Point Economy: The Revolution in Life Consumption Detonated in the Era of "Following Economy"

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“We want Prime (membership) to be such a good value, you’d be irresponsible not to be a member.” —Jeff Bezos, CEO of Amazon

There are two scenarios below:

1. Before going to work every day, I am used to buying a cup of coffee to refresh myself. After buying the coffee, I open the app of a certain convenience store. The first thing I see is the points accumulated from my daily consumption at this well-known chain convenience store. After a quick calculation, you will know how many points you still need to accumulate in order to exchange for the exquisite gifts you have coveted for a long time.

2. Sitting on the MRT heading to the meeting place, I opened LINE. The various stickers that relatives and friends send to each other every day are like a never-ending arms race. When I see cute stickers, sometimes I can’t help but want to buy them! Check the points accumulated in your LINE account, which can be used to offset any charges. marvelous! You can download a set of stickers without spending half a dime.

Are you familiar with the daily life scenes outlined above? If the answer is yes, I believe you already understand the charm of the “point economy”.

Customer Loyalty Program

According to the Harvard Business Review, acquiring a new customer costs 5 to 25 times more than selling to an existing customer. Not only that, existing customers are willing to spend 67% more than new customers. In short, a “customer loyalty” program is an investment that you won’t regret and can indeed pay off.

As high as 82% of American adults say they are loyal to brand. In view of this, many companies have invested a lot of manpower and material resources in “[customer loyalty](https://www.contenthacker.today/2018 /02/6-ways-to-increase-customer-loyalty.html)” plan, they began to consider what they must do in addition to their official website and social media to maintain a close relationship with customers and ensure that this group of contributing customers can be associated with their products and services.

Supermarkets take the lead in promoting conversion rate

The point economy is a product that emerged under this kind of thinking. Take the country’s three largest convenience stores, Uni-President Supermarket, FamilyMart and Laifu, as examples. They have each mobilized the strength of thousands of stores under their banners to make full efforts to integrate virtual and real stores. They also encourage members to start collecting points. According to statistics, the point redemption business opportunities created by the three major convenience stores each year have already exceeded 10 billion yuan.

Huang Junyi, director of the merchandise department of FamilyMart, revealed in an exclusive interview with the media that they converted point stickers into App membership points in April 2017 and cultivated 4.6 million members in just 20 months. The contribution of members can be imagined. The unit price per customer is 60% higher than the average. The contribution to revenue has increased from 15% to 25%, which is quite astonishing.

Uni-President Supermarket’s App has been downloaded by 6 million people; OPENPOINT points can not only be redeemed for goods in more than 5,000 stores and Apps, but can also be used for point exchange, virtual gifts and lottery activities. The number of members has doubled every year since 2014; while the number of members of Lairfu has also exceeded one million, 60% of which come from the Hi-Life VIP App. This power cannot be underestimated.

The future is virtual and real currency

The era of indiscriminate payment is coming. The point economy is gradually changing our consumption patterns, but in fact these virtual currencies have their origins and are not a recent product. The reason why they have received recent attention is actually due to changes in people’s lifestyles. As Professor Shen Zhonghua of the Department of Finance at National Taiwan University said, “The future may be an era of indiscriminate payment between virtual and real currencies.”

HAPPY Li Mingcheng, GO’s deputy general manager of marketing and business, once pointed out that the key developments in the points market since 2017 have [three major focuses] (https://www.cna.com.tw/news/afe/201709290313- 1.aspx): The first focus is the continued development of payment tools in Taiwan. The second focus is the rise of the point transfer trend, which has spread from banks and mileage accumulation to communication platforms. The third focus is the integration of virtual and real points. Online redemption of points is a hot trend, especially gifts from supermarkets.

Behind the scenes: 30-40 year old consumer group

Let’s look at the driving forces behind the point economy. The consumer groups in their 30s and 40s are the main force. There are even more women than men. It is obvious that these consumer groups not only generally have a college degree and high spending power, but are also quite skilled in the application of technological tools and a shopping model that integrates virtual and real things.

Vice President Li Mingcheng believes that the key to the continued vitality of the points economy is its perfect integration with people’s consumption life. It is true that the integration between reality and reality brings various convenient services. The rise and fall of points recorded through the App or mobile webpage has driven the development of “Ubiquinomics” (Ubiquinomics).

The so-called “[With the economy](http://group.dailyview.tw/2015/10/05/%E9%9B%BB%E5%AD%90%E5%95%8 6%E5%8B%99%E6%96%B0%E5%AE%9A%E7%BE%A9%EF%BC%9A%E4%BB%A5%E4%BA%BA%E7%82%BA% E6%9C%AC%E7%9A%84%E6%99%BA%E6%85%A7%E7%94%9F%E6%B4%BB/)” was initiated by the new president of the Cultural University [Lu Xipeng] (https://www.facebook.com/happy88.lu), which means that through the development of smart technology, consumers can easily shop at any time and anywhere. President Lu Xipeng said that in the era of “following economy”, time will become a limited resource in the new economy. Therefore, any idea that saves time helps increase added value.

Selling experience, life upgrade

Are you also curious about why everyone likes to go to Starbucks since they also sell coffee? Could it be that Starbucks’ coffee beans are particularly high-end, or that the roasting techniques are particularly particular? Some scholars and experts began to do research and came to the following inference: What Starbucks sells is not actually coffee, but an excellent experience that provides an elegant space and fashionable atmosphere.

According to the same logic, the point economy detonated in the era of “following economy” is actually another completely different revolution in life consumption - the advancement from traditional stickers to virtual points is not only an evolution of vehicles, but also an upgrade of customer loyalty services!

The point economy is booming, have you started collecting points?

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★ Article source: This article was originally published in the February 2018 issue of “English Island” magazine

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