Today's story by MMS Mumbai Multimedia Studio's got me thinking about the history of loyalty programmes. After some digging, I found that loyalty programmes go as far back as the 18th century. In fact, according to a 1971 New York Times article by James J Nagle, a merchant in New Hampshire issued ‘copper tokens’ as rewards to his customers in 1793. The tokens encouraged the customers to keep coming back for future purchases—the core tenet of loyalty programs.
That merchant would be amazed to see that his idea is still alive and kicking, even as retail has evolved in ways he could never have imagined. Every business in town, offline or online, now touts a loyalty program, but here is the thing—even after 200 years, loyalty programs are hard to crack.
Just ask Walmart-owned Flipkart in Indian Online Shopping
In 2014, well before its competitor Amazon launched its paid subscription service Prime, Flipkart had a paid loyalty program called Flipkart First. Users could buy a subscription to Flipkart First in return for benefits like free and fast deliveries, access to streaming services, etc. But only 3% of its users were members. The idea was too ahead of its time.
Still, it was not done with the idea. Three years ago, it changed tack and switched to an earned loyalty programme called Flipkart Plus. And much like the New Hampshire merchant's copper tokens, Flipkart had 'Supercoins.' One had to first earn these coins, after which they could use them to avail services from a clutch of online and offline stores, as well as for discounts on products sold on Flipkart.
Flipkart wanted to make sure that not everyone became a Flipkart Plus member—it had to be an exclusive club for the economics to make sense for Flipkart. But in a bid to do that, it has erected probably one too many barriers. When our correspondent visited a Flipkart partner store that accepted Supercoins, a sales representative said this: “Pre-lockdown the outlet had a poster advertising it, but since reopening, they have taken it down,” he said. “We are also not sure how this scheme works. Most of the customers asked but they themselves did not know how to redeem this offer and we also don’t know."
For Flipkart though, this loyalty program is top priority as Flipkart CEO stated in Walmart's February earnings call. Read today's ground-up story to get a sense of what doesn't add up with Flipkart Plus and why the company still needs to plough ahead with this 200-plus-year-old idea.. #yusufbhandarkar www.multimediastudio.net
