Groupon challenged by startups

In Loyalty & CRM, Marketing and Sales by Simon Crompton-Reid

Groupon challenged by startups Some retailer believes that there is a better way than Groupon's online deals to entice customers to return. New York City baker Eileen Avezzano says she doles out loyalty cards that reward buyers for return visits.

The cards are digital instead of physical, and are linked to credit cards consumers already use. They let merchants provide a discount, or a reward every time consumers buy. A shopper may swipe a card, and a retailer will automatically deduct some money off the bill. Businesses like Avezzano's can use the programs to collect data on when customers shop, how often they return and how much they spend.

About 900 million transactions will be conducted with cards connected to merchant loyalty programs in 2015, generating $1.7 billion in revenue for the providers, Aite Group LLC estimates. That's up from $300 million in 2011.

"I see them going head-to-head," said Peter Krasilovsky, a vice president at researcher BIA/Kelsey. "It's an evolution of the deals space. The goal is to go beyond new customer acquisitions and become part of the integrated business of merchants."

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