Retail Dive reported today about Plenti, a new "coalition loyalty" program that allows users to collect points at one retailer and redeem them at another. Initial partner retailers include: Macy’s, Rite Aid, AT&T, ExxonMobil, Nationwide, Hulu, and Direct Energy, among others.
This model has proven to work in other markets, including Canada, the European Union, Brazil and Australia. According to Capgemini consulting, the average U.S. household has signed up for 21 loyalty programs. That right there is a pain point.
The average U.S. household has signed up for 21 loyalty programs.Capgemeni Consulting
Consumers have shown they have an appetite for loyalty and rewards programs as they increasingly gain popularity and retailers race to invest in creating their own programs, so there’s definitely room for a player like Plenti to enter this market but the devil will be in the details. It has to be easier and more convenient than one-off loyalty options and well-tailored to consumers’ shopping preferences.
One possible vulnerability to the Plenti strategy is the advent of “mobile wallets” making a physical card like Plenti go extinct. Frankly, a lot of things have been slated for extinction due to the mobile wallet like Apple Pay/Passbook, but the market (especially the U.S. market which still hasn’t implemented EMV) lags.
The versatility of being able to collect points at everyday retailers, while redeeming them elsewhere (for bigger items) is appealing.
I'm an Android user and do not have access to Apple Passbook, so maybe Plenti appeals more to me than someone with an iPhone. If Plenti can save me from having to fill out multiple loyalty program forms, I would consider signing up but I don’t think this advantage alone will save it from extinction.
If Plenti gets the right retailers and businesses on board, there could be a place for Plenti to compete against integrated loyalty apps. I like the idea of getting to collect loyalty points at my grocery store and gas station but redeem them towards a purchase at Macy’s, for example. It incorporates loyalty to the businesses I shop at for everyday items and allows me to selectively redeem points or credit at different businesses, where I may be more likely to "save up" for something bigger.
