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Belly and Apple need to correct one critical flaw to reach potential

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Belly and Apple need to correct one critical flaw to reach potential
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Apple and Belly have announced an expansion of their partnership where Belly will become one of Apple’s recommended Apps for Business and, in the words of Belly CEO Logan LaHive, “Apple will funnel business-to-business sales leads to Belly.” Joining IBM, Box and DocuSign is a big step for Belly, still termed a loyalty “startup” by TechCrunch, even though they are celebrating their 4 year anniversary since first claiming plans to change local merchant loyalty forever as the ultimate punch card killer.

The announcement comes just weeks after Apple’s renaming of its Passbook app to “Wallet”. The transition of PassBook to Wallet carries the significance of creating a powerful engagement tool for merchants willing to position their loyalty apps in Apple Wallet. Wallet, you see, communicates with Apple Pay to serve up the right loyalty card at the right time when a customer is in the store.

A few smart retailers have taken a strong step forward to play the Wallet game and it will be fascinating to see how facilitating use of, for example, a Kohl’s loyalty card while completing a purchase in a Kohl’s location increases engagement with the retailer’s loyalty program while also encouraging higher usage of Apple Pay. Joining Kohl’s in the first wave of retailers to join their loyalty programs with Wallet are Dunkin Donuts and Walgreens. More are sure to follow.

Sorting out the end game in digital wallets and the transformation of retail loyalty programs requires multi-threaded analysis. There is no easy to predict path to victory, and it is the aggregate impact of announcements such as this one which will lead to clarity. What can you take away from this news?

  • The announcement builds on Belly’s nationwide network of 11,000 local merchants nationwide, including 2,000 7-Eleven stores. Linking main street merchants together in a functional network is a holy-grail type of pursuit that many larger brands are standing in wait to acquire when the time is right.
  • The designation of Belly as a recommended app for business could spark acquisition of a fresh wave of merchants and give Belly a permanent edge over competitors like FiveStars, Flok (formerly Loyal Blocks),  Groupon, Loyal Stamp, and SpotOn.
  • In time, one could imagine that Belly might become Apple’s own loyalty program, but how would that move conflict with the interests of large merchants positioning their loyalty apps in Wallet?

A few questions bubble up from this announcement:

  1. Is Apple hinting that Apple Pay needs a loyalty component to gain desired levels of engagement and usage? Will Belly be the answer?
  2. Will larger brands be thinking about making their loyalty programs compatible with Apple Wallet as a principal engagement channel? We’re living in a mobile first world and Apple Wallet might be a practical path to execution.
  3. How will Apple keep the peace between local merchants using Belly and larger merchants using Wallet?
  4. What’s the end game for Belly, FiveStars and others chasing the local merchant loyalty space?

We’ve thought through the answers to these questions and in the process have identified the single most critical flaw in the Belly model that must be corrected if they are to achieve the highest potential associated with this closer relationship with Apple.

Let us know if you’d like to chat about it.

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