that the trade-off for these ‘perks’ is the brand knowing more about who we are, and what kind of products/brands we like. Brands that engage with us in this way are effectively offering financial incentives to gain greater proximity to our lives.

Recent online discussion groups that we undertook for loyalty scheme providers, The Logic Group, indicated that many existing (and potential) users of retail social media groups/sites are advocates of such easy systems that ensure they have relevant offers regularly made available to them. Essentially, using social media as a loyalty scheme tool can appeal to busy consumers, who like the convenience of receiving loyalty scheme perks in a way that fits into their existing lifestyle.

But new technology is taking this integration of loyalty schemes into our lives one step further. Take two new developments (the exact user experience of which is still being decided as we type):

Loyalty schemes that use our credit or debit card to identify us (rather than a traditional separate card or fob) so we collect points as we spend (different from a store card as the credit/debit card provider would be independent from the loyalty scheme provider)

Mobile wallets which allow small purchase payment and points/coupon collection via our smartphone.

And this is where it gets interesting: with social media, adherence to a loyalty scheme and use of vouchers or discounts remains a deliberate, conscious act. Groups have to be joined, vouchers printed, specific shops or items sought out; in other words, we still have to actively engage with the brand. The brand reminds us of its existence, and we decide whether we have sufficient incentive to spend with it.

But in both our ‘new technology’ developments, any visible or tangible sign that we are indeed part of a scheme will be more hidden, as today’s reminders of the brand and its scheme (e.g. loyalty cards) will not be required. The loyalty schemes will become so integrated into our everyday lives that we may no longer have to think about them — or their brand — in order to use them. So what happens when a loyalty scheme becomes so embedded in our lives that it is no longer a conscious thing?

Certainly it is convenient, as the participants in our discussion groups pointed out; with both new technologies meaning fewer cards in our wallets. Undoubtedly, the brands will gain huge insight into our shopping and spending habits. And yet, will consumers engage with a brand if they do not have an obvious reminder of their adherence to a loyalty scheme, and by extension, the brand? While the benefits of embedding loyalty schemes into our everyday lives are undeniable, the importance of keeping customer interaction, so the value of the scheme — and the brand — can still be conveyed to the customer, should not be forgotten.

It seems therefore that the challenge for any scheme involving new technologies such as those mentioned here, will be to devise a user experience that ensures that we continue to actively, consciously engage with the brand, even while our participation in its loyalty scheme becomes so embedded in our lives that it is an unconscious act.

Fiona Moss is a research manager at Ipsos MORI

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