Article

Walgreens, LoyalBlocks unveil loyalty innovations

The Walgreens app lets customers scan their mobile devices to earn points and redeem awards without a physical card.

September 20, 2012 by Natalie Gagliordi — Editor of KioskMarketplace.com, Networld Media Group

Customer loyalty has changed. Gone are the days when plastic cards that filled up your wallet or keychain were the only means to receive discounts from your favorite retailers. The smartphone revolution has changed how people shop — and loyalty programs are evolving as a result.

In the last few weeks, customer loyalty has witnessed two significant firsts that up the ante for retailers looking to make an impression with shoppers.

Walgreens has been around for more than 100 years, but it was just this past Sunday that the pharmacy chain, along with sister pharmacy Duane Reade, launched its first customer loyalty program. With Balance Rewards, digital and mobile technology offers multichannel access to shoppers wanting to join, manage or use the system from their smartphones.

The Walgreens mobile app lets customers scan their mobile devices at the register to earn points and redeem awards without the need to carry a physical card.

With the concept of modern customer loyalty around since the early 1980s, why did Walgreens finally decide to join the gang of retailers already using them? According to Jim Graham, of Walgreens' corporate media relations, there are two significant reasons why they decided to launch the program now.

"Since coming out of the great recession, shoppers have redefined how they view value," Graham said. "Balance Rewards gives us an additional way of enhancing the value of shopping at Walgreens."

The second reason, Graham said, was the timing of new technology.

"Technological innovations make loyalty programs more powerful than ever, and mobile technologies are among those innovations," Graham said. "The app allows us to integrate Balance Rewards with other great mobile features, including in-store aisle maps so you can find the school supply or Band-Aid you need, and photo print services so you can send your pictures direct from a mobile device to our store for copies."

So far, Walgreens shoppers are embracing the program, Graham said. Pre-enrollment started on Sept. 6, and from then until the official launch on the 15th, more than a million people had signed up.

The other first for loyalty programs comes from the company LoyalBlocks, who has developed and launched what it says is the first "walk-in to check-in" mobile app. 

With LoyalBlocks, customers sign up through the app with their favorite stores that participate with the program. When they visit the store, the app communicates with the merchant's tablet, which automatically checks the customer in and sends them token rewards and deals.

Loren Pomerantz, spokesperson for LoyalBlocks, explained how the app is the first of its kind as a self-service marketing tool for small businesses.

"Retailers have tried to solve the problem of relying on a shopper to decide to reach in their pocket and log in to the check in app for the system to read them," she said. "Nobody has figured out how to make the user do absolutely nothing, until now."

LoyalBlocks ran a pilot program in New York City with 300 merchants using the app, along with 50 others around the rest of the country. They launched nationally on Sept. 13.

The app is free to both iPhone users and Android-based users. Merchants wanting to install the program, however, must have an Android tablet, Pomerantz explained. If they don't have one, LoyalBlocks will provide it for an additional cost.

The fee for retailers is $59.99 per month with the Android device included, and $39.99 per month for retailers who provide their own tablet. But according to Pomerantz, it's a small price to pay for the benefits the app will bring to stores.

"It's easier to keep customers and to get customers with this app," she said. "There is a lot of competition out there, and you as a retailer want customers to feel valued. It is worth it for every merchant to reward them for the loyalty."

And if recent trends are any indication, retailers have realized the power of mobile technology and its ability to drive traffic and increase customer satisfaction. Macy's, CVS, Kroger, Jersey Mike's and Qdoba barely begin to scratch the surface of retailers using an app-based loyalty program. The empowered consumer is steering the course for a more diverse and interactive marketplace, bringing choice and dynamism along for the ride.