Consumer Insight:
Loyalty Means More than a Loyalty Programme
In a crowded market, customer loyalty must be earned through the core proposition, then reinforced through relevant benefits.
When shoppers are this selective, loyalty is worth fighting for.
Consumers show stronger preferences for a small number of retailers in frequent, essential categories such as grocery, while discretionary purchases are more likely to involve shopping around.
Our research finds that the strongest drivers of loyalty remain fundamental aspects of the retail proposition: value for money, reliable product quality, convenience and trust.
Put simply, no points scheme can rescue a weak proposition. Programme benefits can strengthen these relationships, but they are less important than the core proposition in preventing customers from switching.
That does not make programmes irrelevant. Designed well, they change behaviour.
Across the research, 44% of loyalty programme members report increasing or redirecting spending as a result of their membership. This effect is particularly pronounced among younger generations, with 60% of Millennials and 56% of Gen Z respondents reporting a change in spending behaviour, compared with 25% of Baby Boomers.
Across the research...
of loyalty programme members report increasing or redirecting spend as a result of their membership
of Gen Z respondents report a change in behaviour as a result of membership
of Baby Boomers respondents report a change in behaviour as a result of membership
The strongest loyalty strategies start with a compelling retail proposition, using relevant rewards and experiences to deepen relationships with consumers and increase share of wallet over time.