Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.
Social tools like Facebook, Foursquare, Groupon, Living Social, Belly, Perka, Shopkick and otheres present the potential to level the playing field between local merchants and their national competitors. What Sports Authority and Dick's Sporting Goods are doing with The League and Scorecard respectively, can be done just as well by a local tennis, running or golf shop.
In fact, local merchants should be able to do much better, with their proximity to their communities providing an advantage in tailoring messages.
Probably the smartest way for local merchants to compete is to leverage digital loyalty systems in a coalition model. Local merchant discount networks have sprung up across several states to encourage residents to spend their money locally, rather than mindlessly running to the mall.
My little South Florida town is launching "Shop the Point," a "resident card that entitles you to discounts, incentives, and other rewards for patronizing businesses in our community." While I'm excited that the Chamber of Commerce drive such a program, I also see a potential shortfall if planners adopt the tempting DIY approach for merchants to loyalty.
The big win is creating cross-shopping activity among and between businesses, enabling customers accumulating value to cash in for something more interesting than "10% off." That often relies on the standard recipe for loyalty marketing of providing tailored offers to individuals based on where they shop and even their interests. The method of enrollment and data collection for this program will determine how powerful it can be for merchants in the long run.
I know what you're thinking: "Just keep it simple ... you can't build Membership Rewards for the local community." I get that. But I also know that a successful social shopping program, Zavee.com — based in the next community over — could be adopted as the backbone of this new local discount club using a registered card model. Alternatively, the folks at Belly or Perka would welcome the opportunity to offer merchants a paper-free way to shift rewards from just discounts to experiential rewards. Foursquare may be able even able to offer SMS support for those not rocking a Smartphone.
The power of the coalition model is to share offers, data and cost to drive better results for the whole. There are inexpensive digital tools that can support a local coalition. My little town has taken a first step in the loyalty race in hopes of keeping hard earned dollars within the community. Their journey represents a case study of programs that are hopefully also being explored across the U.S.
How would you rate the potential of digital tools to support loyalty programs across local retail communities?