Chapter 1: Introduction
0:12 So thank you to the Tillo team for inviting me here today. My name is Matthew Griffin. So when we actually think about the future of retail and loyalty, I kind of come into the industry from a variety of different angles. On the one hand, I'm a consumer. I have loads of different loyalty cards. I'm part of loads of different loyalty schemes and so on and so forth. And honestly a lot of the loyalty cards that I actually have stuck in a drawer and we're going to be discussing that.
1:28 So I've got the consumer angle. I work with retailers. But fundamentally what I'm trying to do basically with every industry that I'm actually a part of is try to see the future. So when we talk about trying to understand what the future is actually going to hold, we can see what the future is going to look like because we can see the patterns today and we can talk about those.
Chapter 2: Seeing the market from different angles
2:56 Now from a retail and loyalty perspective, what I really want to try to do is I want to try to show you a variety of different perspectives. I want to try to provoke thinking. I also want to encourage you basically to look at the market from different angles. The reason for that is because I'm looking at the market from different angles and the clients that I work with basically are also looking at the market from different angles. So if you can't see the future then you can't get a point of view on it. If you can't get a point of view on it, you can't discuss it. And if you can't discuss it, you can't develop a vision or a strategy that might actually take you from being a 1x company to a 10x company.
Chapter 3: When the one thing changing is everything
3:32 So when we think about the world around us, yeah, at the moment ultimately basically there is just one thing that's changing. We can all get our heads around one thing. We know that it's easy to get your head around one thing, unless of course the one thing that is actually changing is absolutely everything. Among other global geopolitics. Basically, we have the rise of the multipolar world. Basically, we have China versus the United States and we have Europe in the middle fundamentally trying to figure out its place. We've got the UK trying to figure out its place on the global stage, you know, after Brexit in 2020. Yeah. When we have a look at things basically from a societal perspective, increasingly we can change societal behaviors just with a TikTok or with an Instagram post.
4:16 That's it if you're older. Additionally when we actually have a look at technology, the pace of technology disruption basically is accelerating and actually when we have a look at what we can do with technology which will be sort of one of the focuses of this talk but also one of the panels later you haven't seen anything yet and increasingly we sort of have to ask these questions from a company perspective from an industry perspective.
4:43 Who are you? Are you organizations that provide gift cards? Or are you technology organizations? Now the reason why I actually ask that is if you go and ask for example a company like Walmart and you say what industry are you in? They will say we're in the retail industry. You go and ask the same question basically to Amazon and you say what industry are you in? And they will say everything. We're in healthcare. We're in entertainment basically. We are in finance. We're in e-commerce. We're in technology, we're in cloud. And so this is increasingly why when we have a look at the large technology giants out of the United States who now if you look at Nvidia, if you look at Google, Google has a market cap of $4 trillion. UK GDP is about $3 trillion.
5:32 One American company turns over more or has a higher market cap than the entire UK economy. And so we have all of these different forces around us basically and we have a future that is increasingly being developed for us that we are then trying to figure out and we can either get run over by a future or we can understand it and then try to navigate it for our advantage.
Chapter 4: Speed, consumers and regulation
5:57 Now when we think about speed we're all operating at different speeds increasingly this is kind of one of the stresses that we face in your industry. In our industry, we have the markets and the markets basically our consumer behaviors for example can change in the day. They can change in months or they can never change. Yeah. When we actually have a look at some of the things that never change. We talk about changes being a constant but some things don't change.
6:27 Consumers don't really change. In 50 years time people are still going to want convenience. They are still going to want to be able to trust brands. They are still going to want value and all these sorts of different things. But nevertheless, society is changing faster than ever before. When we think about, for example, Temu, Temu basically simply started disrupting Amazon by going through TikTok as a super app. It went from zero to 30. It went from zero to $50 billion in 3 years.
7:02 And the way that they did that is they activated a new channel. They moved into it. They exploited it. They exploited regulations as well, but they changed consumer behaviors. When we think about governments, governments used to sort of make new regulations and it used to take them years. Now we can see regulations changing all the time. If you have a look at the EU AI Act that took about three years to put together and as we start seeing presidents of the United States provide his own commentary on it, the European Union starts thinking about unwinding that now that affects basically things like GDPR, privacy, data sovereignty, artificial intelligence sovereignty.
