We are working on building a better loyalty program that allows holders to trade their points between shops if points are left unused. We are still deciding on our vertical, but we have been starting to think about retail and consumer goods, such as beverages at coffee shops or bars.
From this article, the loyalty management market will be worth 17.65B by 2028 (TAM).
In our hypothesized vertical of Retail + Consumer Goods (Beer, Wine, Liquor), we would be going after 20% of our TAM which is 3.53B (SAM).
We think we can capture 0.05% of our SAM, which gives us about a 17.5M SOM.
There are about 3000 bars in SF according to SF Insider (https://sfinsider.sfgate.com/what-is-the-approximate-number-of-bars-in-san-francisco/)
I interviewed two bar-goers: college-aged student who frequents bars in Vancouver and London (A), and a recent Stanford grad who works SWE in SF and goes out often on the weekends (S). Both emphasized the need the for a lowest-friction system for rewards points — the ratio of the marginal value of loyalty programs to the effort to get that value must be very high. Neither would be convinced to go out or drink more, and wanted a lot of added value to be convinced to go to a new bar. Both also mentioned budgeting more by how many drinks they get, more than the pricing itself of the drink. Choosing a new bar to go to is more a matter of convenience than anything else — A mentioned that, above a certain threshold of quality of bars, the main determining factor is merely proximity to home. S also mentioned something similar — being in SF, he had more options for bars but also prefers close bars, especially given uber prices.
