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Price Promotions and Loyalty Schemes - Ireland - April 2012

Consumer spending power has taken a nosedive between 2008 and 2012, with consumers finding themselves with less money to spend, and growing household costs. Thus the hunt for bargains is helping to sustain the popularity of loyalty cards in retail stores, and is driving the proliferation of deal-of-the-day websites among Irish consumers.

This report looks at the trends driving the use of price promotions and loyalty cards, as well as consumer attitudes towards loyalty cards and deal-of-the-day websites.

Key themes in the report

  • What factors are driving loyalty card and deal-of-the-day website usage? – What role does diminished income and poverty play in their usage?
  • How has the economic downturn affected spending habits? – What impact is the recession having on Irish consumers’ willingness to spend?
  • Can promotions and discounting be counter-productive? – Do the discounts and savings offered by promotions and loyalty cards impact upon the brand strength of retailers, restaurants, etc?
  • Are Irish consumers worried about privacy issues when using loyalty cards? – What level of concern do Irish consumers exhibit about handing over personal details when subscribing to loyalty cards / deal-of-the-day websites? Are consumers receptive to cross-selling initiatives?
  • How important are promotions in prompting Irish consumers to try something new? – Can cost savings and promotions help to attract new consumers to a product/ service?

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Table of contents

  1. Issues in the Market

      • Key themes in the report
        • Definition
          • Data sources
            • Abbreviations
            • Insights and Opportunities

              • Budgeting consumers will demand better prices
                • Going mobile increasingly important
                • Market in Brief

                  • Irish consumers have a strong appetite for a bargain
                    • Low earnings and high costs of living necessitating the need for price promotions and loyalty schemes
                      • Drive for low prices might erode brand value
                        • Deal-of-the-day sites appeal more to RoI consumers
                          • Women the main users of loyalty cards and DOTD websites
                            • Higher net access helping to drive usage of DOTD websites
                            • Fast Forwards

                                • Trend 1: Brand Review
                                  • What’s it about?
                                    • What we’ve seen
                                      • What next?
                                        • Trend 2: Make it Mine
                                          • What’s it about?
                                            • What we’ve seen
                                              • What next?
                                              • Internal Market Environment

                                                • Key points
                                                  • Consumers are being more careful with their spending
                                                    • Figure 1: Agreement with the statement ‘I spend money more carefully than I used to’, NI and RoI, 2007-11
                                                  • Income levels take a hit
                                                    • Market ripe for loyalty cards and special offers
                                                      • More consumers identifying themselves as ‘bargain hunters’ and using coupons
                                                        • Figure 2: Agreement with the statement ‘I am a bargain hunter’, NI and RoI, 2007-11
                                                      • Value for money and low prices the most important factor when shopping
                                                        • Figure 3: The top five most important factors for consumers when deciding where to complete their grocery shopping, NI and RoI, August 2011
                                                      • Drive for value eroding brand power
                                                        • Figure 4: Agreement with the statement ‘Branding does not matter to me as long as I get good value for money’, NI and RoI, 2010 and 2012
                                                      • Increase in internet usage
                                                        • Figure 5: Internet used in the last 12 months, NI and RoI, 2004-11
                                                        • Figure 6: Consumer daily internet usage, NI and RoI, February 2012
                                                      • Social media sites a key channel for promoting offers and discounts
                                                        • Figure 7: Social networking sites that respondents currently access, NI and RoI, August 2011
                                                        • Figure 8: Top ten brands on Facebook Ireland*, 2011
                                                      • Are consumers worried about privacy issues?
                                                        • No, they aren’t
                                                          • Figure 9: Agreement with the statement ‘I worry about the personal information collected by loyalty card/ deal-of-the-day providers’, NI and RoI, February 2012
                                                        • DOTD websites set to have strong impact on tourism market
                                                          • Figure 10: Consumers taking domestic or foreign holidays/short breaks over the next 12 months, NI and RoI, 2011
                                                      • Broader Market Environment