Chapter 5: AI and the speed of disruption
8:00 So when we think about the things that are changing, everything is changing but speed is an issue. Now when we think about artificial intelligence, ChatGPT that most of you probably use has an IQ of 155. The good old Gemini Pro 2.5 has an IQ of 136 because we've measured them today. I'm already using artificial intelligences that are able to code, program, that are able to create music and all sorts of different things. These AIs are democratizing access to different things, to different skills that you've never actually had to learn.
8:52 So when we actually have a look at basically disruption from an artificial intelligence perspective when a new AI is launched whether it's GPT-5 whether it's Gemini 3 whether it's GPT-6 whatever that artificial intelligence allows you to do all of its capabilities are available to five billion people on the planet within 69 milliseconds so when GPT-6 is released for example whatever it allows you to do it's available in 69 milliseconds and as an industry you have to figure out what is this new AI what are its capabilities what can it do for us what can it do to us and why should we care and then you've got to start rebuilding the organization to actually keep up with this future.
Chapter 6: A strong, growing and sticky industry
9:40 Have a look for example at UK retail sales growth. So UK retail sales are up about 3.2%. 27% of our sales are online. Now when we think about digital gift cards, digital gift cards actually play a more prominent role in the industry's future than you might actually think. It also is one of the transformational linchpins basically for the industry. But digital gift cards represent 50% of the UK market and realistically that's only going to go up. Now when we have a look at loyalty and CRM the good news is that as a percentage of marketing budgets that's about 52% of UK spend. So all you have is just here you have a trend basically we know that digital is increasingly going to be the trend to be on top of.
10:40 We also know basically that there are strong budgets on the back of it. I and then from a UK perspective by 2030 we estimate that the UK industry will be worth about 12.6 billion growing at roughly about 8% CAGR. Now top end there is about 14 billion. So the industry is healthy. The industry has got a lot of opportunity. The industry is sticky which is good. Some industries are in decline. But see this is not an industry that's in decline. This is an industry that's growing and it's actually growing quite solidly.
11:17 at a global level I said we actually expect basically the corporate sections to be growing at about 10%. And in fact we see more companies actually sort of moving into the loyalty and the gifting space basically than ever before. The other good news is basically that you know out of the surveys that have actually been done 92% by of loyalty schemes and programs seem to be generating around a 5.3 times return.
11:50 So when you start putting all of these different metrics together what you have is you have a strong growing healthy resilient industry. Now that's a good thing but also means you can get slightly complacent. And actually complacency can actually have quite a negative impact on an industry because you just think we're just going to keep doing what we're doing today and tomorrow will always be better. So just beware of complacency.
Chapter 7: Loyalty has a price floor
12:18 Now some of the other studies that we actually do and when we actually have a look at different sort of behaviors the rough roll of stuff is well every single brand that I interact with and that you interact with says the most important thing to us is we want customers but more than that we want customers that are loyal to us that keep coming back that continuously buy from us irrespective of who we are, what we do, what we sell.
12:54 As brands basically, we want loyal customers. We want to minimize churn. But roughly, and it depends on the sort of particular product segment and everything else. If another brand offers a similar product to yours for a roughly 25% less then 65% of consumers basically will start moving. So loyalty has a price floor. Now we saw this with Temu you know when you think about a lot of the UK retailers for example why did Temu go from zero to $50 billion in three years. Yes, they were exploiting de minimis rules and all these kinds of different things, but the reason basically why they got such a large lead basically on their competitors and grew so fast is because they had expert logistics, but fundamentally they were really cheap.
13:59 So when we think about the world that we live in where we have increasingly sticky inflation that's going to be between 2 to 4%. And where we're going to end up having higher interest rates where from a UK perspective we end up having less disposable income where people's wallets are being pinched a little bit more and we see that you got to be careful as a brand to manage your price floors because even though I might be loyal to you even though I might really love the purpose and the passion behind your brand if someone's 25% cheaper I'm going to get itchy So loyalty isn't just one thing but it's lots of things.
14:49 But also if you expect me to be loyal to you as a brand you've got to be loyal to me. And being loyal to me as a consumer basically means being selfless. Loyalty points expire, but you just don't get told. And we've all had loyalty points expire. And at what point have you looked at your loyalty points and gone, "What's going on there then?" and felt cheated.
15:24 Loyalty, the best loyalty is a genuine two-way street. Even though companies basically want to look at this basically from a P&L perspective, which is very tempting.
