… and there will be 3bn mobile-only loyalty cards by 2020 as consumers add them to apps, says Juniper

A new study from Juniper Research has found that more than 3 billion loyalty cards will operate as mobile-only or be integrated into mobile apps by 2020, up from 1.4 billion last year, as consumers move to app shopping and want to add their cards.

The new research – Mobile & Online Coupons: Redemption, Loyalty & Consumer Engagement 2015-2020 – found that brands and retailers are increasingly responding to consumer demand for mobile integration, with many now offering customers the opportunity to store their loyalty cards within a dedicated digital wallet.

Crucially, the research argued that the improved targeting and personalisation made possible by digital coupons was leading to greater activity rates, thereby resolving a key failing of traditional schemes where the lack of relevant offers had resulted in a downturn in usage.

However, the new research found wide variations amongst retailers and other reward card providers with regard to the extent of digital loyalty integration. In the UK, it observed that around 40% of Nectar Card holders had acquired the loyalty app by late-2015, but less than 4% of Tesco Clubcard holders. It found a similar disparity between US retailers Walgreens, where 61% of card holders had linked their card to an app, and Target which had only 27% of cardholders linked.

According to research author Dr Windsor Holden: “These disparities are likely to result from a number of factors. While in part they may reflect the level of satisfaction with the app and, or the features it offers, they may also be attributable to a greater degree – or greater success – of retailer marketing of their digital loyalty options.”

The research warned that retailers that did not offer mobile integration were likely to have far lower levels of visibility on consumer activity. As a result, it cautioned that they would be at a disadvantage when seeking to tailor offers and thereby increase the lifetime value of the consumer.

Linking apps to loyalty is going to increasingly make sense to retailers as apps are seeing a surge in use across mobile retailing. As we reported, almost half of retailers say that between 21 and 50% of their web sales come directly from purchases made on an app, according to a study of more than 100 leading UK heads of e-commerce, heads of mobile and heads of digital within the retail space conducted by Urban Airship – despite only 23% of IRUK Top 500 retailers currently having a transactional app and 4% have no plans to use apps as part of a multichannel strategy.