Loyalty schemes have been a retail mainstay for decades, but the cracks are starting to show. The transparency ushered in by digital and social media has made consumers more aware of the value of their personal data than ever before.
Theyre less trusting of brands that promise rewards in return for harvesting their behavioural data, and far less happy to open themselves up to retailers in return for a handful of vouchers.
Just look at the woes experienced by some of the UKs biggest loyalty schemes. In recent months, Sainsburys announced that it is overhauling its Nectar loyalty scheme; Waitrose closed part of its loyalty programme; and consumer backlash forced Tesco to backtrack on a change to its Clubcard scheme.
Indeed, research by TCC Global found that only 22 per cent of respondents said they would spend less at a shop if it no longer offered loyalty cards. A Nielsen study found that British shoppers are among the most likely in the world to have a loyalty card, but also the least likely to use them.
Its time for a new approach to loyalty schemes, designed not solely for the retailers benefit, but built with consumers interests at heart.
Let us consider the value exchange that users have with publishers, which is based on the theory that you consume content for free in exchange for exposure to ads. This experience has been eroded by all parties in the value chain.
Allowing your data to be leased by brands you are interested in, for content that you want, is a strong step towards returning balance to the value exchange.
Online data marketplaces are the new loyalty schemes, enabling consumers to sell their data to brands, and directly benefit from its use in the form of discounts, offers on goods and services, or as currency.
Blockchain technology underpinning these marketplaces enables consumers to own and control their online identities.
Rather than consumers trading their browsing history for “free” online content, marketplaces will emerge allowing you to trade your intentions to buy a product.
Consumers will be able to dictate the terms they want, and artificial intelligence and the blockchain will share this information with brands, that can then make sophisticated bids for their business.
Consumers are taking back control of their data, rather than allowing Facebook or Google to profit from their buying intentions, and retailers wanting their loyalty are going to have to start paying the proper price.