Why loyalty cards are stuck in the past

Consumers have embraced smartphones for almost every part of their daily lives, but loyalty programmes are stuck in the past, with shoppers often having to carry cards or search through apps to access their rewards.

As technology has changed the way people bank, shop, travel and communicate, consumers are increasingly expecting the same convenience from loyalty programmes.

Byron Rode, founder and CEO of (my)cards, part of Glynt, said loyalty programmes need to catch up with the digital lifestyles consumers have adopted.

“Consumers no longer judge loyalty against another retailer’s loyalty programme. They compare it with the best digital experiences they have every day,” Rode said.

The smartphone has become the device many people rarely leave home without.

It is used to make payments, order groceries, book flights, hail rides, access banking services and book medical appointments.

However, despite this digital convenience, many shoppers carry physical loyalty cards or move between different retailer apps to find the right programme.

Rode said this is increasingly out of step with how consumers live.

“When the most annoying part of shopping is looking for your rewards card, you know it’s time for an upgrade,” he said.

Loyalty programmes have become an important part of household spending, particularly as consumers face pressure on their budgets.

Rewards and points can help shoppers stretch their money further, while retailers use loyalty programmes to encourage customers to return.

According to BrandMapp research, 77% of loyalty card users said loyalty programmes influence where they buy groceries.

The research also found 51% said loyalty programmes influence where they buy fuel, while 41% of consumers prefer buying from stores where they belong to loyalty programmes.

However, while loyalty programmes influence where people spend their money, accessing those benefits can be frustrating.

My view is that the future of loyalty is heading towards convenience.

Rode said consumers want their loyalty cards to be as easy to access as other services on their phones.

He said 45% of consumers use virtual cards for convenience, security or rewards.

The growing use of digital cards suggests shoppers are ready for loyalty programmes to become part of the smartphone experience.

For years, retailers developed their own loyalty cards, apps and digital ecosystems.

This meant loyalty evolved differently from payments, which went through a rapid digital transformation driven by consumers’ demand for speed and security.

If consumers can order food, book a flight or make a payment with a few taps, having to search for a loyalty card can feel unnecessarily outdated. For retailers, making loyalty easier to use could also strengthen the relationship with customers.

The result is a fragmented loyalty landscape where shoppers can end up with several cards and apps.

“My view is that the future of loyalty is heading towards convenience,” he said.

The (my)cards app aims to bring existing rewards programmes together in one place, allowing shoppers to access their loyalty cards from their phones.

The idea is to remove some of the frustration that comes with carrying several cards or forgetting a card at home, said Rode.

For consumers, the shift is not simply about getting rid of plastic cards. It is about making rewards easier to access and ensuring shoppers can benefit from programmes for which they have signed up.

As smartphones replace many of the things people once carried, loyalty cards are likely to follow the same path.

Rode believes the technology exists and consumers are embracing digital cards.

When the most annoying part of shopping is looking for your rewards card, you know it’s time for an upgrade.

The challenge for retailers is to ensure loyalty programmes keep pace with customers’ expectations.

“If consumers can order food, book a flight or make a payment with a few taps, having to search for a loyalty card can feel unnecessarily outdated. For retailers, making loyalty easier to use could also strengthen the relationship with customers,” he said.

As household budgets remain under pressure, rewards and discounts can make a difference.

“The message is simple: loyalty programmes can no longer rely only on points and discounts. They also need to offer convenience. For today’s smartphone-dependent consumer, loyalty may increasingly depend not only on what a programme offers, but also on how easily those rewards can be reached,” said Rode.