Loyalty App Development: How to Outvie Your Competitors in Retail

People love spending money, especially when it comes to their favorite brands. But what do they love even better? To be rewarded for their loyalty to your brand. So how can you benefit from these two human desires and double your attractiveness in the eyes of your customers? By building a loyalty app!

In our previous article covering three basic types of loyalty apps, we partially touched on the subject of loyalty apps for retailers. Today we’re going to dive deeper and discuss how to build a successful mobile wallet application to satisfy your retail business needs and make your customers happy.

Why invest in mobile loyalty applications?

It goes without saying that an effective customer loyalty program can help your company flourish. We’re not going to preach about the importance of loyalty programs or the benefits your business may get from them. However, we will stress that mobile applications can help you build profitable long-term relationships with customers. But why?

According to Vibes, 66 percent of people would have a more positive opinion about a loyalty program if they could store and access information in a digital wallet. No wonder classic loyalty cards, emails, and Groupons are no longer considered convenient. People want instant gratification, and that’s what a wallet app offers.

But loyalty apps aren’t just beneficial for customers. Modern mobile cloud-based applications are capable of gathering data and offering promotions  based on what a user does in an app. Moreover, people are willing to give up their personal information in exchange for better service, according to Loyalty360. In other words, loyalty apps are great tools for studying your customer’s behavior.

What does a deserving loyalty application look like?

While a lot of brands invest in loyalty app development, few brands actually develop apps that prove valuable for customers. Unfortunately, loyalty apps can come across as attempts by retail brands to force customers to buy more stuff by any means. As a result, coupons and promotional offers don’t sell, but rather annoy.

So how can you make sure that your loyalty application doesn’t become an annoying coupon delivery system? Here are six tips for developing a useful loyalty application.

1. Rewards

Loyalty programs always include special perks and rewards. This is how they demonstrate your appreciation to customers. But offering rewards also makes users spend more time in an application, which is beneficial for you and your loyalty app. There are numerous ways to hook your audience, and what works for one ecommerce company might not work for the next. What we’re offering are some ideas to consider.

Stars, points, coins, or any other in-app currency are actually a great idea for a rewards strategy. Your main goal is to show your customers quantifiable progress in an engaging way. In other words, your loyalty app needs a dash of gamification. Starbucks, for example, has decided to stay true to its ideology and gives its customers two stars for every dollar spent in their stores. Moreover, they’ve spiced up their mobile application with a colorful animation displaying a branded coffee cup that fills up with reward stars after every purchase. The more stars you have, the broader your opportunities.


[A dashboard in the Starbucks mobile app that shows user's progress]

Chick-fil-A uses a different strategy to please their customers. There are no stars, points, or levels in their new application, which is now available for Android and iOS. Instead, Chick-fil-A gives users free meals and drinks after a certain number of transactions. A chicken-shaped animation notifies users when they’ve earned a free treat.

2. Personalized offers

You can provide users with relevant offers and coupons based on their typical orders and preferences. Personalization is key to customer loyalty. 94 percent of mobile wallet users are likely to save personalized offers and coupons if you put their name on it, according to a 2016 Mobile Customer Study conducted by Vibes.

Kohl’s Yes2You Rewards is a bright example of an application that provides users with such personalized offers and coupons. A Kohl’s customer is sure to get a perfect deal with their name on it after every purchase they make either in-store or via the mobile app.


[The Kohl's mobile wallet feature]

You can also learn from Chick-fil-A in this regard, as the items they offer as free rewards are based solely on a user’s previous orders. Imagine how awkward it would be if a vegetarian was offered a free beef sandwich after ordering a dozen fruit salads.

3. Phone-based payments

Making purchases with your smartphone is convenient. So if you want to add value to your loyalty application, don’t hesitate to integrate barcode scanning. Let your customers use their phone in place of a physical loyalty card at the checkout.

