Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Retailer Loyalty Programs - US - August 2013

“While consumers increasingly expect a personalized retailer experience, they are also worried about privacy and the use of their personal information. Transparency in data collection and usage is critical to building trust. Convincing them that data collected by retailers is being used to enhance the consumers’ program experience may go a long way to building better relationships.”

– Ika Erwina, Retail and Technology Analyst

Some issues addressed in this report include:

  • The importance of relevant communications in loyalty engagement
  • The privacy paradox in personalized loyalty programs
  • Understanding the needs of Millennials should bring incremental values
Mintel finds that consumers have a tendency to view retailer loyalty programs as money-saving strategies, which unfortunately may not necessarily translate to genuine loyalty.
 
Retailers may need to strengthen their engagement with existing loyalty program members to maximize returns on investment for these schemes. Millennials are a particularly attractive target. 
 
Social responsibility, technology integration, exclusivity, and mobile platform availability are just some of the attributes of a loyalty program that will attract them. Their openness towards exclusivity is an advantage for retailers, as rewards can take the form of soft benefits such as recognition or privileged access to products, events, or content.
 
 For the purpose of this report, a loyalty program—including store credit/debit card or a reward card—is defined as a customer reward program that is offered by a retailer as an incentive for continued patronage and frequent purchases.
Rewards are generally in the form of points, discounts, special offers, rebates, or other prizes. Comparing COLLOQUY Loyalty Census data to Mintel consumer research data: In this report Mintel uses two datasets that measure consumer loyalty. The methodologies differ and result in quite different results, however both are valid.
 
The approaches used can be explained as:
 
The COLLOQUY Loyalty Census measures the total number of loyalty programs in which people are enrolled. So for example if an individual is enrolled in five different grocery store programs, this will be counted as five memberships.
The Mintel data show the share of people who have a loyalty card in any particular retail sector. So for example if an individual is enrolled in five different grocery store programs, this will be counted as one person “enrolled in grocery store programs.”

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Loyalty program membership data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                        • The market
                          • Surge in loyalty membership, but slower growth in active participation
                            • Figure 1: Total U.S. loyalty program memberships and active memberships, 2006-12 
                          • Specialty retailers took the lion’s share, followed by department and grocery stores
                            • Figure 2: U.S. retailer loyalty program membership, by segment, 2010 and 2012
                          • Market drivers
                            • Economic recovery, however sluggish, favors retailer loyalty programs
                              • Despite financial difficulties, youngest consumers continue to shop
                                • Rise in mobile internet access likely to help program engagement
                                  • Growth in purchasing power, population and loyalty enrollment of minorities to benefit loyalty programs
                                    • The consumer
                                      • Loyalty program participation reflects where the consumer tends to shop
                                        • Price-based factors drive consumer recommendation
                                          • Loyalty program membership a catalyst to brand advocacy
                                            • Two in five members have room for more program participations
                                              • Easy reward redemption and point accumulation is important
                                                • Privacy is an important strategic tool in a loyalty program
                                                  • Frustration with time required to earn rewards and the triviality of rewards offered creates barriers to engagement
                                                    • What we think
                                                    • Issues and Insights

                                                        • The importance of relevant communications in loyalty engagement
                                                          • The issues
                                                            • The implications
                                                              • The privacy paradox in personalized loyalty programs
                                                                • The issues
                                                                  • The implications
                                                                    • Understanding the needs of Millennials should bring incremental values
                                                                      • The issues
                                                                        • The implications
                                                                        • Trend Applications

                                                                            • Inspire Trend: Cam Cam
                                                                              • Inspire Trend: Minimize Me
                                                                                • Mintel Futures: Access Anything, Anywhere
                                                                                • U.S. Loyalty Program Memberships

                                                                                  • Key points
                                                                                    • Loyalty memberships are on the rise but showing slower rate in active engagements
                                                                                        • Figure 3: Total U.S. loyalty program memberships and active memberships, 2006-12
                                                                                    • Market Drivers

                                                                                      • Key points
                                                                                        • Sluggish economic recovery favorable to retailer loyalty programs
                                                                                          • Figure 4: U.S. consumer sentiment and unemployment rate, January 2008-June 2013
                                                                                        • Youngest consumers shop in the face of economic woes
                                                                                          • Rise in mobile internet access to facilitate program engagement
                                                                                            • Minority’s spending power may lead to more active engagement in loyalty programs
                                                                                              • Figure 5: Population, by race/Hispanic origin, 2008-18
                                                                                          • Retailer Loyalty Programs—by Retail Sector

