Former Asos director James Hart outlines reward scheme shortfalls as he invests in start-up LoyaltyLion
Former Asos director James Hart has invested in start-up LoyaltyLion after identifying a gap in the market for a rewards system which goes beyond the typical ‘points for purchases’ and harnesses the emotional connection consumers have with brands.
Hart, who was Asos' first ever employee, has invested an undisclosed sum in Loyalty Lion which has made him the largest shareholder outside of the founders Charlie Casey and Dave Clarke.
Explaining why he invested, Hart said: “Having been in that e-commerce industry for a long time I was amazed that there are no loyalty programmes adapted to the digital platform.
“The best loyalty programmes rely on people buying things, but in the digital environment there are so many other touch points for customers to engage with brands and right now they’re not rewarded for them.”
LoyaltyLion helps retailers reward consumers for social engagement. If someone writes a review or shares content relating to the brand via social channels then they are rewarded witth exlusive content, products or experiences, rather than the traditional model of rewarding with points in exchange for a purchase.
Co-founder Casey lamented points-based systems like Sainsbury's Nectar which he believes are not designed for engagement or motivation to spend with the retailer, but are instead about collecting data.
He believes that e-commerce will become inherently more social, pointing to the likes of Asos with its Marketplace community and Made.com with Made Unboxed as those which have understood this convergence.
Hart added that more retailers are realising that a loyal customer is not one who simply buys something, with an increasing number turning their focus from acquisition towards investing more time and money in retention.
“A loyal customer is someone who tells people about you, gives you content on the platform, watches videos, talks to you in social spaces. And they should be rewarded for that,” he said.
Currently LoyaltyLion is working with 342 small online retailers, but Hart suggested that there is an opportunity to work with larger businesses.
Given his retail connections, Hart explained that wokring with Asos in the future is not out of the question, but clarified that introductions between the two haven’t been made yet.
“There needs more work to get [LoyaltyLion] to that level. I want them to walk before they run.
“I know Asos would be interested in this so it’s just a question of matching up when they could do it to when LoyaltyLion is ready to do it,” he added.
Hart said he will be an “active investor” in getting LoyaltyLion to that stage, and plans to meet with Casey and the team at least once a month to discuss product and strategy.
The move marks his first venture since leaving the e-commerce giant this January after 15 years.