Ditch the cards for your loyalty program. Go mobile instead.
Loyalty programs are everywhere, from the grocery store to the EV charging station to your favorite clothing store. But are physical membership cards the best way to keep customers engaged? Mobile wallet apps offer an alternative for member management and authentication that is more convenient for customers, easier for merchants, and better for the environment.
The loyalty card problem
Chances are, if you open your wallet or purse, you’ll find a stack of loyalty cards from your favorite merchants. The local pharmacy. Your preferred gas station chain. Sporting goods and fashion chains. The sandwich shop. A travel program. Your gym. And on and on. In fact, Accenture reports that more than 90% of consumer companies offer some form of loyalty, rewards or membership program. That adds up to a lot of plastic in people’s wallets.
It’s no wonder that loyalty programs are booming. Whether you call it a rewards program, subscription commerce, or a VIP membership, everyone loves the perks these programs provide. Large programs like PAYBACK (India’s largest multi-brand rewards program) allow customers to earn points by shopping with a range of partner merchants, online and off. Other programs, like the H&M Club Rewards program or the UTA Fuel Card, are specific to a particular merchant. Members typically earn “points” with every purchase that they can apply toward special discounts or rewards. They may also have VIP access to sale prices and other perks not available to non-members.
But there is a dark side to these rewards programs: all that plastic. Many consumers end up with a fat wallet full of membership cards for all the merchants they frequent, which makes finding the right one at the register a tedious process. And if you don’t have the right card with you, you may end up missing out on your points or rewards benefits. Some merchants allow customers to enter a phone number or PIN instead of presenting a card—but this creates security and tracking issues, especially if customers share their information with friends and family.
Membership ID cards create challenges for retailers, too. Cards have to be printed and mailed, driving up program costs. If someone loses their card, the old card must be deactivated and a new one issued. Making changes to personal information tied to the card requires manual data entry and, often, the issuance of a new card. And the cards themselves create a lot of waste: all that plastic will one day end up in a landfill.
Loyalty goes digital
Mobile member authentication offers an easier, and more environmentally friendly, option for loyalty programs. Instead of pulling out a plastic card or entering a phone number and PIN on a touchpad, customers can simply authenticate themselves using their smartphone. With smartphone adoption nearly universal among adult consumers worldwide, digital wallet apps are increasingly replacing physical credit cards for payments. That same technology can be used to authenticate members for loyalty programs.
In a mobile credentialing system, the mobile wallet acts as a card emulator, communicating with the RFID reader via Near-field Communication (NFC) or (less commonly) Bluetooth® Low Energy (BLE). Mobile authentication offers significant advantages for merchants and program managers.
- Sustainability: A digital system eliminates the waste created by plastic membership cards, along with the energy costs to produce and ship the cards—minimizing the carbon footprint for your program.
- Speed: Members can sign up online and download their digital membership ID in moments, so they can use it right away. Automated, self-serve sign-up systems also reduce administrative time to set up a new membership ID.
- Cost reduction: With digital credentials, you reduce administrative costs along with the costs of printing and mailing physical cards.
- Convenience: A digital wallet is easier for consumers, so they don’t have to remember to carry their cards with them. Younger consumers, especially, appreciate the convenience of having everything accessible on their phones at all times, so they can streamline their wallets (or leave them at home).
- Adaptability: If a member’s personal information changes, it’s no problem—they can update their information themselves in their member profile. All changes are immediate, and a new card does not have to be issued.
- Optimization: Digital credentials give you real-time data on customer behavior and purchases—and you eliminate data problems caused by sharing credentials via a phone number or PIN. With a digital wallet tied to a particular smartphone, it is easier to track buying and behavior patterns for each customer. This allows merchants to optimize processes, products, special offers and the overall shopping experience based on accurate, real-time data.
A smooth migration to digital
With the right RFID reader, migrating from physical cards to mobile credentials is easy. For the immediate future, merchants will want to continue to accept already-issued member ID cards in parallel with digital credentials—after all, no one wants to show up at the register with their card only to be told it no longer works. Companies need to allow time for their customers to make the change. And there may always be a need to provide physical cards for the small number of consumers who do not carry a smartphone.
That’s where universal readers from ELATEC can help. The TWN4 Multi-Tech line of readers is compatible with 60+ RFID transponder technologies (including both LF and HF) along with mobile authentication via NFC or BLE. That gives merchants the flexibility to accept both physical cards and mobile credentials in tandem, for as long as they need to.
The future of customer loyalty programs is digital. Convenient access. Easy management. And a smaller environmental footprint. And with universal readers from ELATEC, making the switch is simple. It’s how we’re enabling digital transformation in customer loyalty programs.
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