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Google strengthens loyalty card business

This is the second big news in the sector this week with Nokia announcing its 'Perks' paperless discount coupons service earlier this week.

Google has acquired smartphone-based loyalty card developer Punchd. This acquisition is likely to strengthen ‘Google Offers’ business, which is a loyalty based service going to get live soon (its already live in Beta form).

The way Punchd works is simple: The participating stores are supplied with a QR code, which is like a barcode that you can scan. Every time you buy something from a store that’s part of a customer loyalty program, you get to scan a QR code.
The Punchd app keeps track of how many times you’ve punched QR codes and alerts the user when they get their freebie.

Googles entry into the space is the second big one after Nokia entered the business with its ‘Perks’ service earlier this week. Groupon, which is the established player in this space is going to face a tough competition with these two biggies around.

While Groupon, which has recently bought an Indian deals website ‘SoSasta’, is already an established player in the country, Nokia and Google are just entering the business here. But since both Nokia and Google have much larger customer base already, it is likely that Groupon is going to have tough time surviving.

Google, which has a well established relationship with local merchants across the world thanks to its adsense business and advertising on the Google map, will be in a better position to rope in the merchants to offer best deals for the users of ‘Google Offers’ service.
Similarly Nokia, which still commands a 30-50 per cent market share of the handset market and therefore is also present in the Maps business (Navteq) thanks to the bundled maps on its handset, will also find it easier to snap deals with the local merchants.

Whatever the case may be, it will be a win-win situation for the consumer who will stand a chance to get lucrative deals while shopping right in their mobile phones. The loyalty card business gives regular shoppers an opportunity to get the best deals through loyalty coupons, which is given by the participating merchants to increase customer retention with the brand or store.

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