Swipii: Making small businesses competitive through digital loyalty

I am a creature of habit and tend to frequent what I know and trust. In addition, I am a deeply loyal customer and I especially like to support local, one-off stores.  I have probably had more salads, skinny frappuccinos, bagels and cream cheese at Cachao, here in Primrose Hill, over the past twenty years than I have at my own home. I have also had more meals at Lemonia, another local hunt, than I can bear to count. It would be nice to get something in return but these establishments just don’t have the infrastructure or the resources to set up the sophisticated, digitally-enhanced rewards systems that bigger retailers can afford.

Not far away from our office, next to the Finchley Road tube station is a trendy cafe, The Loft, that I have often stopped by on weekends and for a pre-work caffeine jolt. On a recent visit, I noticed that The Loft had installed an iPad next to its register, beckoning me to tap a Swipii loyalty card. Having met with the founders of Swipii, Chitresh Sharma and Louis Schena, a few weeks before, I picked up a card – a small, blue keyring card with a squid on the front and a barcode on the back. Filling in my email address and holding the barcode under the scanner, I was informed that I was on my way to a free coffee, which I would get after collecting 55 points. And with each visit worth five points, it would only be a matter of time before all of those visits would start to pay off.

Founded in Glasgow in 2014, when Chitresh and Louis were students at the University of Strathclyde and Stirling University, Swipii is a loyalty program for small- and medium-sized businesses using a swipe card, on the customer side, and a mobile app on the retail side. Still in the test phase, over 600 businesses have already signed up to the program, mostly in London, Glasgow, Edinburgh, Newcastle, Birmingham and Liverpool, and the rewards are tailored to each company – one cupcake shop even offers a two-hour personal baking lesson with the head chef, if customers can stop in often enough!

Chitresh and Louis were inspired by the independent businesses in Glasgow that have high footfall, but lack the time or resources to develop any loyalty programs more complex than the standard ‘buy-10-get-one-free’ stamp card. Unlike Groupon and Livingsocial, which cater to the same small businesses and offer a large burst of customers, Swipii promises businesses a continual stream of patrons by building better relationships with existing customers. Doing so, Chitresh and Louis contend, allows small and independent businesses to earn more sustainable growth and fight back against big multinationals. Says Chitresh: “We started Swipii to solve the two biggest problems faced today by small and medium sized businesses in the retail sector. The first problem, which is a lack of collection of shopper data, leads to the second, which is no communication. Our vision is to become the Salesforce.com of hyperlocal retail. We want to give the power of systems such as Tesco’s Clubcard to small and medium size retail businesses.”


Swipii founders Louis Schena and Chitresh Sharma

Loyalty cards are one area of retail that has typically been branded, even when operated by third-party companies such as Aimia, which has worked with companies such as Sainsbury’s Nectar Card, Eastern Mountain Sports, and Coca-Cola. Branded cards have the advantage of serving as a form of advertising: when customers look at their keyrings and realise that they need to pick up supper, they know where to go for their groceries. And there’s no arguing that customer loyalty is vital for a business to keep functioning: not only does it cost nearly 10x more to acquire a new customer than to sell to an existing one, but on average, current customers spend 67% more than new customers. According to Swipii, customer loyalty programs increase customer visits by up to 44%, with 80% of a company’s revenue coming from the top 20% of its customers.

The problem until now has been, as Louis and Chitresh noted, that smaller businesses without the resources to create thousands of little plastic cards or a mobile loyalty app did not have any way to incentivise their customers to keep coming back. And for cafes in particular, regular customers are key: in 2014, Starbucks reported that its Starbucks Rewards program played a key role in its 26% profit increase. Furthermore, with the data provided by digitally-enhanced loyalty programs, companies can truly tailor their offerings – and customer rewards – based on what their customers want. This is useful for large companies, who must maintain an efficient offering, but one also based on what receives the best response – and also has the potential to be life-changing for smaller companies.

“Our vision is to become the Salesforce.com of hyperlocal retail. We want to give the power of systems such as Tesco’s Clubcard to small and medium size retail businesses” – Chitresh Sharma, co-founder of Swipii

Beyond the world of lattes and muffins, Swipii works across a large number of businesses, including barber shops, beauty salons and vintage stores, amongst others. The common denominator between all of them is that they are all independent stores, many of which have no more than two or three locations – if even that – sprinkled across London, Glasgow and the rest of the UK. The exponential growth of larger businesses through waves of mergers and acquisitions means that smaller businesses often struggle to maintain their competitive positioning, partially because of reduced bargaining power, but also due to smaller customer bases. By introducing a digitally loyalty program into independently-owned businesses, Swipii is helping these character-filled retail and leisure businesses sidestep at least one of the issues they face.

As a small business ourselves, we’ve always been fighters for the little ones looking to make their mark in a consumer market full of global conglomerates, so it’s particularly exciting to see companies that aim to enable their success. I look forward to when Swipii makes its way over to my two favourites here in Primrose Hill – I’m sure it won’t be long!

Moira@thembsgroup.co.uk | @MoiraBenigson | @TheMBSGroup