                                                        • Key points
                                                          • Weak recovery doing little to jump-start consumer spending
                                                            • Figure 11: Economic outlook, NI and RoI, 2010-13
                                                          • Consumers still cautious in spending
                                                            • Figure 12: Consumer Sentiment/Confidence Index, UK (inc NI) and RoI, April 2008-April 2012
                                                          • Heavy debt burden helping to drive need for vouchers and coupons
                                                              • Figure 13: Agreement with the statement ‘I don’t like the idea of being in debt’, NI and RoI, 2007-11
                                                            • Unemployment levels expected to remain high until 2015
                                                              • Figure 14: ILO unemployment rate (% of labour force), actual and projected, NI and RoI, 2008-15
                                                            • Consumer prices increase in both NI and RoI
                                                              • More one-person households create more ‘main shoppers’
                                                                • Figure 15: Projected households, by size, NI, 2006-31
                                                                • Figure 16: Projected households, by size, RoI, 1991-2006*
                                                            • Competitive Context

                                                              • Key points
                                                                • Own-label brands continuing to capture market share
                                                                  • Figure 17: Agreement with statements relating to consumers perceptions of own-label goods, NI and RoI, February 2012
                                                                • Own-label value range sees strong growth in RoI
                                                                  • Figure 18: Value range own-label goods purchased in the last 12 months, NI and RoI, 2010 and 2012
                                                                • Discounters grow in popularity between 2010 and 2012
                                                                  • Figure 19: Discounter retailers shopped at in the last 12 months, NI and RoI, 2010 and 2012
                                                                • Consumers shop at discounters for bargain-hunting purposes
                                                                  • Figure 20: Attitudes towards shopping in discounters, NI and RoI, May 2010
                                                              • Strengths and Weaknesses

                                                                • Strengths
                                                                  • Weaknesses
                                                                  • Who’s Innovating?

                                                                    • Key points
                                                                      • Tesco introduces several innovations to its Clubcard
                                                                        • Nectar card offering points to watch advertisements
                                                                          • Smartphone-only reward scheme
                                                                            • O2 UK relaunches Priority Moments loyalty scheme
                                                                              • Rewarding disloyalty?
                                                                              • Companies and Products – Loyalty Cards

                                                                                  • Tesco and the Tesco Clubcard
                                                                                    • Nectar Loyalty Card
                                                                                      • Dunnes Value Clubcard
                                                                                        • SuperValu Real Rewards
                                                                                          • Superquinn Reward Card
                                                                                            • Iceland Bonus Card
                                                                                              • Boots Advantage Card
                                                                                                • Co-operative Membership
                                                                                                  • B&Q Diamond Card
                                                                                                    • Superdrug Beautycard
                                                                                                      • Debenhams Beauty Club Reward Card
                                                                                                        • HMV Pure Reward Card
                                                                                                          • Waterstones Loyalty Card
                                                                                                            • Starbucks
                                                                                                              • Subway
                                                                                                              • Companies and Products – Deal-of-the-Day Websites

                                                                                                                  • Groupon
                                                                                                                    • Pigsback
                                                                                                                      • LivingSocial
                                                                                                                        • Treat Ticket
                                                                                                                          • Mighty Deals
                                                                                                                            • Grab One
                                                                                                                              • Grab It Now
                                                                                                                                • Dealtastic
                                                                                                                                  • Onoffer.ie
                                                                                                                                    • Deal Rush
                                                                                                                                      • KGB Deals
                                                                                                                                      • The Consumer – Loyalty Cards Usage

                                                                                                                                        • Key points
                                                                                                                                          • Majority of consumers use three or more loyalty cards
                                                                                                                                              • Figure 21: Loyalty cards or reward schemes used by consumers, NI and RoI, February 2012
                                                                                                                                            • Women are the main subscribers to loyalty cards
                                                                                                                                                • Figure 22: Loyalty cards or reward schemes used by consumers, by gender, NI and RoI, February 2012
                                                                                                                                                • Figure 23: Gender and marital status of main shoppers, NI and RoI, 2011
                                                                                                                                              • Consumers don’t always use their points to the fullest
                                                                                                                                                • Tesco is king of the hill
                                                                                                                                                  • Figure 24: Top five food retailers shopped at the most often in the last month, NI and RoI, February 2012
                                                                                                                                                • Older consumers exhibit strongest ownership of grocery loyalty cards
                                                                                                                                                  • Figure 25: Consumers who use a grocery retailer loyalty card, by age, NI and RoI, February 2012
                                                                                                                                                • Delayed adulthood may negatively impact loyalty card ownership levels
                                                                                                                                                  • NI consumers show stronger ownership of coffee shop/sandwich shop loyalty cards
                                                                                                                                                      • Figure 26: Those who use a coffee shop or sandwich shop loyalty card, by age, NI and RoI, February 2012
                                                                                                                                                    • B&Q targets a specific age group
                                                                                                                                                    • The Consumer – Deal-Of-The-Day Website Usage

