Saturday 12 October 2013

How about paying for your shopping on a monthly basis (on your loyalty card)?

The economic system we're living in has, over the last number of years, evolved from being a "pay as you go"  (fixed one off payments) society to becoming a "period-pay" (regular fixed monthly payments) society.  An example is the phone systems we use, where we (largely) moved from landlines to mobile phones, where we now commonly pay a fixed monthly fee, regardless of how much we use (based, of course, on a fair usage policy). In the old days, you paid a small monthly fee, and your final fee was based on your usage.
Now it's becoming more and more based on a monthly model.

Hence I foresee this trend continuing into the future, whereby this will extend to other business models. e.g. On average you might pay €40-50/day for your daily shop, where Supermarkets might adopt a system whereby you use a loyalty card to shop each day for free, but you pay up front a fee of (say) €300/week. These models are very attractive for suppliers, as they provide a guaranteed monthly income, making revenues much easier to predict into the future. Hence I expect this fixed periodic payment model will become the norm for society in the future across a range of business offerings.