Drop, an app for getting rewards and participating in loyalty programs, first rolled out across Canada this summer. Only a few months later, over 70,000 millennials have linked their credit or debit cards to the app, collecting rewards points from global retailers.
The app isn’t exactly reinventing the wheel: it helps users collect points they can then put toward claiming gift cards from retailers.
But a few key differences set Drop apart from other apps and services out there:
- Users link both their credit and debit cards to the app, so they collect the points based off their purchases. A debit card purchase of a coffee at Starbucks, for example, will count toward earning a gift card to the store. Any credit card purchases earn you double points
- Drop collects various rewards programs on one app, seemingly eliminating the need to keep physical loyalty cards in your wallet
- Drop uses an algorithm to target users with offers and reward they will like based on their spending habits, rather than serving them standardised offers
And there’s one major difference that founder and CEO Derrick Fung says is attracting millennial users in droves: instant gratification.
“All the rewards come to you immediately and you don’t have to do anything,” Fung told Business Insider. “We think millennials — some call them lazy — but they want seamless experiences.”
What young people want
Fung has spent his career working to figure out the needs of millennials. The Canadian native is a serial entrepreneur and Wall Street veteran who learned to code at 16 and built a massive web database for sheet music — one of the largest on the web at the time, he says.
He later went on to start his second company, Tunezy, a platform where artists could sell anything from backstage passes to meet-and-greets at shows. Artists like Gwen Stefani and the Goo Goo Dolls were on Tunezy, and Fung later sold the startup to electronic music concert producer SFX Entertainment in 2013.
Fung went on to create Drop on the premise that the next major platform would be one that allows marketers to target people based on what they’re already spending on. With Drop, companies pay to serve offers to people who are spending on similar products or who have spent with them in the past. Drop partners with retailers like Zara, Forever 21, Amazon, Best Buy, and Lululemon, and consolidates those companies’ loyalty programs within the app.
“It makes no sense for brands to continue to build their own [loyalty program] and we think it’s time for a consolidated program to bring together all the rewards and loyalty programs into one platform,” Fung said. “In turn, we’ll allow marketers to target these people.”
Fung says it takes about a month on average to redeem a reward, but some can be redeemed within a week. My grande coffee and bagel at Starbucks earned me 41 points — for every $1 I spend there, I get 10 points.
Next up: United States
After building up a base of 70,000 millennial-aged customers actively using the app in Canada and reaching No. 3 in the App Store, Drop is coming stateside. The app is currently rolling out in private beta in the US with plans to launch in New York City, San Francisco, and Austin in the first six months of 2017.
Fung says the app has been most popular among college-aged women, and hinted at targeting university-heavy regions down the line.
“In Canada and other parts of the world, loyalty and rewards is a much more mature market,” he said. “But in the US, there hasn’t been one player that has been able to cover the whole US nationally. With a lot of these types of companies and even financial institutions, we’re able to help them speak to the younger demographic better than they can.”
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