Where does loyalty fit into the mobile wallet? Consumers are used to carrying around loyalty programs in their physical wallet; including those attached to specific credit cards, store cards, and those ubiquitous “Buy 10, Get 1 Free” punch cards we see at many small mom and pop shops. In fact, Colloquy estimates that the average U.S. household belongs to 18 loyalty programs—now that is one packed wallet!
With the move towards mobile wallets a couple of key questions arise:
- Will a mobile wallet change how consumers approach and use loyalty programs?
- Will a mobile wallet open up new channels for engagement with consumers?
While these questions remain unanswered for now, we are starting to see new digital loyalty programs in the retail space. Most programs are focused on mobile apps replacing physical punch cards, such as the Punchcard app or Belly.
Of particular interest, the recent launch of Apple’s Passbook could provide new opportunities for aggregating loyalty points, deals, and offers into one iPhone application. With a variety of large retailers, financial institutions, and even airlines developing for Passbook, this is one product to watch in 2013.
Beyond digitizing existing loyalty programs, can the use of incentives provide new opportunities to reward consumers for using a particular mobile wallet? Just as many credit cards and businesses use loyalty rewards as a point of competitive differentiation, could mobile wallet providers also adopt a loyalty program in order to drive account sign-ups and continued use of their particular wallet?
One thing is for sure; with U.S. consumers belonging to over 2 billion loyalty programs, incenting consumers to engage with a mobile wallet and rewarding them for their continued use, is sure to play a key role.