Kitchener-Waterloo Consumer Goods and Services - Affinity Cards
By Bill Hayward, Founder and President, Web4mation Corporation
Shopping and cards – Will they ever grow apart? Studies have shown families with young children shop for convenience and savings, from a wide product selection from specialty chains and grocers. Many consumers, who seek something different from the typical mall retailer, will visit the boutique retail store located in street-front locations.
Cards Benefit both Retailers and Consumers
The number of cards in circulation is expected to increase by 56%. There are at least 80 major credit card-based loyalty programs in the Canadian market, tied either to certain types of rewards or to specific retailers. If affinity programs are included the figure rises to 400. It is estimated three out of four Canadians participated in at least one type of loyalty program. Retailers use loyalty cards in several ways. The most common applications include:
- Membership & Tracking (ie Rogers Video, Blockbuster, Co-op)
- Club cards (ie Safeway, Save On) for register discounts;
- Points (ie HBC, Petro Can, Shopper's Drug Mart) earned by shopping that can be redeemed for merchandise;
- Partnerships with other loyalty programs (ie Air Miles, Aeroplan);
- Clubs and user groups (ie Running Room running clubs);
- Return guarantees (ie Wal-Mart, Zellers, Future Shop);
- Multi-store usage (ie The Bay, Zellers, Home Outfitters);
- Cross promotion with gas (ie Safeway, Esso, Petro Canada, Shell).
While in the past loyalty cards provided a method of differentiation from other retailers,
they are so widespread that they are now a minimum standard of business operations.
These cards (along with more powerful computers and data-mining software)
make it easier for stores to store and analyze information about how clients shop, to help them
develop better product mixes and customer incentives (sales!).
Recent changes in privacy laws prevent stores from sharing data, or accessing other sources' information about consumers, creating further need for retailers to develop their own information gathering systems. Also, because many people can pay using any one of a number of credit or debit cards, stores need to have a system of tracking that is independent of payment method.
Dealing with Wallet Bloat
Consumers will often shy away from getting new cards that do not offer sufficient value, as they are inundated and often have as many cards as they feel they can handle. It would appear, at least for the next few years, people that shop will continue to be offered more and more cards as retailers try to capture and retain customers.
However, retailers are finding resistance by the general public to join if they also need to carry another card to get the benefits. Will there ever come a day when consumers will only need one card to handle all their needs? Unfortunately this is unlikely anytime soon as retail competitors do not like to “share” their customers. Nor will they likely invest in the technology required to provide the customer with the ultimate in convenience.
Some organizations are providing alternative ways to reduce the number of cards people must carry with them. For example, many video clubs let you rent by presenting your drivers licence (once you are a member, of course), and Safeway let shoppers use their phone number to receive their Club Card discounts. Web4mation now has a card which combines the numbers and bar codes from multiple cards onto one single card, and they can also imprint other helpful information (like family members' birthdates and important sizes) on the cards.
Founder and President