What are the inherent issues in the traditional shopping and rewards system from the merchant and customer's perspective?
Well, as per my understanding, the traditional shopping and rewards system has been more of a calm ocean to navigate lately. Its really getting outdated and is currently full of flaws that need to be eradicated once and for all. More or less, the rewards have lost their true meaning and customers barely even use them. Its not just the customers, even the merchants are not getting any significant benefits from the traditional reward system.
First things first, lets talk about the problems faced by the customers due to a traditional reward system.
The customers are now tired of the absurd offers that are bare of any use to them. They are tired of overspending just for the sake of little returns or no returns at all on their shopping. One major problem is that every merchant or retailer today is offering his own loyalty card programme which is redeemable only at one retail store. For example, getting some reward points at a fitness club wont buy your bread at the local bakery store. So the point is, it imposes restrictions upon the customers and limits their profitability. Apart from that, theres a lack of transparency between the customers and the merchants as there is no robust means of two-way communication between the two. As a matter of fact, over 70 percent of the customers dont even use their reward coupons and they just expire.
This was about the customers. But as it turns out, even the merchants are suffering when it comes to the traditional reward system. To attract new customers, they usually have to pay a large sum of money in terms of bank fees on PoS devices, credit card acceptance fees etc. Then, there are all sorts of marketing fees involved for printing and distributing flyers, leaflets, media, newspaper and radio advertisements. Besides, the merchants also face a cut-throat competition from the local shopping malls, retail conglomerates, online e-commerce and now mobile commerce. Although there can be an effective mobile solution to control all these different types of costs but most of the merchants and businesses refrain from adopting mobile solutions. The reasons are simple. The costs of developing an app are exorbitant and theres also an intense competition from the mobile commerce giants. But imagine if you can list your business on a mainstream shopping and rewards app with a massive user base and backed by thousands of other merchants? Are things going to be pretty easy right? Thats the difference SUBAJ is going to bring into the lives of merchants and customers.