Most loyalty applications link with physical cards by asking a customer to input a loyalty card number and an 8-digit code, which are typically located on the back of a card. But you can come up with another method if you like — by making use of a smartphone’s camera, for example.

There is also a tendency among retailers these days to create digital loyalty cards with QR-codes generated automatically upon registration. What’s more, you can give users additional points on their cards when they sign up for your application.

But what about transferring money to a loyalty app? With some loyalty programs, users can transfer funds from an ordinary credit or debit card (or from Visa Checkout or PayPal accounts) to a rewards card through a form in the wallet application. The more payment options you offer, the wider your audience might be.


[Adding a preferable payment method the Dunkin' Donuts mobile loyalty app]

However, we want to underscore that if you’re thinking of dealing with sensitive client data (such as credit card information) on your own, you need to go through the PCI Compliance verification. Ultimately, you are responsible for storing and protecting your client’s financial data, which in other cases would be the concern of third parties, such as Dwolla, PayPal, Authorize.Net, Stripe, and others.

To eliminate the money reload procedure we just described, you could also implement Auto Reloads from a user’s main credit card to make the app even more convenient.  This is what Starbucks did. You can ask your users to set a reload balance and set the amount of money that will be automatically added to the card when the balance has fallen to that level.

4. Ordering ahead

Ordering and paying ahead can save a lot of time. According to research sponsored by Chick-fil-A, 82 percent of parents say they will do nearly anything to avoid standing in line with their children. In fact, 48 percent of interviewees said they would prefer not to eat at all than to wait.  This is why many restaurants and retailers have decided to integrate “order & pay” features – and they seem to have caught on. Users can choose food and drinks from a menu, pay, send their order to the nearest store, and pick it up later.


[Order customization in the Chick-fil-A mobile loyalty app]

But how might you integrate in-app payments for these orders? Nowadays there are plenty of options: Apple Pay, Google Pay, Visa Checkout, PayPal, and other payment gateway providers are at your service. At any rate, it’s best to let your users choose among several payment methods. Sometimes directly entering their credit card or debit card is the best option.

5. Location awareness

Want your users to stay faithful to you? Then help them find you wherever they are. Starbucks, Chick-fil-A, Dunkin’ Donuts, Kohl’s, Walmart, and other retail chains have already made use of this feature. How do your users benefit from location-aware apps?

With Chick-fil-A, users can order food to a nearby store to pick up later. They can also check a restaurant’s hours, menu, promos, and available amenities. The Walmart app provides you with weekly store-specific product ads. This will be really useful when you’re looking for a bargain.


[Finding the nearest restaurants with the location-aware Starbucks loyalty app]

Location awareness is great, but you can go even further with beacon technology! Carrefour, a French-based chain of supermarkets, offers its customers a beacon-enabled app for iOS and Android platforms that gathers data about in-store customer behavior and then automatically delivers relevant ads and coupons.

As a result, users get personalized ads for products, sales alerts, and special offers just by walking up to a store. The number of Carrefour app users has increased by 600 percent in seven months after this feature release!

6. Wearables

Want to untie your user’s hands? Then let them perform some basic actions using wearables, namely Apple Watch and Android Wear. The Starbucks loyalty app has successfully adopted this technology, and now their iPad and iPhone users can enjoy watching their Starbucks card balance, searching for the nearest store locations, and paying all from their Apple Watch. Unfortunately, this feature is not available for Android Wear users yet

The retail giant Walmart has also found a way to attract Apple Watch fans. The company has made an extension for its iOS application that lets users check items off their shopping list without having to take their smartphone out.


[Walmart's loyalty app extension for Apple Watch]

Customer loyalty application development requires careful thought, and we hope these tips will help you come up with an engaging mobile wallet or loyalty app idea. Consider the set of functions listed above as a starting point for any loyalty application, but keep in mind that the possibilities are endless. Well-designed loyalty apps can truly provide value to your customers and help your business grow.

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