Retail technology and customer loyalty: Harvey Nicols switch to mobile-only scheme

This week Sir Ian Cheshire, former boss of of Kingfisher described how he expects card-based customer loyalty schemes to be replaced in the very near future by more complex, digital schemes which harness the power of ‘big data’ in a changing retail landscape:

“Card-based loyalty schemes will wither to be replaced by much richer multi dataset-driven systems that include all the searching and social data of our customers rather than just the SKU number of what they last bought.”

Harvey Nichols appear to be the first big retailer to make the switch to digital-only customer loyalty cards and Retail Week is asking whether this will signal the end for customer loyalty or reward cards as we know them?

Neal Fairfield, head of planning at digital marketing agency Razorfish, has come out in favour of the scheme and believes that, with the unprecedented adoption of smart phone technology in the UK, digital schemes are the sharpest move forward for retail at this time – primarily because they allow retailers to track both physical and online purchases concurrently, but it is not without it’s pitfalls:

“The success of Harvey Nichols’ scheme is about getting enough people on it and learning from the data very quickly,”

Recent research by Harvey Nichols into digital adoption found that over 80% of their customers stated that they would prefer an app, rather than another card in their wallet.

“Rewards by Harvey Nichols is uniquely different to competitors’ loyalty schemes, firstly because it’s an app, which we believe is the future of communication with our customers-instant, personalised and modern – and secondly it offers brilliant and indulgent experiences which will help our customers be fearlessly stylish.”

– Shadi Halliwell, Group Marketing and Creative Director at Harvey Nichols

However, Fairfield suggests a note of caution should be exercised, before encouraging retailers to join Harvey Nichols on the digital loyalty scheme bandwagon:

“I think loyalty cards will become increasingly redundant as shopping becomes far more personalised and far more efficient.”

However, it appears that House of Fraser are already attempting to follow Harvey Nichol’s lead, with the development of a new iPhone app for loyalty scheme members which will allow them to use their phone to track purchases and leave their card at home.

With a mobile payments revolution already in the offing, as Google step up to challenge Apple with their new ‘Android Pay’ technology – it seems that for now, developing retail apps is the smart choice for these stores – especially if the payment processing and other features can be merged together at some point down the line. We’re excited to see what happens next…