                                                                                                                                                      • Key points
                                                                                                                                                        • Groupon top DOTD in a growing market
                                                                                                                                                          • Figure 27: Deal-of-the-day websites subscribed to, NI and RoI, February 2012
                                                                                                                                                        • DOTD market value set to continue growing
                                                                                                                                                            • Figure 28: Estimated level of consumer expenditure on deal-of-the-day websites, IoI, NI and RoI, 2010-15
                                                                                                                                                          • The downside of using DOTD sites
                                                                                                                                                            • Women the strongest users of Groupon
                                                                                                                                                              • Figure 29: Consumers who subscribe to Groupon, by gender, NI and RoI, February 2012
                                                                                                                                                              • Figure 30: Agreement with selected statements, by gender, NI and RoI, 2011
                                                                                                                                                            • 25-44-year-olds most likely users of Groupon
                                                                                                                                                              • Figure 31: Consumers who subscribe to Groupon, by age, NI and RoI, February 2012
                                                                                                                                                            • Pigsback more popular among RoI consumers
                                                                                                                                                                • Figure 32: Consumers who subscribe to Pigsback, by marital status, NI and RoI, February 2012
                                                                                                                                                              • LivingSocial has appeal to both NI and RoI consumers
                                                                                                                                                                  • Figure 33: Consumers who subscribe to Groupon, Pigsback or LivingSocial, by socio-economic group, NI and RoI, February 2012
                                                                                                                                                                • Who are the non-subscribers?
                                                                                                                                                                    • Figure 34: Consumers who have accessed the internet in the last 12 months, by age, NI and RoI, 2011
                                                                                                                                                                • The Consumer – Attitudes towards Loyalty Cards and Deal-Of-The-Day Websites

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Low prices preferable to points or incentives
                                                                                                                                                                      • Figure 35: Agreement with statements relating to price promotions and loyalty schemes, NI and RoI, February 2012
                                                                                                                                                                    • Lower prices in high demand
                                                                                                                                                                        • Figure 36: Agreement with selected statements relating to price promotions and loyalty schemes, by gender, NI and RoI, February 2012
                                                                                                                                                                      • A quarter of consumers enjoy saving reward points
                                                                                                                                                                        • Figure 37: Agreement with the statement ‘I enjoy saving with a loyalty card or deal-of-the-day offer’, by gender, NI and RoI, February 2012
                                                                                                                                                                      • Instant users vs. savers
                                                                                                                                                                          • Figure 38: Agreement with selected statements relating to loyalty point usage, NI and RoI, February 2012
                                                                                                                                                                        • RoI consumers have a stronger appetite for DOTD websites
                                                                                                                                                                            • Figure 39: Agreement with the statement ‘Deal-of-the-day websites have great offers’, by age, NI and RoI, February 2012
                                                                                                                                                                          • DOTD sites unable to motivate many to try new things
                                                                                                                                                                            • Demand for the personal touch
                                                                                                                                                                            • Consumer Typologies

                                                                                                                                                                              • NI target groups
                                                                                                                                                                                • Figure 40: Consumer typologies, NI, February 2012
                                                                                                                                                                              • Low Users
                                                                                                                                                                                • Points Savers
                                                                                                                                                                                  • Lower Pricers
                                                                                                                                                                                    • Points Users
                                                                                                                                                                                      • RoI target groups
                                                                                                                                                                                        • Figure 41: Consumer typologies, RoI, February 2012
                                                                                                                                                                                      • Uncaring
                                                                                                                                                                                        • Points Treaters
                                                                                                                                                                                          • Personal Discounters
                                                                                                                                                                                            • Pricers
                                                                                                                                                                                            • Appendix

