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The wait is over: Why real-time redemption makes loyalty better

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The wait is over: Why real-time redemption makes loyalty better

Julian Wallis, Retail Director at Rambus

These are challenging times for brick-and-mortar merchants. Across the world’s top 250 retailers, the average annual rate of revenue growth has declined by almost 50% in the past 10 years.

Julian Wallis

Julian Wallis

As retailers work to reverse this trend, it is clear that improving the delivery of value-added services (VAS) such as loyalty and rewards programs can create significant advantages. VAS program members can contribute between 12-18% more revenue than non-program members. It is also far more efficient to retain existing customers than attract new ones, and loyalty and rewards are integral to increasing consumer lifetime value (LTV) by incentivizing important repeat custom.

In the battle to enhance the effectiveness of VAS programs and keep consumers engaged in a hugely competitive market, real-time redemption is emerging as a powerful tool.

Ending the waiting game – making VAS work better

Although VAS programs can undoubtedly be effective, many consumers are demonstrating signs of ‘loyalty fatigue’.

For example, the average U.S. household is registered with 29 loyalty programs, billions of dollars’ worth of reward currencies lie dormant, and over half of loyalty participants do not actively participate.

A significant factor behind this ‘loyalty fatigue’ is that it simply takes far too long to generate any meaningful rewards, so consumers quickly lose interest. This is because loyalty and rewards programs have traditionally emphasized repeat custom over a long period of time. Buy 10 coffees and get the 11th free.

The problem is, if I only visit the coffee shop once a week as a weekend treat I’m not going to see a return on my loyalty and investment for a long time. Without an incentive, there are plenty of other places out there for me to try.

Demographic shifts only add to the challenges for retailers. Younger consumers are more willing to shop around compared to previous generations, and the on-demand economy means there is an expectation of instant gratification.

To get ahead of the game, VAS programs need to be easy to access, available to use on-demand and appeal to the user’s immediate needs. For example, I’m probably not that interested in a free coffee in three months’ time, but I could just be tempted with a half-price muffin right now.

Real-time loyalty redemption

This is where real-time redemption comes in.

Consumers receive their rewards and loyalty coupons instantaneously at the point-of-sale and can use them for that purchase, rather than having to wait until the next visit.

It really works. Consumers who receive rewards instantaneously spend up to 25% more compared to traditional redemption models, and 55% compared to using no loyalty scheme at all.

Digitization is the key

Making real-time redemption work with existing loyalty collateral, such as plastic cards or paper coupons, can pose challenges and create complexities.

The good news for retailers is that the underlying technology to enable simple, effective real-time redemption at scale is already out there via mobile wallets. But multi-function mobile wallets are where the value really lies.

For example, mobile scan-and-go already makes the in-store shopping experience simpler, faster and more convenient by enabling consumers to easily scan their items with their smartphone as they shop, and then checkout in-aisle with an in-app purchase.

But adding real-time redemption takes the scan-and-go buying experience to the next level, making it easy for consumers to earn points, rewards and coupons, and then use them for that purchase.

Solutions that also provide a split payment function, allowing consumers to pay with a mix of credit, points and coupons in a single transaction, further boost flexibility and convenience.

Real-time at the right time

An important part of real-time redemption is not only that the rewards are instantaneous, but that they are delivered at the right time.

With store branded scan-and-go wallets, consumers are already engaging with their smartphone to scan the products – enabling retailers to push contextual rewards, promotions and offers directly to the consumer as they shop.

This helps build valuable repeat custom and drives higher average spend per visit, key to helping boost the average revenue per user (ARPU).

The future of loyalty

Real-time redemption enhances the effectiveness of loyalty and rewards programs. In a competitive and challenging landscape, retailers who move quickly can gain significant advantages. Mobile scan-and-go, therefore, can be used as a key enabling technology by retailers to accelerate deployments of real-time redemption and get ahead of the innovation curve.

For a deeper dive on how mobile scan-and-go technology can deliver increased revenues, an enhanced customer experience and optimized operational efficiencies, download the Rambus white paper.

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ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion

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ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion 1

(Reuters) – Exxon Mobil Corp said on Wednesday it would sell its non-operating interest in its UK and North Sea exploration and production assets to private-equity fund HitecVision for more than $1 billion.

Exxon has been looking to sell its oil and gas assets since late 2019, seeking to free up cash to focus on a handful of mega-projects.

The deal includes ownership interests in 14 producing fields operated primarily by Shell as well as interests in the associated infrastructure. Exxon could also receive about $300 million in contingent payments based on a potential for increase in commodity prices.

Exxon’s share of production from these fields was about 38,000 barrels of oil equivalent per day in 2019, the company said.

Exxon said it would retain its non-operated share in upstream assets in the southern part of the North Sea as well as its interest in the Shell Esso gas and liquids (SEGAL) infrastructure, which supplies ethane to the company’s Fife ethylene plant.

HitecVision, in partnership with Eni, had bought Exxon’s Norwegian North Sea assets for $4.5 billion in 2019.

Initially, Exxon hoped to raise more than $2 billion from the sale, which was planned for late 2019. In June 2020 sources told Reuters that the portfolio was more likely to fetch $1 to $1.5 billion given the oil price weakness last year.

