My survey explores how customers deal with lots of retailer loyalty and discount cards, and the hassles of carrying around an increasing number of cards, while the Aite survey “provides insight into the demographics and attitudes of consumers who choose credit cards based on rewards programs, and sheds light on the other factors that drive consumers to select one card over another”. Basically, the difference in focus being retailers versus financial institutions.
Aite suggests that card issuers need to create a more convenient product for customers in which a single bank card can aggregate lots of different programs:
"It is clear that most rewards cardholders possess multiple rewards cards," says Ron Shevlin, senior analyst with Aite Group and author of this report. "As issuers look to one-up each other with ever-expanding rewards, Aite Group believes that there's an opportunity for issuers to differentiate themselves by creating a rewards hub that enables cardholders to aggregate and integrate programs."
I agree with the general premise of this advice, but I don’t believe that a financial institution can offer a truly convenient solution to the problem. Hence the work I have been involved in.
Want some of the results of my survey? It turns out that 70% of shoppers in Singapore have over 3 loyalty or discount cards, and 40% have over 5. Those tend to be almost exclusively women, almost 9 in 10. Men simply can’t carry around lots of cards in their wallets, unless they start carrying purses.
People with lots of cards are definitely interested in solutions to the fat wallet problem. 56% of these customers declared that they would be “very interested” in a mobile tap & go wallet that would let them register all of their loyalty cards on their mobile phones, so that they can just tap their phones when they shop instead of presenting their cards. In the future, I want to look at men’s behavior more specifically, to see if interest in joining lots of retailer loyalty and discount programs would go up substantially if fat wallets (and purses) are no longer needed.
Oh yeah, here’s an important piece of data: a huge 62% of loyal shoppers declared that they would be “very likely” to prefer shopping at a store that allows them to tap their phones, versus a similar store that requires card presentation. Retailers that make it easier to participate in their loyalty programs will clearly attract more customers. Some retailers will take this insight and try to create a mobile wallet that only supports that retailer’s loyalty card, which is already being talked about in Europe with some of the largest retailers. Those projects will ultimately fail because only the most loyal customers will dedicate their mobile phones to a single retailer. But hey, you know that some big retailers will absolutely have to spend lots of money trying to do that, right?
Aite is selling their survey for lots of money. Mine was done for my own use, but if you want to buy it let me know and I’ll dress it up a bit like the big analysts do and sell it to you real expensive. Just kidding! (Well sort of, contact me here if you’re interested in what I’m working on).