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Digital Loyalty Programs for FMCG: Receipt Scanning or Unique QR Codes?

FMCG loyalty program receipt scan

As we discussed in our How FMCG Brands Can Increase Customer Loyalty article, digital loyalty programs for FMCG make customer engagement a breeze for brands that sell their products through intermediary retailers.

With an app-based digital loyalty program, FMCG brands can collect customer data which intuitively creates tailored offers and develops a personalised customer experience.

However, none of this matters if the customer can’t be bothered going through the rigmarole of validating their points to earn rewards.

Think of any time you’ve spotted products in a supermarket with competition promos on the packaging, only to read the instructions and learn that entrants need to:

  1. Buy the product
  2. Cut out the barcode and keep it somewhere safe
  3. Collect 10 barcodes
  4. Put the barcodes in an envelope along with your contact details
  5. Send the envelope in the mail
  6. Wait six months to find out whether you won the competition or not

Okay, perhaps those days are behind us now, but you get my point!

You can have the most enticing loyalty program in the world but if you make it too difficult or tedious for customers to participate, they won’t bother. That’s where digital loyalty apps come into play.

There are two innovative ways an FMCG brand can go about digitally validating its customers’ points and rewards: Receipt Scanning and QR Codes.

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How does receipt scanning work?

Receipt Scanning Loyalty Technology

Receipt scanning uses advanced technology to convert customer receipts into data, which is useful for various applications.

For the sake of customer retention, acquiring data from receipts provides actionable consumer insights, which then allows FMCG brands to deliver enticing rewards. Receipt validation software can analyze the data on customer receipts and automatically upload it to a rewards platform database.

This solution doesn’t require any point-of-sale integration, which makes it incredibly easy to implement across numerous distribution channels and multiple locations.

The data collected from receipts is invaluable to gaining insights into consumer behaviour. It allows FMCG brands to segment their consumers into groups. For example:

  • VIP customers
  • frequent customers
  • infrequent customers
  • lapsed customers
  • seasonal customers

By breaking your customer base down into these categories, you can directly engage with your most important customers (the VIPs) while incentivising other customers to move up the value chain from infrequent to frequent, frequent to VIP and so on.

While the process of acquiring customers’ receipts and taking the relevant data from them used to be tedious and complicated (for both the brand and the end-consumer), mobile phones have now become ubiquitous.

digital engagement on mobile device

Smartphone cameras are extremely powerful these days, and a digital loyalty app makes it incredibly easy for customers to scan and send their receipts through the app.

On the brand’s side of things, each receipt can either be processed automatically with OCR (Optical Character Recognition) or done manually by an employee… this depends on the size and scope of the brand.

So, what are the benefits of receipt scanning loyalty technology?

  • relatively user-friendly process for most consumers
  • quick, easy and fairly inexpensive for the brand to implement
  • very versatile system, where changing terms and conditions or limited-time promotions can be quickly added and subtracted from the program
  • low administration costs, as receipts can be processed with OCR (apart from the odd receipt here and there that might be difficult to read and require manual review)
  • highly secure, as rules can be digitally applied to the receipts
  • captures rich data insight (who, what, when, how much, where, what else, and so on)
  • instant communication direct to the consumer’s pocket via text, email, social media and in-app push notifications

Perhaps you could argue that there is one disadvantage to receipt scanning: it requires your customers to have mobile devices.

Obviously we wouldn’t expect too many FMCG brands to have the vast majority of their customers live deep in the Amazon rainforest or in Amish communities! However, perhaps your target demographic is elderly people who perhaps might find the receipt scanning method confusing or complicated.

In this instance, you could ask your customers to send in their receipts, or perhaps consider a web-based solution as an alternative to an app. Stamp Me Loyalty Solutions can provide this for you – feel free to get in touch for more information on alternative digital loyalty programs for FMCG producers.

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How does the unique QR code method work?

track FMCG products with QR codes

Image Source: Medium

Many FMCG brands are gravitating towards QR codes, for numerous reasons.

