Startup interview: David John, CEO and Founder, Loyalize

RTIH gets the lowdown on Loyalize, which recently raised £250,000 in pre-seed funding as it ramps up product development and works towards a larger round later this year.

RTIH: Tell us about Loyalize

DJ: Loyalize is a white label engagement platform that combines payment and loyalty into a single transaction. 

We integrate our solution into existing loyalty programmes via a single API, which allows shoppers to connect a chosen payment method to their loyalty account. 

Next time they shop with that merchant, all they have to do is pay and they will automatically earn their loyalty and rewards. 

This provides a frictionless loyalty and payments experience for shoppers by removing the requirement for having to carry and scan a plastic card prior to making a purchase.

For merchants – loyalty programmes act as a key channel of data collection and engagement. 

By connecting payment and loyalty together, merchants are able to collect data on every loyalty member transaction – in real-time, across multiple channels – providing valuable insights on purchasing behaviours that can be used to deliver hyper targeted offers and rewards to shoppers. 

This will increase engagement and improve the overall shopping experience.

More recently, we have implemented some more innovative payments solutions that further streamline the loyalty and payments journey for merchants and their shoppers.

RTIH: What was the inspiration behind setting the company up?

DJ: I’ve always had an interest in FinTech and payments, and it’s been fascinating to see how the eco-systems have changed beyond recognition in a matter of years – mostly thanks to Open Banking and PSD2. 

However, loyalty seems to have lagged behind with retailers still using old fashioned and inefficient programmes to try and create rich engagement with their customers.

For example, there’s a disjointed experience at the checkout. When I get to the till, I want to have a quick and simple experience when it comes to paying. 

Yet, I have to take two actions – show my loyalty card or app, and then pay with a payment card – and both need to be swiped or scanned in different systems, which adds to the transaction time. 

Multiply that over many transactions, and that’s a lot of wasted time. It doesn’t make sense to us.

So, the inspiration behind Loyalize is to bridge that gap and create a platform that allows customers to make a payment and get rewarded simultaneously, all via their existing payment channels. 

By using our platform, the retailer suddenly gets access to richer data, enabling them to target and segment more effectively, in real-time.

RTIH: What has been the industry reaction thus far?

DJ: The disruption of the pandemic has left a permanent mark on merchants and their shoppers. 

The shoppers we had six months ago are not the same we have today; normal preferences have shifted, as we have all had to exercise caution about where, what and how we make our purchases.

As such, there has been a massive shift in loyalty and payments. Demand for frictionless experiences has never been higher, and the importance of effective loyalty programmes has been pushed front and centre.

Many merchants no longer accept plastic loyalty cards, or are looking to completely digitise their payments journey, which means they risk losing out on engagement and therefore, valuable customer data. 

For this reason, we have been approached by a number of retailers because loyalty is one of the only parts of their business currently untouched by innovation. 

And, as the loyalty and payments sectors continue to kick into high gear, we are well positioned help merchants adapt and grow. 

We have the technology and, of course, we have learned a lot about the needs of merchants and their shoppers in the process.

RTIH: What has been your biggest challenge/setback?

DJ: Every startup experiences different challenges on a daily basis. 

Building a business from scratch and selling your product or service into global organisations is not an easy task – and arguably is one of the biggest challenges that any early stage business will face is securing their first client – especially during a global pandemic.

For us, one of the key trends we’ve had to monitor to avoid setbacks is market growth. The speed in which loyalty, and certainly payments, has grown over the past 12 months continues to be an important factor that informs a number of our strategic decisions.

We constantly keep a close eye on what is happening in the space, ranging from looking at new technologies, through to conducting more research on the continually evolving expectations of shoppers as the hope for a return to normality grows. 

In doing so, however, it has allowed us to adapt and scale, ensuring we stay ahead of the curve.

RTIH: What are the biggest challenges facing the omnichannel retail sector right now?

DJ: As touched on in an earlier question, the pandemic has had a monumental impact on the retail industry as a whole. 

It has created a new breed of shopper – one whose behaviours and values have changed immensely since pre-pandemic times. These new shoppers are more digitally savvy than ever before, having been forced to embrace the online channels. 

This means merchants have had to innovate to far greater lengths than ever before, putting significant pressure on their ability to transform and ensure shoppers are provided with the best digital experiences. 

One thing we know, is that a poor digital experience is now a certain way to lose business.

Shoppers will need a compelling proposition to tempt them back in-store, and will expect brands to implement a new digital-first approach to enhance the overall customer experience.

Retailers should continue to examine and leverage the datasets they keep on their shoppers, specifically on past purchases, to create offers and campaigns via digital channels that lure customers back, drive footfall and importantly, keep them returning.

RTIH: What can we expect to see from Loyalize over the next 12 months?

RTIH: Where do I begin - lots!

The loyalty and payments industries are growing at a rapid rate – arguably more so due to the pandemic – so to keep pace, we’re continuing to add more and more features to the platform.

This includes the implementation of new payments solutions that will increase access to transaction data and enhance our ability to provide a fully integrated, fully digital loyalty and payments experience to merchants and their shoppers.

We also have a number of UK propositions going live in the coming months and, having recently closed our pre-seed funding round, are quickly looking at raising a larger seed round to ramp up our product roadmap and continue to build out our team.

In parallel with these activities, we’re looking at expanding into new geographic markets, already working on some exciting opportunities overseas.

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StartupsStaff WriterDavid John, Loyalize, Startups, Loyalty programmes, Payments, Omnichannel retail, FinTech, Open Banking, PSD2, Coronavirus, Funding roundsComment