Time for Contactless Loyalty?

Almost everyone I talk with lately has a perspective on what the “new normal” will be like after we emerge from our shelters and can roam free again. Will we simply return to our old buying habits and favorite haunts or has this global event permanently changed where and how we will move outside the safety of our homes? This dilemma is causing us all to think about everything we do each day that we never spent a second thinking about before this crisis.

Our work with all kinds of retailers reveals that there are real time changes happening across all consumer segments and retail landscapes. COVID-19 has driven consumers to rapidly adopt new shopping skills and behaviors. Just look at the significant surge in the delivery of groceries and fresh produce. Brick and mortar retailers are seeing a rise in online sales and delivery services. Retailers are also struggling with new and different kinds of issues — inventory shortages of certain products, restrictions on certain purchases, increased sanitization efforts as well as the construction of physical barriers and dividers between their employees and customers to maintain safe social distances.

Post Covid-19, social distancing will most likely have a significant impact on customers wanting to touch or physically interact at POS terminals which will directly impact customer loyalty programs. As a recent Wall Street Journal article pointed out, no one wants to touch the payment screen at checkout. Leading companies like Visa, MasterCard, American Express and many others are reacting by allowing higher limits on contactless payment (ApplePay, SamsungPay, etc) and even eliminating the need for signatures. But for many businesses, point of sale systems are a cornerstone for engaging with their customers allowing them to gather important consumer behavior and loyalty analytics as well as provide them with free merchandise, rewards, coupons, or even advance released products. We’re seeing customers not share their phone number or even scan a barcode at the POS, which is typically the only way retailers are able to capture a customer’s loyalty. For most of the retailers we work with, this is a HUGE loss in capturing data (~75% drop for a retailer with 150 stores).

We anticipate COVID-19 to have a long tail and might significantly alter consumer behavior forever. Contactless payment, cashier-less stores, self -checkout are all trends which are becoming mainstream in their own way. Building the ability for a customer to walk out of the store will need a new era of frictionless payment processing (which is happening right now) but will also need revisiting of the loyalty program. Getting customers to have multiple apps on the phone is not the solution, either.

Quite simply, capturing a customer’s loyalty has always been broken, COVID-19 has simply amplified it. Innovation in FinTech and data privacy has made exponential progress, yet loyalty remains mostly untouched (phone numbers or barcodes).

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Our company Banyan was born to help retailers engage their customers and increase adoption of loyalty programs like never before. We offer services like sending email receipts, auto-enrollment in warranties/rebates, auto-enrollment in product recall notification, seamlessly capturing and tracking loyalty data— all without the customer ever giving a phone number, barcode, or any other identifier at the POS. I’m sure you can relate to the current experience where the cashier asks for your phone number, or the POS requires you to scan the flimsy laminated barcode on your keychain. Or yet worse for the retailer, we all know people who gave a phone number of someone in their family.

We envision a customer experience at the POS which feels something like this — you pay and leave! Your tapped, swiped, or inserted card is your identifier, so every time you pay, you enjoy the benefits of the loyalty card. You don’t ever need to find your keychain, or share your mom’s phone number at the POS.

We’ve designed our API based solution to benefit everyone, the retailers in particular enjoy this technology as it allows them to capture almost all card transactions, drive a hyper-personal engagement post-purchase without changing the customer’s behavior.