Chapter 8: Loyalty data, the cleanest data on the planet
15:38 Now I might actually think about yeah some of the trends that we actually see some of the economic trends for example loyalty if should we say managed in a certain way is actually a financial asset. Now when we think about retail media, increasingly customer data has always been valuable but the data that you actually hold membership data loyalty data is the cleanest set of data on the planet. It is the good stuff. It is the ambergris of the data world because it is sanitized, cleaned, deduped it is generally accurate.
16:37 Now organizations basically can take this data they feed it back into their retail media networks which are generally outsourced by the way rather than being insourced within the company. Most of them missing out on around a $60 billion opportunity. If you think about different airports around the world, you know, they will go to basically external retail media partners and say, "You manage the advertising screens and we'll do the other stuff."
17:05 Missing out on a $60 billion opportunity.
Chapter 9: 165,000 data points and AI that remembers
17:08 Now in addition to that artificial intelligence today only thing that it can do is scrape 165,000 data points on each of you. 165,000 data points. If I have just two data points on you, your name and where you work for example, I can get some relatively interesting demographic data. If I know where you live, I can increase that. So these are the kinds of data basically that the AI companies are actually scraping from you. Device data, inference data, traits. But Sam Altman last year said in time artificial intelligence will remember your entire life. Now think about that.
17:58 Think about your behavior with AI. When you used to do a Google search, you'd do a Google search and go, I've got a cough, you know, and I had to bring up, you know, different sort of WebMD sort of pages and say, well, you know, you might die. Think about the difference in information that you are thumping into the chat box versus a Google search. In the United States, 54% of people are using AI for financial and investment advice.
18:31 The kind of information that you are thumping into these AI chatbots is fundamentally different to what you used to thump into Google search. Now, as we build out artificial intelligence data centres, we've got a pipeline of about $6 trillion worth of capex up until 2030. These AIs aren't just remembering what you did today or what you did yesterday or this year. They are building up an a highly accurate picture of your entire life. Now is that data valuable to any brand?
19:08 Highly valued.
Chapter 10: Airlines, banks and equity funds
19:11 So as an industry how are you actually leveraging 165,000 data points for what purpose? Now when we have a look at the airline industry increasingly some of the world's largest airlines we don't refer to them any longer as airlines. If you have a look at Singapore Airlines for example, we say, "Oh, Singapore Airlines, you're talking about the bank, right?" They were, "No, no, talking about the airline, basically the airline company with planes." And we go, "Yeah, yeah." And the loyalty programs and yeah, yeah, you mean the bank.
19:48 when you start really digging into and a lot of the numbers in the airline industry for example the AAdvantage loyalty program with American Airlines it's got a valuation not a market cap it has a valuation of $27 billion American Airlines loyalty program is worth two and a half times the airlines market capitalisation, not revenue, market cap. So, is American Airlines running an airline versus or are they actually running a kind of bank?
20:30 Because increasingly, when you have a look at organizations like Delta, their loyalty program is worth $32 billion. When you have a look at United, it's worth $25 billion. Increasingly these airlines and it's the same with British Airways at IAG increasingly you're going we're not an airline we'll give you the free seats basically you know buy the loyalty package you know when you work with Delta for example you've got to have an American Express card why because American Express actually buy the points back JP Morgan will buy the points back off companies like Delta and they will actually then use that for liquidity So in 2020, we saw American Airlines basically actually use basically their loyalty programs as collateral against the $10 billion loan.
21:21 So this is sort of why I say, you know, from a industry perspective, you know, bearing in mind basically the value of the data, the points and all sorts of other things. Are you a loyalty scheme? Are you a gift card company? Are you a platform? Whatever it happens to be, whatever part you sit in the ecosystem, are you a brand or are you actually an equity fund?
21:47 This is sort of what I talk about when I'm talking to investors when I'm talking to different retailers as we have in the room, are you an equity fund? And there'll be some going, no, no, we're not an equity fund. There'll be others going there. Maybe we are. So what do we care? If we do care, what's the advantage of that? How do we monetize it? What else could we do with this?
22:17 The future lies in questions. What if? What if we are an equity fund?
