a world w/o "rewards"?

This is a newsletter about regulatory hacking featuring (mostly) Canadian startups.
Every week, I contextualize a Canadian startup in the legislative landscape.
Because all start-ups need a policy strategy to succeed.

case study: drop rewards 
legislative pages: a world without work
space:  synthetic biology 
tune:  drive me, crazy  


case study: Drop Rewards

I am low-key obsessed with rewards programs. I suppose I should find a way to study them more deeply—it’s sort of dream gig, alongside helping drive regulation of chatbots (which I do not believe should be allowed to masquerade as humans) in Canada, and *officially* being part of something important and cool related to space policy (also - wait for it - in Canada). I digress.

Toronto-based Drop is a “coalition customer loyalty program” where users earn points with the brands of their choosing, using their linked debit or credit cards.

Drop is the first intelligent rewards program to surface personalized offers based on the way you spend.

Anyways - I have been thinking about Drop Rewards lately in a recession context, where we are more likely to reach for savings at the margin, and wondering how that behaviour might manifest on apps. BTW it’s not that “early” a company - it was founded in August 2015 and announced a $44M USD Series B round last August. It is, by many metrics, super successful. Does that make it good? Five years in, I ask:

Is there anything useful to learn from the company’s popularity among a mostly-millennial user base?

PS. Is Amazon a “brand” ? I am not a marketer. ☝️

In the US, the last recession created a nation of coupon clippers. So we might expect people to become (and stay) more frugal and risk averse with their spending in the months to come. Now is the time to be clever about incentivizing saving.

Most of the literature around recessions and spending is appropriately focussed on household goods and groceries, but Drop is different. It seems to be focussed on a client with disposable income who is open to the manipulative gamification that has come to characterize digital rewards programs. In exchange for modest sums in redeemable gift cards, participants in the program offer information on every single banking transaction they engage in with their debit and credit card, via Plaid. You can look at that in two ways: the blasé will say the bank has it anyway, might as well get some cash back on it. On the other hand, wow: that’s a spicy meatball (of valuable information). For instance, one of the products Plaid sells is - literally - transactional data.

Reward schemes like these can be irksome, especially because the value proposition of shopping AND saving at the same time can be counter-intuitive. It’s also worth reflecting on how rewards have evolved: they used to be “dumb” and universalized - aka coupons (which still exist, I get it) and now rewards programs tend to be increasingly sophisticated and based on your past shopping behaviours. I think it is the ~personalization~ of these offers themselves that is most disconcerting - I have no trouble with people earning and redeeming points for their shopping, but feel unsettled about the potential inequities from an algorithm generating different offers for different people.

It’s up to us to decide whether that aspect is worthy of further study. I love to hear from people that read this (thank you) so feel free to shoot me a note or comment below. In the meantime here’s a paper on the ethical considerations of opt-in loyalty programs and price discrimination.

🏢 regs

+ Ontario’s Consumer Protection Office has a page re: Rules for loyalty reward points.

+ The Government of Canada’s Ministry of Innovation, Science and Economic Development Canada has a page re: Reward and customer loyalty programs.

Both of these guidelines are silent on whether differentiated discounts are appropriate and both encourage you to read the Terms of Service. 😉

🤑 riches

Transactional data is valuable, and of great interest to marketers. The brands “on” Drop are probably benefiting from some sort of advantage derived from analyzing the broader shopping population habits of the entire Drop community. In return, some people get gift cards. It’s asymmetric for sure. Let’s not pretend that the app is making a deeply meaningful difference when people shop (I mean, a dollar is a dollar but c’mon).

A last thought: Drop could be seen as an indicator of receptiveness to Open Banking in Canada. If I were advocating for this, I would just point to all the places it is already essentially happening, instead of constantly hypothesizing about how awesome it will be. #justsaying

🤓 Read more (about Drop, not open banking):

A World Without Work

Right now policy people are pretty focussed on getting people “back” to work. I don’t want to distract anyone, but we shouldn’t lose sight of how automation is increasingly taking on tasks that were previously performed by humans.

Brookfield’s Creig Lamb asked whether technology adoption amidst the pandemic will leave Canada further behind back in May. While his focus was on tech take up, I really appreciated his analysis. Susskind’s book describes the trends associated with automation, and also prompts us to deeply consider a range of potential policy (and personal) responses to a world with less work, and potentially more leisure, as tasks become increasingly unbundled. He also asks the reader: what does it mean to lead a meaningful life? which is worth meditating on in any context.

I’m interviewing David “at” the Toronto Public Library (it’s online) this Friday at noon. Bring your lunch, eat unselfconsciously and learn about technological unemployment. Or just read some of the links below.

Read more:

space: synthetic biology

Maybe you saw the great news that the Canadian Space Agency (CSA) is now led by Lisa Campbell. I did, and I cheered, and then I saw the graphic below and I loved it so much.

I am hoping that she might make genomics more central to her space agenda. For instance, NASA Is Quietly Funding This Project To Understand How Synthetic Biology Can Support Human Life In Space. Canada has huge strengths in these areas, and the solutions to living on Mars and adapting to climate change are “essentially the same.” 

There is a huge proportion of physical materials that can be produced by bio-routes, meaning that we can build more parts and products through sustainable, renewable processes. Genomics is both making things - like jet fuel, vanilla, nylon, beauty products, and other items that ordinarily depend on petrochemicals green, and making green things [like trees and crops] healthier and more resilient. Essentially, genomics uses the power of nature, calibrated with best-in-class science, to reduce petrochemical reliance and build products with the computational basis of nature. Literally the coolest.

*For more on genomics, the latest RBC disruptors podcast looks at the role of genomics in Canada’s economic recovery.

Again, I offer links:

tune: Orville Peck - Drive Me, Crazy

A trucker love song! This is the second of Peck’s songs I snuck in. Cannot get enough of his subversive sound. And he recently partnered with Shania on “Legends Never Die.” I dedicate this track to my friend that diplomatically tried to explain that “no one wants music videos.”

You shift on the gear, it's been a long year
We're droppin' the hammer, got places to be
No time for the past if you're speedin' by me
Breaker-breaker, you there? Keep me company

Vass Bednar writes “regs to riches” and is a public policy entrepreneur.

She can be reached at vasiliki.bednar@gmail.com or follow her (er, me) on Twitter @VassB.

Archives available via regstoriches.substack.com