Digital Receipts: Making More from Loyalty
In a world which is going digital at such a rapid pace - from paperless meter readings and utility bills to mobile shopping coupons - it is surprising how little traction digital receipts have had yet, according to Benjamin Chilcott of Concise (part of Iris Worldwide), who suggests that this lack of adoption is about to change on a grand scale.
Everyone knows about Apple and its till-free, paper-free, mobile payment experience. But, until very recently, Apple was almost the only retailer people could name when it came to issuing digital receipts.
Retail consultancy Enova recently researched this subject and identified digital receipts as one of the trends that is likely to grow exponentially in the next few years. But what Enova also found is that the digital receipt itself is only the tip of the iceberg of the benefits and opportunities brought about by going paperless at the till: data capture, big data, CRM, loyalty, and ultimately, customer satisfaction, are the bigger prizes.
More and more retailers are adopting digital receipts. The process is simple: customers are identified at the point of purchase through an email, a postcode, a loyalty card, or any other unique identifier, and can opt to receive a digital version of their receipts in their inbox or any other digital place such as the retailer's app or web login. The digital receipt is generated and sent in real time, and contains purchase information in the same form as a standard paper receipt, as well as any other information that the retailer may want to share with their opted-in customers.
Digital receipts are much more broadly penetrated in the US than elsewhere. By the beginning of 2013, one third of US retailers were reported to be offering their customers the option to receive digital receipts. Players as diverse as Nordstrom, Best Buy, Whole Foods Patagonia, Anthropologie and Kmart offer paperless receipts to their customers across the pond. Wal-Mart recently announced that they were rolling out text electronic receipts instead of a loyalty programme, which will go a long way educating consumers in the US and overseas.
Customer benefits
The benefits for customers are easy to understand: there's no paper to fiddle with, it's a receipt that's not easily lost, and of course there's a positive environmental impact. According to e-receipt company allEtronic, paper receipts are responsible for 9.6 million trees being cut down each year in the US alone. In the UK, paper receipt production produces as much CO2 as would 75,000 cars driving day and night for one year.
And there's also something about the security of knowing that a purchase has been recorded, making return processes and warranty registrations a much smoother process.
Business benefits
Thinking about the advantages for retailers, it is surprising that digital receipts have not already been pushed into the market by more retailers. The ecological and practical arguments work both ways: in the age of CSR, any step to improve sustainability credentials is welcome; as for not having to worry about customers who've lost their receipts for the purpose of returns or warranties, it's as much a benefit for businesses as it is for customers.
More importantly though, from the retailers' point of view, a digital receipt is another communication channel. In fact the best digital receipts are not just digital copies of their paper counterpart; they offer value-added branding imagery, information and even offers. According to an Experian report in 2013, "early trends for e-receipts show higher open rates and revenue per email than bulk promotional mailings, and e-receipts with up-sell and cross-sell features have the highest click and transaction rates" (enhanced e-receipts generate 600% higher click-through rates, and an overall revenue per email 360% higher than their basic counterparts).
However, the most important benefit for businesses is that digital receipts are all about data.
First, they involve customer data: suddenly there is an increased incentive for store staff to collect, and consumers to reveal, their email addresses. At MotherCare, which recently rolled out digital receipts in partnership with yReceipts, email capture increased 18-fold following the rollout of the solution. Customers can then be linked to their profiles and history from the CRM or loyalty scheme, and suddenly stores regain an advantage that had until now been reserved to websites - knowing who they are talking to, what these customers have done in the past and how they can serve the customers better. In fact, there is a strong argument to say digital receipt technology will, over time, replace card-based loyalty schemes.
Second, digital receipts allow the capture and linkage of transactional data. Until digital receipt software came along there were only expensive and cumbersome ways of gathering, analysing and linking, in-store SKU-level transactional data. Basket composition or share of wallet exercises required to either pay for credit card companies data and extrapolate, or customer surveys. That data is a jewel in itself, and for many other parts of the organisation: CRM, loyalty, analytics in particular. According to Alex Kayser, co-founder of yReceipts, "Digital receipts provide a new way for retailers to capture customer and transactional data. With yReceipts shoppers control whether or not they'll receive additional marketing communications after having received their digital receipt". As Ryan Davies, head of loyalty and CRM at MotherCare told us about his yReceipts implementation, "There came a point when our stores started generating more data than our website. The yReceipts deliver customer visibility and data capture capabilities that replaced traditional swipe card-based loyalty schemes and helped us to increase in-store customer data capture eighteen-fold."
How digital receipts work
There are lots of ways in which digital receipts can work. Customers identification can be done verbally at the till (staff assistant asks for a postcode or an email address), on the go (scanning barcodes through mobile tills), or at the payment stage. For example, mobile payment solution Square can link credit cards to profiles, and Wal-Mart's implementation allows customer to enter their mobile phones straight into the debit card reader at checkout.
There are several ways the technology can work for retailers: hardware at the till, software with or without integration to the EPOS system, or a link to an existing loyalty scheme.
"What we have observed is that many of the new solutions on the marketplace are cheap and some, easy to implement, especially when compared to standard e-commerce and IT costs and timelines," concluded Chilcott. "This may well change as the market matures but in the meantime, we believe retailers are about to make that discovery, and that digital receipts will be one of the trends whose speed will catch us all by surprise."
Sources: Concise; Iris Worldwide / The Marketing Factbook.
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