House of Fraser understands the importance of customer ownership

This is not the first innovation to come out of House of Fraser, which is owned by a Chinese conglomerate, Sanpower. There is already a loyalty and credit card scheme, but it is the app element that makes the difference.

As more and more customers lose any sense of loyalty to brands, retailers need to find ways to keep them focused. Banking comes with two advantages: it manages the heart of the transaction journey, the payment. Also, it collects a breadth and depth of data that will enable House of Fraser to market more intelligently to its customers.

But much more importantly, the primary connection point between retailers and customers will be the app that sits on their smartphones. This will become the window, the store, the stock, the checkout, and the payment all in one, bound together in a seamless experience.

This is true mobile retailing – and while other retailers have developed one or more of these elements into a single offer, House of Fraser is clearly attempting to build the whole thing in one go.

The question now is surely whether they can achieve this. A lot of technology and processes have to come together to enable it to work, and there is always the chance that, even if the tech works, the experience for the customer may not be perfect. These are all challenges for House of Fraser; good job there is no shortage of great talent at the top.

You can see the trend for digital-only banks; Tandem is about half the size of better-known Atom Bank and there are two other small ones, Starling and Monzo. They are all in the business of services marketing, as opposed to the traditional banks who are in the banking business, with all its limitations and poor reputation.

Given both sides’ interest in customer acquisition and retention, we can expect to see a lot more retail app development this year. This will be a more commercial purpose than the simple marketing wallpaper that we see now.