Mobile loyalty programs have advantages for both customers and retailers. For customers, mobile loyalty apps allow them to track rewards progress, redeem rewards, get coupons, and check-in at stores. For retailers, mobile loyalty programs build customer loyalty, increase brand value, understand customer purchase behavior, and aid financial well-being by identifying important customers. However, there are still needs around strengthening IT infrastructure in Indian retail, improving customer authentication methods, and creating simpler interfaces for mobile loyalty programs. Addressing these gaps could help bridge the gap between customer satisfaction and loyalty.

1. Mobile Loyalty
Current Landscape & Need-Gap
Analysis
Soumyajit Sengupta
12P171
MDI

2. Use
Loyalty Apps
• For Customers:
– Keep track of their progress
– Redeem rewards
– Obtain coupons
– Check-in at stores
• For Retailers:
– Builds customer loyalty
– Increases Brand Value
– Understand Purchase Behavior of Customers
– Aid in the financial well-being of the company by
Identifying the Most Important Customers

3. Advantages of Mobile Loyalty
Programs
Customers & Retailers
• Convenience
• Availability
• Ease of Marketing
• Ease of Access
• Greater Loyalty
– Greater Personalization
• Additional Engagement
• Greater Financial Returns
– due to Repeat Customers
• Greater Reach
– Increasing Penetration of Cellular Service in the Country
• Ease of Payment
– One-stop platform linking payments to points accumulation
• Recovery
• Understanding Customer Preferences and Choices
• Additional Sources of Revenue
– E-Gifting

4. Modus Operandi
Loyalty Programs
• The consumer/customer has to be kept at the centre of the
program. It is then primarily a 2-step process. But executing
them is very crucial to the success of the program.
• Step 1:
– Infuse SIMPLICITY and TRANSPARENCY as a starting point
• Step 2:
– Set down the rewards and the way to earn them clearly and
unambiguously
• Only a few Indian companies have managed to implement
them successfully
– Future Group
– Shopper’s Stop

5. Current Landscape
Indian Retail Sector
• Indian retail business was run in a network, knit together in a very
personal manner
• Post globalization, there has been a rapid de-personalization of
operations in Indian retail
• To bridge the gap between the older and the current modes of operation,
technology-based consumer relationship management (CRM) needs to be
adopted
• The concept of loyalty or CRM is highly advanced in developed markets
but in India, companies are just waking up to this reality
• This is where Mobile Loyalty steps in
• Statistics show that only 20million people are enrolled in the top 10 loyalty
programs in the country. This is a very small figure compared to a
population of 1.2billion people. So the scope of future reach is high.
• Loyalty Programs & Mobile Loyalty Programs are currently provided by a
number of third-parties like:
– Payback (Client: Future Group)-Physical Loyalty
– Accentiv (India) which has clients like Van Huesen, Tommy Hilfiger and Indian
Oil-Mobile Loyalty

6. Mobile Loyalty
Current Offerings in the Indian Retail
Sector
• Retailers such as Future Group, Landmark Group, Reliance Retail, Indus
League and Shoppers Stop are now experimenting with mobile-based
mechanisms to relieve consumers of the pain of carrying loyalty cards
every time they visit a shop
• Indus League
– Makers of Indigo Nation, Scullers and Jealous 21 introduced a mobile-based
loyalty scheme after it found that women were keenly using GPRS to check out
Jealous 21's new product offers, making marketing activities more relevant
• Landmark Group
– Owners of “Lifestyle” allows customers to accrue and redeem points through
an SMS short code service even if they are not carrying loyalty cards
• Madura Fashion & Lifestyle's Van Heusen brand has gone a step ahead by
tweaking its mobile loyalty program on the basis of gender
– Diva Club has been created specifically for Women, focusing on Discounts

7. Suitability
Loyalty Apps
• Loyalty apps work best for products which have a high
repeat-purchase quotient like apparels and
commodities
• Loyalty apps will not work for products which are not
suitable for quick, repeat buys like a house or a car
• Successful loyalty programs are those that constantly
evolve based on:
– The needs of the customer
– The responses of the competition
• There is no room for complacency given that it’s a tool
that effectively decodes customer purchasing behavior

8. Scope
Single, Unified Loyalty Program in the
Indian Retail Sector
• Loyalty Programs in a developing market like India has a huge potential
but the current ecosystem is not conducive to offering a single, unified
loyalty program.
• This is because of the low level of organization in the country’s retail
sector. The retail sector is valued at $450billion(contributing 35% of the
GDP) while the organized sector is only about $30billion.
• The scale of the retailers in the country is not yet that much to tap into the
market as a single unified loyalty program. This will be possible as the
sector becomes more and more organized.
• The best option with respect to having a single unified program is to have
a hybrid form of loyalty program. It will not be the true coalition model nor
will it be a completely disjointed model. It should be a model in which the
databases, though different, are shared on a common platform.

9. Advantages
Mobile Loyalty Apps v/s IT-based
Loyalty Programs
• In retail, margins could be as thin as 1%. Hence,
after an initial thrust on store management,
many players find it more prudent to open new
stores or introduce new products rather than
investing in IT-based CRM.
• Leading retailers are taking loyalty programs to
mobile phone platforms, which are not as
expensive as IT-based CRM.
• To reduce the costs of loyalty programs some of
the IT companies are hosting these platforms in
the cloud systems

10. Need Gap Analysis
Retailers
• Need of a strong IT backbone to ride on, which is missing from
most chapters of the Indian retail sector
• Need for a more reliable customer authentication tool
• Mobile Loyalty serves two purposes:
– Checks misuse of the CLP(Customer Loyalty Program) offering
– Helps in tapping the correct transactional data
• Need for a simple interface and easy access
• NFC and barcode scanning would part of the Loyalty platforms in the
future
• Customer loyalty programs in a NFC enabled phone means clear and
convenient interface allowing for tracking of the exact number of
points and even see the products we can spend these points on
• NFC also provides easy and fast access to loyalty programs
• In addition to bringing in an element of ‘wow’, they also enhance
consumer convenience (easy to access information and transact) and
reduces per customer time at the till (easy to redeem)

11. Need Gap Analysis
Customers
• Satisfaction v/s Loyalty
– There is still a yawning gap between
• the percentage of people who say they're satisfied with a
business and those who consider themselves "loyal" to that
business
• who are intent on maintaining the relationship and
continuing it into the future
– Many companies have figured out how to deliver
satisfaction, but they've not yet figured out how to
earn loyalty anywhere near those levels
– This loyalty gap can be particularly pronounced in an
industry like retail where competition is harsh and
growing