Chapter 11: Value, trust and the two-way street
22:22 What if this is actually the future? Now look at social trends. Yeah, we've got shoppers chasing value and flexibility. I want to be able to shop there. I want to be able to shop there, but I want everything cheap increasingly. You know, we see that basically with the rise of Aldi and Lidl basically and you know the pressures that we see there. But ironically, basically from a societal perspective, our trust in loyalty is eroding. This is sort of what I talk about when we sort of talk about the two-way street. You expect me to be fully loyal to you because that's what you would like. You know, drives up top line, drives up bottom line. That's good. But how loyal are you to me as a consumer?
23:06 Now, when we have a look at this, logically 82% of companies basically think that their loyalty programs deliver value. You go basically to the boards and you say, "Do you think your loyalty program delivers value?" And they go, "Absolutely." Yeah. Absolutely. 56% of consumers agree with it. There's a mismatch. When there is a mismatch, basically as any entrepreneur and any founder basically will tell you basically there is an opportunity.
23:39 Now most consumers basically almost half of consumers basically think that loyalty points basically take too long to earn. 41% of people are frustrated by expiring and revalued points. There is a particular airline basically that I travel with all the time and about every year they go hey your insert name of points of here are now worth less and I go that's fantastic and what did you do for me this year we know this the industry knows this basically there are opportunities we know basically it's a little bit of a game because we're balancing budgets and P&Ls and everything else we know it's never just as straightforward as you're loyal to me, I'm loyal to you. That's it. There's all sorts of different things at play.
24:33 But increasingly, when we see an increase, when we see the cost of living increasing, and it's globally as well, it's not just the UK, gift cards are increasingly being used as an essential part of daily budgeting, especially for groceries. And this is only going to increase because increasingly we are moving into an era where inflation is stickier. So this starts creating an opportunity in a different way.
Chapter 12: Software is becoming the buyer
24:58 When we have a look at technology trends, this is where things get a little bit weird. Software is becoming the buyer. So this is agentic commerce for example. If you think about choice as individual human consumers, you have never ever had more choice. If you want to go to a supermarket, you go to Tesco, you go to the Sainsbury's, go to the sauce aisle and you look at the sauce aisle and you go, hm, which of the thousand kind of sauces would I like on my chicken tonight?
25:40 Now when we go online though the people who were able to manipulate them algorithms say out of this thousand out of these thousand sauces that are stocked at your favorite grocer is three and you look at the I don't know any of those brands increasingly the artificial intelligence system as you are saying I've got 165,000 data points on you. I know more about you than you probably know about yourself, let alone your partner knows. And I think you just want these three.
26:12 Now, one of those products will be sponsored by the company who is working with Google or OpenAI or whoever it happens to be. The other one might very well be a Chinese brand depending on the product space you're looking at. And the other one is what the AI genuinely thinks that you actually want to buy. But also identity is becoming the new clean moat. Now globally digital gift cards basically represent 48% of the global market and 70% of those basically are in the B2B space.
26:48 Nothing new there. But there's a shift when you move from a physical product to a digital product as Visa well very well knows as Mastercard very well knows. You aren't transferring like for like. You're moving from a physical product basically that was relatively limited in scope and what it could actually do to a digital product that is pretty much unlimited in what it can do. So, as I said earlier, loyalty programs are the cleanest form of data. If I was going to train my artificial intelligence on consumer habits, consumer behaviors, all these kinds of different things, I'm coming for the loyalty data. And this is where increasingly the loyalty data is feeding into things like Google's shopping graph. So Google's shopping graph has 50 billion products. It's updating two billion products a day with all of the features and it's saying for a product that has this kind of feature, these are your kind of customers. In addition to that, when we have a look at things like shopping graphs, if I'm searching for, say, for example, headphones, I'm looking for headphones that are sub $200 basically that work with the technology stuff I have.
28:07 Google knows basically the context. You're looking for good quality headphones, sub-$200 bracket that works with the products that you have. Google, Google Wallet, and everything else know the products that you have. They go ah well you've got three iPads you've got a Chromebook you've got you know two kids and everything else so actually this is the product you want when we have a look at shopping graphs the contextual data now is absolutely staggering.
Chapter 13: The third wave of retail
28:34 And then when we actually have a look at the future of commerce itself we're essentially on the third wave of retail you know we have brick and mortar, we have websites now from an e-commerce perspective companies basically are saying, "My e-commerce site needs to be readable by humans." It's like, "Yep, tick." But increasingly, this is saying, "My e-commerce website also needs to be able to be read by AI agents and robots."