(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D’Silva)

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JPMorgan’s blockchain payments test is literally out of this world

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JPMorgan's blockchain payments test is literally out of this world 2

By Anna Irrera

LONDON (Reuters) – Stuck in space with bills to pay? Don’t worry, the satellites could take care of it.

JPMorgan Chase & Co has recently tested blockchain payments between satellites orbiting the earth, executives at the bank told Reuters, showing that digital devices could use the technology behind virtual currencies for transactions.

The so-called Internet of Things (IoT), where devices connect to one another, is most associated with consumer electronics, including smart speakers like Amazon Echo and Google Home, and banks want to be ready to process payments when these smart devices start doing transactions autonomously.Umar Farooq, the CEO of JPMorgan’s blockchain business Onyx, thought space was a cool place to try it out.

“The idea was to explore IoT payments in a fully decentralised way,” Farooq said. “Nowhere is more decentralised and detached from earth than space.”

“Secondly we are nerdy and it was a much more fun way to test IoT,” he said.

To run the space experiment, the bank’s blockchain team did not send its own satellites into space, but worked with Danish company GOMspace, which allows third parties to run software on its satellites.

Farooq said the satellite test showed blockchain networks could power transactions between every day objects.

The test also showed it could be possible to create a marketplace where satellites send each other data in exchange for payments, as more private companies launch their own devices into space, Tyrone Lobban, head of blockchain launch, at Onyx said.

Back on earth, examples of IoT payments that could become a reality sooner include a smart fridge ordering and paying for milk on an ecommerce site, or a self-driving car paying for gas Farooq said.

Blockchain, which first emerged as the software underpinning cryptocurrencies, is a shared digital ledger of transactions. Financial companies have invested millions of dollars to find uses for the technology hoping it can reduce costs and simplify more complex IT processes, such as securities settlement or international payments.

But so far, blockchain has yet to have widespread impact in financial services.

JPMorgan has been one of the most active banks in blockchain, announcing it had created its own distributed ledger called Quorum in 2016, which was sold to blockchain company Consensys last year. The bank also developed a digital coin called JPM Coin and in 2020 created Onyx.

Onyx has more than 100 employees and its blockchain applications are close to generating revenues for the bank, it said.

Among the division’s applications is Liink, a payments information network involving more than 400 banks, a project to replace paper checks and IoT experiments, Farooq said.

(Reporting by Anna Irrera. Editing by Jane Merriman)

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Garment workers in Thailand receive full compensation after wages expose

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Garment workers in Thailand receive full compensation after wages expose 3

By Nanchanok Wongsamuth

BANGKOK (Thomson Reuters Foundation) – Garment workers in Thailand who were illegally underpaid while making products for major brands have received all the wages owed to them after theme park operator and film producer Universal Studios agreed to pay the outstanding amount.

Universal Studios, owned by media giant Comcast Corp’s NBCUniversal, agreed to give $20,000 to a group of Myanmar workers on Wednesday – following three other global brands in making payments to settle the 3.5 million baht ($116,550) owed in unpaid wages.

“We take this matter very seriously and this is not in line with our core values,” a NBCUniversal spokeswoman said.

A Thomson Reuters Foundation investigation in September 2019 found dozens of migrants from Myanmar working at several factories in the western region of Mae Sot were paid less than the daily minimum wage of 310 Thai baht ($10.32).

A group of 26 workers at one of the factories raided in 2019 by officials sued the owner – Kanlayanee Ruengrit – in August last year for failing to pay the 3.5 million baht owed to them.

Interviews with workers by local and global rights groups found that her factory was making goods for several major brands from Universal Studios to Britain’s largest supermarket Tesco.

The workers later received a payment of about 2.88 million baht from Kanlayanee and three brands that said Kanlayanee’s factory had been subcontracted by their suppliers or partners without permission – Disney, Starbucks and Tesco.

The money from Universal Studios will be paid to MAP Foundation, which has supported the workers and been in discussion with the companies, and will distribute the funds directly to the workers.

“Since the former licensee has failed to respond to multiple requests to pay the affected Thai factory workers, we are making a goodwill donation to MAP Foundation … to distribute funds directly to the workers,” the NBCUniversal spokeswoman said.

Suchart Trakoonhutip, a coordinator at MAP Foundation, said the payment marked the first time that underpaid workers in Mae Sot had received the full amount owed to them in a wage dispute.

The Mae Sot case sets an example for other brands to follow in terms of taking responsibility, but workers should not have to rely on the goodwill of companies in order to receive money they have earned, said Ilona Kelly, a coordinator at pressure group Clean Clothes Campaign.

“The industry urgently needs binding agreements to hold brands to account, the lack of which has become even more notable during COVID-19 as millions of workers are now owed wages and severance pay,” she added.

“Without (government) legislation, the happy ending of the Kanlayanee story will continue to be as unobtainable as a fairytale ending for most workers.”

One of the Kanlayanee workers, who now works part-time on a farm, told the Thomson Reuters Foundation that he plans to send the additional money to his sick father in Myanmar.

“I feel happy and proud that I will soon receive the full amount of money I am owed,” said the worker, who spoke on condition of anonymity due to the sensitivity of the matter.

($1 = 30.0300 baht)

(Reporting by Nanchanok Wongsamuth @nanchanokw; Editing by Michael Taylor. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

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