Payments data to replace loyalty cards

No primary category set

John Lunn of PayPal was surprisingly chipper about the future of the high street in a presentation titled “The future of bricks is clicks”, at yesterday’s MagentoLive conference. Talking about the future of the high street he spoke about how online was actually supporting innovative retailers rather than the Internet killing the high street.

He gave some astounding figures, 95% of all retail is influenced by the web in the UK according to John. That might seem surprising, but think about it – when was the last time you made a purchase without having seen the product, seen a fashion page on the Internet or read about a product release?

As a supporting example John revealed that today more of Argos online sales are picked up in store than are actually delivered. Consumers are buying or reserving items online and then driving to their local store in the knowledge that the product is in stock before they even leave home.

Old Data

John went on to talk about data. Data is critical to retailers and he highlighted just how important it is.How many loyalty cards do the vast majority of the public carry around? Most families have at least a Nectar card, Tesco Club card, Boots card, a coffee shop card or one of a myriad of other loyalty cards. These cards aren’t intended primarily to give you rewards, they’re designed to gather data so that companies can more effectively market to you.

It’s the same with product warranties, whilst you may feel safe in the knowledge that you’ve filled out the warranty for that new household appliance the reality is that you have no need to. All it tells the manufacturer is how far in the future it’s likely that your appliance will break down and you’ll be in the market for a new one!

Surveys are the same, companies expect us to freely give them the ammunition they need to market to us.

Loyalty cards, warranties and surveys have had their day though. It won’t be long before they’re very little use to retailers as consumers start to shop in new ways.

New data

Logging into a site with twitter or Facebook will become the norm and that opens up a huge raft of available data for retailers to mine. Do you ever check into a location with Foursquare? Again retailers of the future will love you as they’ll know when you’re in the area. You could be walking down the high street and a coupon code will pop up on your phone for your favourite coffee shop.

The future of payments is changing even as we speak. Already PayPal are running trials where you can buy without queuing in line at the checkout. The PayPal inStore app is already running the technology running in Oasis, Warehouse, Coast and Karen Millen where an assistant can scan your items and a barcode on your mobile and you’ve paid and checked out without going near the till.

In the future you’ll be able to check into a store as you walk up to the door just by dragging an icon on your mobile. You’ll then be able to pay just from the assistant matching your face with the display on their smart terminal checkout.

This gives retailers a huge advantage as as soon as you check into their store you know their past transactions, how long it is since they last shopped with you, how much they spent and even better you can greet them by name.

For the shopper it’s like visiting an old acquaintance, you know about them, you’re expecting them before they even walk through the door, and when they come to pay as they’ve already checked in they’ve already agreed to the transaction so payment is effortless without them even having to get their phone back out of their pocket or handbag to pay.

Payments will change, loyalty cards will be a thing of the past, and retailers will be able to market to their customers much more effectively than every before. They’ll know not only what you last purchased instore, but also what you bought from their website in the meantime.

The technology is already built into the PayPal app, it’s just not enabled in the UK so you won’t be able to see it yet. We’re expecting this new technology to be trialled in the UK at sometime in 2013, but to see how it works check out the video below.

8 Responses

  1. A lot of what you write about sounds far too Orwellian for me. As a consumer there are plenty of times I don’t want the shop i’m buying from to know anything about me or my shopping habits.

  2. I used to work in a cinema that tracked the use of credit cards by customers. If the same card bought over a certain number of tickets the till system prompted the member of staff to try to sell a membership. The box office staff were told try to avoid making it sound like the system had been tracking the customer.

    The problem with tracking with credit cards (and a lot of other loyalty cards) is that the retailer only gets the customers information at the end of the transaction (at payment time) when it is too late to suggestively sell items. This is probably why a lot of retails hand out vouchers with the receipts (Morrisons and Sainsburys have both added extra colour printers to print these vouchers rather than using the standard till roll printer).

    For customers to sign up for a loyalty scheme there would have to be enough of an incentive for it to seem worthwhile, although this is probably quite low.

  3. We already have dynamic pricing, e.g. for airline tickets. It’s tough if you looked but didn’t buy, then go back later and find it’s changed.


Why are more SMEs starting to accept American Express?

Why are more SMEs starting to accept American Express?

PayPal USD Stablecoin launched pegged to US$

PayPal USD Stablecoin launched pegged to US$

German Customers switch on to PayPal

German Customers switch on to PayPal

OnBuy direct payment, WorldFirst and Payoneer launched

OnBuy direct payment, WorldFirst and Payoneer launched

OnBuy 2023 Road Map OnBuy Payments OnBuy first profitable month and strategic investment

OnBuy 2023 Road Map shared with sellers

ChannelX Guide...

Featured in this article from the ChannelX Guide – companies that can help you grow and manage your business.


Take a look through a selection of the latest articles on ChannelX

Register for Newsletter

Receive 5 newsletters per week

Gain access to all research

Be notified of upcoming events and webinars