For instance, it helps brands track where their high-volume distributions end up, thus allowing them to assess the brand’s overall environmental footprint. Another reason for printing them onto the packaging of products is to encourage the end-customer to scan the code and accrue loyalty points towards a reward.

The digital process of the QR code validation method is very similar to receipt scanning, in that the customer uses the loyalty app to scan the unique QR code and send the data to the brand. However, unlike receipt scanning, the FMCG producer can place this QR code anywhere that seems appropriate.

It can be printed on the inside of the product’s packaging, stuck on like a “peel and reveal” sticker, or simply handed to the customer at the point of sale (although this third method would require cooperation from the intermediary retailers, whereas the first two options are completely independent).

McDonald’s, one of the world leaders in marketing, has been using the “peel and reveal” technique for decades with its Monopoly campaigns. You canread more about McDonald’s highly effective customer retention strategies here.

What are the advantages of placing unique QR codes on products for customers to scan?

  • it’s very simple for the customer to engage, provided they download the app
  • not only does this validation method facilitate points accrual and rewards redemption, but it can also be used to push gamified aspects of the program like Scratch & Win instant prizes and so on
  • faster and easier validation than receipt scanning
  • this method is highly secure, as each QR is code is “burned” once scanned, and cannot be scanned again – the code won’t scan if it’s no longer in the system, which makes fraud all-but impossible
  • as with receipt scanning, the QR code method facilitates instant communication direct to the consumer’s pocket via text, email, social media and in-app push notifications

What are the disadvantages?

  • while QR codes still capture valuable data, receipts offer more of an insight into customer behaviour
  • each code needs to be printed and disseminated to customers somehow, which requires a lot of design, production, logistics and so on

The process for creating these QR codes varies from brand to brand, because it ultimately depends on how the QR code is attached to each individual product. For instance, will you print it on the inside of the packaging, or manually “stick” it onto each item in a way that it remains concealed until the end-customer opens it?

There are numerous possibilities for how a brand goes about this step. One of Stamp Me’s partners adopted an innovative technique for engaging its loyalty program members with QR code technology.

QR Codes in practice, with a wine-making business in Spain

QR codes inside wine bottle caps

As if we needed any more of an excuse to drink wine!

If you ever find yourself indulging in a bottle or two of wine in Spain, be sure to check the inside of the bottle caps – you just might find a unique QR code in there that will provide you with stamps towards a €10 voucher for Amazon.

This Spanish winemaker has made it very easy for customers to collect stamps by scanning the QR code, allowing the brand to engage its customers regardless of where they buy the bottle of wine from.

In regards to security, it’s very difficult for anyone to scan the codes without purchasing the product, which protects the winemaker from fraud.

As for production costs, the QR code can simply be printed on paper and placed inside the bottle cap during production, because the bottles are corked. This is a very inexpensive way to disperse the unique QR codes.

Stamp Me Loyalty Solutions offers digital loyalty programs for FMCG brands to directly engage their end-customers.

FMCG brand direct communication customer

Not only do our award-winning digital loyalty solutions allow FMCG producers to create a direct relationship with their end-customers, but we’ve even built in some extra customer engagement tactics that FMCG brands can embrace.

From instant prize draws with in-app Scratch & Win promos, to polls, surveys and quizzes, there are countless ways to engage customers with our digital loyalty app.

scratch win youre a winner

It also facilitates social media engagement, meaning customers can earn loyalty points towards their next reward by sharing a brand’s FMCG products on their personal social media pages alongside the relevant hashtags.

To discuss how we can help you boost engagement and drive repeat sales of your FMCG products,get in touch with a friendly member of our team today.

Stamp Me provides loyalty solutions to businesses large and small, from our own Customer Loyalty App to fully customised loyalty and rewards programs for enterprises and brands.

Contact us if you would like to discuss a loyalty or rewards solution for your business or brand.

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