29:08 So, you end up with what we call MD files buried basically within e-commerce sites. Now with the large tech giants basically we're sort of saying well as AIs start recommending products more as AIs become more of a customer maybe than humans that's a sort of you know another sort of thing that we actually look at do you even need an e-commerce site so all these questions we're not necessarily saying yes you need one or no you don't but as we start seeing technology evolving in new ways and we see new user behaviors coming In this is where we start saying is what we've always done always going to be true or are there other things that we can actually do so when we have a look at agentic commerce your future customer in part will be an AI agent still going to have humans basically doing a lot of stuff at the moment humans are doing the bulk of everything AI agents in terms of commerce basically takes up a sort of small chunk but nevertheless this chunk here wasn't here about two years ago.
30:21 Now when we think about agentic commerce agentic commerce basically is me disintermediating you as a brand because I'm going into something like ChatGPT. So I'm going into a chatbot UI and I'm saying I want to buy a new white shirt and the AI is saying I've got 165,000 data points on you. So, I think I kind of think I know, you know, what a good white shirt might look like for you. But the brands that it shows me, it's deciding. Now, originally, if I wanted to buy a white shirt, I might have gone to Tesco's website. I might have gone to Next's website and I might have gone to Amazon and I'd have mooched about, you know, or Thomas Pink or whatever it happens to be. Now, I just go into the AI and I say, "Looking for a white shirt." And it goes, "I know you really well, Matt. I think here are three options.
31:14 Pick one. And at what point basically does the AI know you so well that it doesn't say here are three options. It just goes here's the one for you. That won't happen because they're always going to recommend things because that's a revenue stream in itself. But we can get there.
Chapter 14: Disintermediation and branded marketing
31:31 So what you have is you've got agentic shoppers. This is a fundamental disintermediation play. You know, the work that I do with KPMG, it's a disintermediation play how do you react to that you know from a loyalty from a trust from an engagement from a narrative from a marketing perspective you know when we think about this disintermediation play from a branding perspective you need to move from unbranded marketing to branded marketing now what I mean by that for example I will look specifically for a white shirt from Next.
32:13 So increasingly we see a move to branded marketing sort of branded SEO, branded GEO. Increasingly the checkout can go away because you can be in an agentic interface and I go I'll buy that white shirt, buy it. Now one of the things that freaks me out for example is you don't have to have a checkout window any longer. The AI goes I know where you live. I've got your card details, your loyalty information, and everything else. You know, you want to buy it. Okay, there you go. You get it tomorrow.
32:49 So, the traditional card networks do not like this. I won't say they're terrified about it, but they do not like that. And then when we have a look at this universal baskets basically from Google, increasingly what Google will do is Google will keep a basket open. So today basically I'd go to Next's website. I buy a shirt in there. I go to British Airways. I buy a flight in that one. I go to Sainsbury's and I go and buy some sauce and I put that into my Sainsbury's basket or whatever it happens to be. With universal baskets, I can just say I want to book a flight. I want a white shirt. I want some sauce.
33:25 And Google will increasingly just go that's in one basket for you. At that point, Google is now starting to disintermediate basically the actual shopping carts where again you're picking up data basically you're controlling the transactions and so on and so forth. So when we have a look at agentic commerce, agentic commerce is not just an AI agent basically being used basically to surface information. Yeah, find this. Yeah, it's not another way basically to eliminate the filtering on your e-commerce sites. It's a fundamental switch in what we do, but it's a fundamental switch in how we do it and where we do it.
Chapter 15: From SEO to GEO and the Universal Commerce Protocol
34:10 Now, the result of this basically is that if you're an organization that sort of leans very heavily into online SEO, you've probably seen your website traffic dropping by about 30%. Now the flip side of this is if I'm doing a GEO search, so a generative engine optimization search, so searching in a chatbot when I go to your store, when I go to your particular product, if I go to your particular product, I'm three times more likely to buy your product. So we see SEO declining, we see GEO rising.
34:48 And then when we actually think about UCP, Google UCP basically you so Universal Commerce Protocol is an open source protocol that organizations like you know Walmart basically and Google and others have actually put together because fundamentally UCP basically is a protocol layer. So Google is trying to own the protocol layer. Amazon is trying to build its own proprietary protocol layers. And there's a reason I'm showing you this.
