Mobile Payments

Australia: Woolworths integrates rewards with Apple Wallet

We continue to see, albeit slowly, the mobile loyalty future unfold as more retailers integrate their loyalty programs with mobile wallet platforms. The big question, of course, is whether to go solo with your proprietary loyalty app – as many big retailers have done – or to integrate your loyalty program with a device-centric mobile wallet such as those offered by Apple and Android. Now that Australian grocer Woolworths has announced that they’ll integrate their loyalty program with Apple Wallet, we’ll soon have another case study to answer the question of which mobile loyalty approach is better – the walled garden, or the open field?
By Rick Ferguson

One year after revamping its troubled loyalty program – it’s third program iteration in a year – Australian grocer Woolworth continues to refine the program with new initiatives. In its latest move, the company announced that its 10 million-member-strong Woolworths Rewards program into Apple Wallet. Beginning in mid-October, members will be able to earn and redeem rewards points through their iPhones, a move that Woolworths hopes will make for a more frictionless loyalty experience for iPhone users. Money quote from Woolworths’ head of digital and payments Paul Monnington courtesy of the Australian Financial Review:

“They don’t have to carry their physical card around, it’s much easier when they tap their phone, they can look at their balances and know when they can get their $10 off – there are a number of different benefits for the customer. We’re looking at creating a better shopping experiences for customers. We believe it could lead to personalised seamless experiences.”

Exactly when the move will “lead to” those personalized experiences is an open question, of course, as is how many Woolworth’s shoppers own iPhones. Given that Apple has an estimated 44 percent market share of smartphone sales in Australia, however, that share still represents, in theory, over 4 million Rewards members who will be able to take advantage of the Apple Wallet integration. With Woolworths already accepting Apple Pay at most retail locations, the move to integrate Rewards was a logical next step for the retailer, which seems to be hitching its wagon to Apple.

The move also gives us pause to marvel at how interconnected the retail, smartphone, and financial sectors have become. With Woolworths’ move, Apple’s iOS platform scores a minor victory over market leader Android in Australia. It also tips the scale in Apple’s favor in its battle against Australian banks over access to Apple’s near-field communication (NFC) technology; Apple wants total control over its phones’ NFC platform, while Aussie banks want access to it so they can build their own mobile wallet apps. The move also strengthens Woolworths’ position against Coles and its FlyBuys program.

The common thread binding all of these moving parts? The loyalty program. In the battle for market share among retailers, banks, and device makers, loyalty marketing has become the tail that wags the dog. As the alliance between Woolworths and Apple plays out, the only clear winners so far are Woolworths’ customers with iPhones – and when your customers win, you know you’re on the right track.

Rick Ferguson is Editor in Chief of the Wise Marketer Group and is a Certified Loyalty Marketing Professional (CLMP).

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