In an era where digital transformation is paramount, the aviation industry is not left behind. Traditionally, airline loyalty programs were confined to frequent flyer miles and associated credit card points. However, with the advent of digital wallets and smartphone apps, a new horizon in customer engagement and loyalty is emerging. This article explores how these technologies are reshaping loyalty programs, making them more accessible and beneficial for both airlines and passengers.

 

Evolution of Airline Loyalty Programs

The digital age has brought a paradigm shift. Earning points has evolved from mere flying to online affiliate-tracked partners and now, to point-of-sale retail counters. The integration of QR codes and sophisticated app technologies has dissolved the barriers once imposed by the need for expensive hardware. Now, a simple smartphone in the customer’s pocket and a standard tablet on the retailer’s side can turn any purchase into a loyalty point, redefining the concept of ‘earning miles’.

 

Key Examples of Retail Point-of-Sale Partnerships in Australian Airline Loyalty Programs:

  • Singapore Kris+ in Australia (Sydney and Melbourne): This app’s partnerships span a diverse range of businesses, including cafes, restaurants, bespoke tailoring services, recreational activities, and Melbourne airport’s Skybus service. Users can earn points and access discount offers through these collaborations.
  • Qantas and Accent Footwear: This partnership allows Qantas Frequent Flyers to earn points (and soon redeem) at over 670 stores, including popular brands like The Athlete’s Foot, Platypus, Skechers, Stylerunner, and Hype DC. This initiative is particularly geared towards a younger demographic. Besides Accent Footwear, Qantas has partnerships with BP Rewards and Hoytz, offering both earning and redeeming points opportunities at the point of sale.
  • Virgin Australia: Virgin has an earn-and-redeem partnership with 7-Eleven petrol stations and a redemption-focused partnership with Myer department stores, enhancing its loyalty program’s value and reach.

 

Impact of Bypassing Traditional Payment Rails

By creating their own payment and loyalty ‘rails’, airlines are moving away from traditional systems like Visa and Mastercard. This independence reduces costs and gives airlines direct control over their loyalty programs, enabling them to collect more customer habit data. This leads to a more tailored, flexible rewards system, potentially increasing customer retention and satisfaction.

 

Future Trends and Conclusion

As airline loyalty programs continue to evolve with digital technology, the benefits extend beyond more accessible rewards. These advancements offer airlines deeper insights into consumer behaviour. The integration of app-based solutions marks a significant leap in airline customer engagement, heralding a future of enhanced convenience, personalisation, and loyalty.

 

Reduced rollout costs mean more competition for loyalty engagement

While this technology reduces the costs of rollout and widens the retail partner footprint for popular coalition loyalty programs like Qantas, Velocity, and Krisflyer, it means other programs can also easily offer this system like Flybuys or Hilton, Accor and other international airlines and even Mecca’s Beauty Loop loyalty program may not be out of the question, leading to a future where point-of-sale retailers/cafes/restaurants might have multiple partnerships and terminals.

The result is a diverse retail environment where point-of-sale retailers may host multiple loyalty programs, giving customers a choice in their preferred loyalty scheme.

This raises a crucial question: As this technology becomes ubiquitous, how will it shape the landscape of customer loyalty and retail partnerships as every program starts to cross lanes to chase consumer engagement?

 

Article by Steve Hui