Friday, 30 July 2010

Centralised retail rewards

I wondered a while ago about fully-centralised retail reward programs. At the moment, at least in Australia, we have Fly Buys, Woolworths Select and any number of other loyalty and reward programs fragmented across the retail space. Each has its own card, its own count of reward points and its own catalogue. Wouldn't it be more convenient, I thought, to have just one program that every retailer joins? Then we could carry just one card, accumulate points much faster (since all purchases count towards that one program) and not have to worry about which retailer will give us points in which program. It would certainly be a big win for customers.

Then, of course, the other shoe dropped and I realised retailers wouldn't want that specifically because it removes any incentives of choice. There's no advantage in going to one place over another, so they'd have to compete on things like price and service. Ew.

So I thought a little further. What customers want is rewards points, as many and as fast as possible. What retailers want is money. What rewards programs want is data: shopping habits of the domesticated human. This can work for everyone, but it would require a change. If the one big rewards program paid retailers directly to collect the data, then everyone gets something they want, and the one rewards program can operate everywhere. The one question remaining is whether the rewards program can make more money selling shopping data than they have to pay to retailers to gather it.

Mokalus of Borg

PS - And, I suppose, whether money is worth more to retailers than the data.
PPS - Though there's nothing stopping them gathering their own data.


Charles said...

Lol. I never use those things. I don't know why I guess I should. Especially at best buy considering my ridiculous amount of electronics purchases....

Maybe if they put a gps tracker physically in the reward card, they could get enough raw data to make it all worthwhile.


John said...

I don't think I would use a rewards program with a GPS tracker in the card. In fact, I probably wouldn't use one card that links all of my purchases together anyway.