35:14 So UCP ultimately is now starting to embed things like loyalty and membership directly into the UCP protocol. Now, what that ultimately means is if I go to, for example, pick any UK retailer, we've done the grocers, you know, so let's pick a UK retailer. Pick any UK retailer, but say I go and I buy something. UCP will say, "Matt, you're buying McDonald's, whatever, from Deliveroo. I've noticed you've got a McDonald's loyalty card basically in your digital wallet.
35:48 It's got 3,000 points on it. I'll use that. So, this is where UCP, agentic commerce, and digital wallets now start tying up together. That's kind of good because we can see basically the loyalty programs and everything else. It's kind of not so great depending where you sit.
Chapter 16: AI does not care about brand loyalty
36:11 Now the estimates are basically that by 2030 AI agents will be influencing over $5 trillion worth of retail spent. Now if you have a look at the high-end estimates which I never really try to look at the high-end estimates there are estimates that say that it will influence $15 trillion worth of retail spend by 2030. But generally the low ball is $5 trillion worth of retail spend will be affected by agentic commerce by 2030. It depends which country you're in and everything else.
36:41 Now, here's the kind of issue. I use agentic commerce. I have AI agents that do all sorts of different things for me personally and the company. AI doesn't care about brand loyalty. AI is very logical. So as brands increasingly as we see a switch more to agentic commerce, you're advertising to humans who are using artificial intelligence to search for your products, engage with your brand, buy stuff.
37:18 I care about loyalty. So unless I'm doing a branded search, so unless I'm saying find a white shirt from Next, increasingly all the money you're spending to convince me to buy from you is increasingly meaningless because the spend what I'm doing, my interface is over here. Brand loyalty means nothing to these robots. But then additionally, if these AI agents can't see you, you are also invisible.
37:56 And you don't want to be invisible because if you're invisible, people aren't paying attention. I don't know you exist. So, I can't engage with you. I can't engage with your value proposition and everything else. So, this is where UCP comes in. UCP makes you visible. And you sort of think, well, that's great. Okay, that's good. That's good. You know, visible. We're visible offline and visible online but depending on what goes into the UCP protocol AI never forgets and AI can redeem everything.
38:32 Now that becomes a challenge because basically when we have a look at loyalty points and breakage yeah in the UK we have about £3.3 billion worth of loyalty points expiring every year we have about £300 million worth of UK breakage you know and while there are conversations about around all of these different things you have a company that is based out of California that is developing a protocol basically that sort of goes I've looked at your digital wallet did you know basically you've got 3,000 McDonald's points still left. You know, you were going to order a Nando's, but hey, what about ordering, you know, a Big Mac or something like that. So, this is sort of why I said there are things that you do to shape and control your own futures, you know, regulators, conversations internally, but there are also things from external sources that have an impact that you do not control. So, you either know about these things and you can actually figure out what does this mean for us, but or you don't see them and some point this becomes a war.
Chapter 17: Gift cards become programmable tokens
39:32 Now in addition to that when we have a look at things like you know physical gift cards yeah the 16-digit pan basically is going away physical card still there but you know digital is coming on strong so when I say gift cards physical gift cards are going away they aren't but the ratios and the proportions are changing now when you digitize a 16-digit it actually becomes a programmable network token. Now, if you're not technical, that means absolutely nothing to you basically because that is just junk and jargon. But if you are a programmable token now, you can add metadata, you can do all sorts of things, but so while we see threats basically to one part of the sort of the budgets and the business models and everything else, but we see other opportunities. Now, fundamentally, if you think about loyalty and gift card programs, if you really want to sort of get technical and you know, we can always debate this.
40:37 A nerd would say that they are transactional rails. I have a gift card. I've got loyalty points. I want to spend them. Yeah, it's a transactional rail. Now this is sort of where the future of the industry could go. This is an additional. Now what you have at the top basically you've got AI shopping agents. Unless you own Google or own ChatGPT or unless you can build your own agentic engine systems basically that everybody uses it's going to be hard for you to be the shopping interface that people engage with. At the bottom basically we've got different organizations basically like Visa, Mastercard, Discover, American Express, the payment networks and Walmart and Amazon are actually developing their own cryptocurrency stablecoin networks because they don't have to pay merchant fees.
