British department store Harvey Nichols exemplifies the future of loyalty programs with a new mobile rewards application designed to better serve its customers.

After surveying its customers, the retailer took note that an overwhelming 80 percent said they are interested in a mobile rewards program rather than a physical card. To better drive sales, Harvey Nichols followed what its customers wanted.

“Harvey Nicols’ decision to launch its loyalty program on an app makes sense, as most luxury consumers own a smartphone and are tech savvy,” said Ken Morris, principal at Boston Retail Partners. “Consumers’ phones have become the preferred way to interact and shop with brands, as evidenced by comScore’s research finding that today’s consumers spend 50 percent more time browsing the Internet on their phones than desktop-based computers.

“In addition to shopping, mobile phones will soon be the preferred vehicle for payments and receipts,” he said.

Premium program
Customers must download the rewards app to become apart of the program. Every time a purchase is made, users open the app and scan the bar code at checkout to acquire points.

Rewards from the program have a vast range, from free botox treatments to Champagne dinners at formal restaurant OXO Tower, as well as in-store vouchers. Harvey Nichols updates the rewards four times a year, coinciding with the quarterly reviews.

There are different tiers based on the spending brackets that customers are in, such as Silver, Gold, Platinum and Black. In addition to the rewards earned, the retailer will provide surprise deals and gifts throughout the year.

For Harvey Nichols, it is important to offer loyal customers a variety of prizes rather than the traditional in-store rewards. The department store wants to stand out from other retailer rewards programs and offer more incentive to spend with Harvey Nichols.

Points are rewarded for spending at any Harvey Nichols location, as well as online and its bar or restaurants.

The mobile rewards program is a faster and more convenient method for customer checkout. Members no longer have to fumble in their wallets to find the loyalty card, for Harvey Nichols customers, it is located right on their phone.

The simple checkout process allows for the department store to have a more effective purchasing procedure, which can drive up sales and increase customer relationships. Listening to what customers want is a better solution for Harvey Nichols as it creates a more likely environment for consumers to engage.

Future of rewards
Harvey Nichols is not the only retailer cognizant of the benefits of a mobile rewards app.

Save Mart Supermarkets’ Save Mart and Lucky stores also launched a mobile application that integrates rewards with a program that simplifies the in-store shopping experience by allowing customers to plan meals, keep shopping lists and check for advertised items and coupons all before they shop (see more).

Also, Golf’s PGA Tour launched a mobile rewards program that lets fans earn points by checking into a tour event, sharing content, selecting favorite players, viewing scorecards or signing up for fantasy golf tournaments that can be redeemed for gift cards to major retailers or a charity donation (see more).

“Since 80 percent of Harvey Nicols’ customers indicted that they preferred an app to a traditional loyalty card, it appears that the loyalty app will be well received by its customer base,” Mr. Morris said. “Using a mobile app will simplify the Harvey Nicols loyalty program and eliminate the need for consumers to carry another card in their wallet.”

Final take
Brielle Jaekel is editorial assistant at Mobile Commerce Daily