American Express Co. is working with Boston-based LevelUp on a pilot with Levi Strauss & Co. Levi’s stores in three major U.S. cities during which cardholders may receive statement credits by using a smartphone application that supports discounts for shopping at the clothing retailer.
The move is an expansion of AmEx’s Smart Offer application interface that connects two platforms to provide mobile discounts when cardholders use their cards for payment. AmEx also used the Smart Offer application interface during a retail-loyalty pilot with Foursquare Labs Inc. at the South By Southwest music and technology conference in March (
LevelUp operates a mobile-loyalty system that rewards customers for shopping at participating retailers in San Francisco, Philadelphia and Boston. LevelUp is backed by Google Ventures, among other investment partners, and was founded by SCVNGR Inc., which created the mobile-based scavenger hunt social media application.
AmEx was attracted to the system’s ability to promote repeat shopping because users can earn points to get to higher “levels” of loyalty from which they receive more lucrative discounts, according to David Wolf, AmEx vice president of global marketing capabilities.
“For AmEx, our strategy is to continue to go where our cardholders and merchants are, and more and more they are in the digital space, using social media and daily-deal sites and applications,” Wolf tells PaymentsSource. “Clearly this is a very crowded space, and we feel LevelUp stands out from the crowd and is doing something really different with a loyalty platform.”
Cardholders download the LevelUp application to their phone and use it to enroll their AmEx cards in the system. They then may access discounts when they use their AmEx card at a participating Levi’s store. The application works with Apple Inc. iPhones and phones that use Google Inc.’s Android operating system.
In the new AmEx pilot, cardholders in San Francisco, Philadelphia and Boston may enroll their cards in the LevelUp system by going to the LevelUp website and selecting their city. Once enrolled, AmEx will provide them a $20 statement credit for Level 1 status when they spend $10 at the Levi’s store using their AmEx card. For Level 2, AmEx will give cardholders a $30 statement credit for spending $10 at the store, and for Level 3 a $50 credit for spending $10.
AmEx is able to make such deals work because of the nature of the company, Wolf says.
“This all goes back to the fact that we’re the card issuer, the merchant acquirer and the payments network; that is our advantage,” he says. “We have unrivaled end-to-end transaction information, and it’s that information that powers these new digital marketing capabilities.”
The Smart Offer marketing and loyalty platform is built on top of that information, Wolf adds.
AmEx’s deal with LevelUp represents another step in developing mobile loyalty initiatives, one analyst says.
“AmEx in particular has been very transparent about [its] desire to try a lot of different things,” says Megan Bramlette, director of knowledge at Auriemma Consulting Group in New York. “It’s a pretty small test with relatively low risk and not a huge exposure; they should get an interesting chunk of data that will show them who is using these kinds of [mobile] products.”
The initiative also demonstrates AmEx’s interest in attracting the younger market, namely those under 40 years old, Bramlette says. “And it encourages existing AmEx cardholders to use their card in different ways,” she says, noting her expectation that AmEx will do more similar mobile tests.
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