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Deepening consumer loyalty in different ways using open banking


Back in February 2020 Bank of America estimated that Amazon had about 44% of U.S. ecommerce market share. The market share in the UK for 2019 around the same time was estimated at 30% according to a report from Edge by Ascential. This was of course before Coronavirus which has seen a marked increase in home deliveries.


The knowledge and data that can be accumulated by Amazon on peoples spending habits is unquestionably granular and does provide benefits in terms of targeted marketing creating value added for consumers. Given Amazon’s market share consumers are clearly happy for their data to be used positively for their own customer experience.


Open Banking is there to provide similar benefits to consumers allowing consumers to link their bank accounts to value adding service providers who can provide offers and discounts based on their expenditure. The benefits that Amazon can bring consumers to can be replicated and enhanced across non ecommerce spending using Open Banking. Areas such as hospitality and groceries an generate great untapped benefits here.


At AirFunders our goal is to allow consumers and merchants to meet in a way that allows both sides to benefit from the increasing take up of Open Banking. The flexibility that open banking affords to merchants in terms of incentivising their best customers or targeting specifically lapsed customers or other segments can be valuable in driving incremental increases in sales. Consumers being paid for their data being used positively.  Presenting such opportunities to consumers delivers a win win situation if those consumers are incentivised.


Traditional cash back offerings rely very much on links to bring consumers into an affiliate style relationship which are hugely valuable and allow consumers to build up cash back balances. Where purchases are going to be made then it makes great sense to utilise links to generate benefits.

Having said that cash back can get lost within someone’s overall finances and generating cashback that can deliver real long-term benefit can compound the actual benefits that cash back rewards can offer.


Social and environmental benefits also start to resonate here with millennials, who are of course the future for brands be they online or on the high street. The younger generation want brands to be focused on environmental and social issues. What is a brand doing to resonate with their customers that incentivises their customers in this positive manner?


Take BrewDog for example. Now carbon negative, removing twice as much carbon from the environment than they emit. This is an environmental customer loyalty reward for their customers. Those customers do not actually receive the reward but are left safe in the knowledge that their custom has delivered a community reward that they can be proud of.


Putting together all the aspects of data, consumer loyalty and rewards, be they targeted advertising, cash back or a social/environmental community reward, retail is changing to become more targeted and rewards driven. The high street shopping experience may have to adapt to fit into rewarding customers in different ways rather than just relying on foot fall and their own loyalty programmes.


Open banking can provide merchants a new way of linking customer loyalty to environmental and social rewards rather than just cash back and discounting. I would love the opportunity to explain AirFunders take on this if anyone has any questions and if you want to help us help you as an individual, click this link.

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