41:37 Then you've got you have the network token. You are a network token. Your digital products are already tokens. When you use your Visa credit card basically online you're not using a physical card you are using a Visa token now on these tokens you can be the compliance rail the guard rail especially for cyber security when you have a look at things like gift card fraud etc etc it's increasing because it's increasing in every sector you can be the record the single identity record you can be the loyalty program you can do payment routing.
42:20 There's all sorts of nerdy things that you can actually do.
Chapter 18: The infrastructure opportunity
42:25 This is where increasingly the actual growth opportunity for the industry basically is technology platform. So clients, brands basically pay people within you know partners and so on and so forth in the ecosystem. Brands pay people to use the platform. So that's a SaaS model. That's a $10,000 a month basically to use our platform. We will manage compliance, data loyalty, you know, privacy and protection and all these sorts of things. But then you also take a transactional toll. They sort of say right, you know, when we are spending basically your loyalty points or gift card, we'll take a 1% charge.
43:03 Now when you actually sum this up just from a loyalty perspective and a gift card perspective in the UK being that kind of infrastructure rail is worth £400 million; globally it's worth £20 billion but the real rub is this is just if gift cards let's say and loyalty programs became infrastructure platforms. If you scale it up to everything you could actually take on, it's actually between a 2.4 and four trillion market opportunity.
43:48 So what is it? Why is it? Why should we care? And if someone sort of goes, I might like that opportunity there, then the next question becomes, well, how do we learn more about it? What do we do? Who do we call? What are our first experiments?
Chapter 19: No loyalty without engagement
44:08 And then as we sort of close out, you've also got to remember there is no loyalty without engagement. 97% of people in the UK basically have some form of loyalty card. You've all got loyalty cards. How many of them do you use? Are you actually in the loyalty industry, for example, or are you really in the engagement industry? Because I'm only loyal to you if I'm engaging with you or maybe you're engaging with me.
44:47 This is actually about engagement. That's what brands fundamentally want. They want loyalty, but they want loyalty through engagement because I walk into a store, I buy a product, I go online, I buy a product. Now when we actually have a look at the different ways basically that we can actually do this ultimately there are lots of different sort of things that we can actually do to change the narrative around loyalty and different schemes. So we've got curated content for example.
45:12 Now how many of you do not want curated content that is designed specifically for you? 165,000 data points, that's what you've got at your fingertips. Okay, so curated content, you should be able to do very, very programmatic, granular curated content. Now, when we think about firewall discounts, you know, we see these basically with a variety of UK retailers. You know, you can buy a product, you're standing in front of a shelf maybe and it says if you're a member of our loyalty scheme, basically this product is not £5, it's £4.
45:57 Now, quite a lot of people increasingly sort of go, I'm going to join that loyalty program. That's it because I want that pound. Yeah, there's a UK retailer basically that's quite famous for this. And then we got frontline surprises. Now, how many of you actually give your frontline staff the ability just to give perks to people to write off a shop? Yeah. How many grocers basically do you go to in the UK where someone just pops over to you and goes, "Hello, are you a member of our scheme?"
46:27 Yes, I am. Well, okay. This shop is on us today. You know these sort of pop-up surprises because even though we look at loyalty basically from a digital lens there's also got to be a heavy physical component as well. Now when we have a look at gamification a lot of people basically are perturbed maybe not annoyed but they're perturbed that they have to spend money to get loyalty points. Now when we think about gamification, this is where if you have an app, you can simply say spin this wheel and you've got a chance basically to win 200 points. You spin the wheel, you win 200 points, you go different type of engagement. Now when we think about lifestyle clubs, you know, I'm a member of your loyalty community. Actually, I'm quite elderly. So I want to basically join up and I want to go for coffee mornings or I'm young that's it and actually I want to go on a cycle ride or a marathon run basically with you know people in the community or whatever it happens to be. So this is sort of where we actually have different ways to opt in different people in different parts of the life. And then micro subscriptions, you know, we sort of see saw this a little bit with companies like Pret and so on and so forth. You pay a small amount, but actually when you go into the store, they just go here's a free one. Instant gratification.
47:56 You know, when we really think about loyalty, how many organizations are really doing special things on loyalty? You know, we see Waitrose: bring your own reusable cup basically to get a coffee. Yeah. So, when we think about loyalty, when we think about gift cards, basically the industry is strong. It's resilient. It's growing globally, not just in the UK, but there's a huge amount of opportunity out there for all of you. And that's it for me. So, thank you for listening.
