As the recession continues, loyalty programs are on the rise. According to loyalty market researcher Colloquy, the average U.S. household belongs to more than 14 loyalty programs. CardStar, launched a mobile app in 2009 for the iPhone, that has recently surpassed 1 million downloads and has been used more than 5 million times. The app, allows users to input their loyalty and reward card information on their mobile phones, which can then be scanned at the point of sale (checkout counter).
Not only can the app be used for reward programs for pharmacies, airlines, hotel cards, and grocery stores, it can also be used for gym memberships and library cards (with over 400 companies).
There is little competition in the market for mobile app loyalty programs at this time as there are a number of issues related to scanning the phones. CardStar uses technology called “SyncScan”, which enables it to work with most merchants using standard laser-scanners. However, things like fingerprints, lighting, and screen protectors can still cause issues.
The CardStar app collects a lot of consumer data – they are able to gather data on purchase habits of the consumers who use the app with credit or debit cards. CardStar is able to not only target consumers based on the data they collect, they are also able to perform predictive modeling. For example, a person who lives in New York City and has CVS, Best Buy, Sephora, and New York Sport Club cards, CardStar is able to determine the user is most likely a female, between the ages of 25-40. Using smart phone’s GPS capabilities, they are able to determine where the users most likely live and work(general regions).
In addition to modeling and data analysis, they plan to allow retailers to specifically target consumers with coupons and other forms of direct marketing. Other marketing and advertising opportunities are beginning to appear as well. Chase recently signed a deal to place advertise in the CardStar application to promote their Chase Freedom card.
The application is currently not available for Android or BlackBerry devices, but it should be coming soon.
