New York City baker Eileen Avezzano says she has a better way than Groupon Inc. (GRPN)’s online deals to entice customers to buy her cheesecakes again: She doles out loyalty cards that reward buyers for return visits.
The cards, designed by Cartera Commerce Inc., are digital instead of physical, and are linked to credit cards consumers already use. They let merchants provide a discount, or a reward such as airline miles, every time consumers buy. A shopper may swipe a card, and a retailer will automatically deduct some money off the bill.
Businesses like Avezzano’s can use the programs to collect data on when customers shop, how often they return and how much they spend -- way beyond the scope of old-fashioned paper punch cards. That can make them even more valuable than coupons from Groupon and LivingSocial. About 900 million transactions will be conducted with cards connected to merchant loyalty programs in 2015, generating $1.7 billion in revenue for the providers, Aite Group LLC estimates. That’s up from $300 million in 2011.
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