                                                                                                                                                                                              • NI price promotion and loyalty cards data
                                                                                                                                                                                                • Figure 42: Loyalty cards or reward schemes used by consumers, by demographics, NI, February 2012
                                                                                                                                                                                                • Figure 43: Loyalty cards or reward schemes used by consumers, by demographics, NI, February 2012 (continued)
                                                                                                                                                                                                • Figure 44: Loyalty cards or reward schemes used by consumers, by demographics, NI, February 2012 (continued)
                                                                                                                                                                                                • Figure 45: Types of online discount providers (deal-of-the-day websites) consumers currently subscribe to, by demographics, NI, February 2012
                                                                                                                                                                                                • Figure 46: Types of online discount providers (deal-of-the-day websites) consumers currently subscribe to, by demographics, NI, February 2012 (continued)
                                                                                                                                                                                                • Figure 47: Agreement with statements relating to promotions and loyalty schemes, by demographics, NI, February 2012
                                                                                                                                                                                                • Figure 48: Agreement with statements relating to promotions and loyalty schemes, by demographics, NI, February 2012 (continued)
                                                                                                                                                                                                • Figure 49: Agreement with statements relating to promotions and loyalty schemes, by demographics, NI, February 2012 (continued)
                                                                                                                                                                                              • RoI price promotion and loyalty cards data
                                                                                                                                                                                                • Figure 50: Loyalty cards or reward schemes used by consumers, by demographics, RoI, February 2012
                                                                                                                                                                                                • Figure 51: Loyalty cards or reward schemes used by consumers, by demographics, RoI, February 2012 (continued)
                                                                                                                                                                                                • Figure 52: Loyalty cards or reward schemes used by consumers, by demographics, RoI, February 2012 (continued)
                                                                                                                                                                                                • Figure 53: Types of online discount providers (deal-of-the-day websites) consumers currently subscribe to, by demographics, RoI, February 2012
                                                                                                                                                                                                • Figure 54: Types of online discount providers (deal-of-the-day websites) consumers currently subscribe to, by demographics, RoI, February 2012 (continued)
                                                                                                                                                                                                • Figure 55: Agreement with statements relating to promotions and loyalty schemes, by demographics, RoI, February 2012
                                                                                                                                                                                                • Figure 56: Agreement with statements relating to promotions and loyalty schemes, by demographics, RoI, February 2012 (continued)
                                                                                                                                                                                                • Figure 57: Agreement with statements relating to promotions and loyalty schemes, by demographics, RoI, February 2012 (continued)
                                                                                                                                                                                              • NI consumer typologies tables
                                                                                                                                                                                                • Figure 58: Consumer typologies, by demographics, NI, February 2012
                                                                                                                                                                                                • Figure 59: Loyalty cards or reward schemes used by consumers, by consumer typologies, NI, February 2012
                                                                                                                                                                                                • Figure 60: Types of online discount providers (deal-of-the-day websites) consumers currently subscribe to, by consumer typologies, NI, February 2012
                                                                                                                                                                                                • Figure 61: Agreement with statements relating to promotions and loyalty schemes, by consumer typologies, NI, February 2012
                                                                                                                                                                                              • RoI consumer typologies tables
                                                                                                                                                                                                • Figure 62: Consumer typologies, by demographics, RoI, February 2012
                                                                                                                                                                                                • Figure 63: Loyalty cards or reward schemes used by consumers, by consumer typologies, RoI, February 2012
                                                                                                                                                                                                • Figure 64: Types of online discount providers (deal-of-the-day websites) consumers currently subscribe to, by consumer typologies, RoI, February 2012
                                                                                                                                                                                                • Figure 65: Agreement with statements relating to promotions and loyalty schemes, by consumer typologies, RoI, February 2012

                                                                                                                                                                                            Companies Covered

                                                                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                            Price Promotions and Loyalty Schemes - Ireland - April 2012

                                                                                                                                                                                            £1,095.00 (Excl.Tax)