                                                                                            • Key points
                                                                                              • Overview
                                                                                                • Figure 6: U.S. retailer loyalty program membership, by segment, 2010 and 2012
                                                                                              • Specialty retailer loyalty programs
                                                                                                • Figure 7: Total U.S. specialty retailer loyalty program membership, 2006-12
                                                                                              • Department store loyalty programs
                                                                                                  • Figure 8: Total U.S. department store loyalty program membership, 2006-12
                                                                                                • Grocery store loyalty programs
                                                                                                  • Figure 9: Total U.S. grocery store loyalty program membership, 2006-12
                                                                                                • Drug store loyalty programs
                                                                                                  • Figure 10: Total U.S. drug store loyalty program membership, 2006-12
                                                                                                • Mass merchandiser and warehouse club loyalty program
                                                                                                  • Figure 11: Total U.S. mass merchant loyalty program membership, 2008-12
                                                                                                • Restaurant loyalty programs
                                                                                                  • Figure 12: Total U.S. restaurant loyalty program membership, 2006-12
                                                                                                • Fuel/c-store loyalty programs
                                                                                                  • Figure 13: Total U.S. fuel/c-store loyalty program membership, 2006-12
                                                                                              • Innovations and Innovators

                                                                                                • Key points
                                                                                                  • Target REDcard: Straightforward savings with no points to convert to rewards
                                                                                                    • Walgreens: Mobile engagement through an app
                                                                                                      • Shopyourway.com: Partnering rewards program with major retailers
                                                                                                        • Nordstrom: Attracting loyalty program members by decreasing spending requirements
                                                                                                          • My Lowe’s: Sharing data with the customer to assist with projects
                                                                                                            • Amazon Prime: Poised for future growth despite possible losses
                                                                                                              • MyPanera: Learning customer preferences to personalize rewards
                                                                                                                • Jamba Juice: Refillable gift cards with a fundraising tie-in
                                                                                                                  • Belly Bites: Loyalty programs for small-to-medium businesses
                                                                                                                    • Target’s Cartwheel: Loyalty engagement through social media
                                                                                                                      • Loyalty Cloud: providing small businesses with consumer spending information through credit cards
                                                                                                                      • Marketing Strategies

                                                                                                                        • Key points
                                                                                                                          • Strategy: Simple ways to redeem rewards, earn points, and access to exclusive deals
                                                                                                                            • Starbucks offers members exclusive deals and ease of earning points via email
                                                                                                                              • Figure 14: My Starbucks Rewards email promotion, July 2013
                                                                                                                            • Walgreens offers cash and other “Just for You” rewards
                                                                                                                              • Speedway highlights fast track to redeeming points
                                                                                                                                • Strategy: Emphasis on better overall value for exclusive members
                                                                                                                                  • Strategy: Offering rewards across noncompetitive channels
                                                                                                                                    • Giant Food Stores rewards points on discount for gas price
                                                                                                                                      • Figure 15: Giant Food Stores online ad, July 2013
                                                                                                                                    • Kmart’s partners with Procter & Gamble in facilitating loyalty engagement
                                                                                                                                      • Figure 16: Kmart online banner ad, July 2013
                                                                                                                                    • Mail promotion on gas savings for Walmart Credit Card members
                                                                                                                                      • Figure 17: Walmart Credit Card loyalty mailing promotion, May 2013
                                                                                                                                    • Strategy: Awarding points just for interaction
                                                                                                                                      • Figure 18: Gilt Insider promotional ad, July 2013
                                                                                                                                    • Strategy: Offering rewards through sweepstakes
                                                                                                                                      • Strategy: Rewards program as a single prong of overall retailer marketing appeal
                                                                                                                                        • Walgreens embodies wellness program in its brand marketing campaign
                                                                                                                                          • Figure 19: Walgreens television ad, “First timers,” January 2013
                                                                                                                                        • Sports Authority’s loyalty program as a piece of the marketing appeal
                                                                                                                                          • Figure 20: Sports Authority television ad, “Sports Authority’s The League: Baseball,” February 2013
                                                                                                                                        • Strategy: Leveraging retention via new store credit card memberships
                                                                                                                                          • Macy’s entices new credit card holders with 15% off discounts
                                                                                                                                            • Figure 21: Macy’s Star Rewards online promotion, July 2013
                                                                                                                                          • Toys “R” Us promotes credit card memberships through prequalification
                                                                                                                                            • Figure 22: Toys “R” Us Credit Card acquisition mailing promotion, March 2013
                                                                                                                                          • Retention on retail credit card loyalty programs soliciting through direct mail
                                                                                                                                            • Figure 23: Retailer Loyalty retention mailing pieces sent, by month, January 2011-June 2013
                                                                                                                                          • Strategy: Engaging members in multichannel communications
                                                                                                                                            • Safeway’s customized approach to its mobile app provides digitized coupons and grocery list, as well as personalized deals
                                                                                                                                              • Macy’s appeals to young age in mobile engagement
                                                                                                                                                • Figure 24: Macy’s Star Rewards online ad, July 2013
                                                                                                                                              • Strategy: Bucking trends and abandoning the loyalty program
                                                                                                                                                • Figure 25: Jewel-Osco’s “Card Free Savings” mail promotion, June 2013
                                                                                                                                              • Strategy: Offering all-inclusive offers through strategic partnerships
                                                                                                                                                • Figure 26: A&P Rewards Online Mall, online ad, July 2013
                                                                                                                                            • Retailer Loyalty Program Participation

                                                                                                                                              • Key points
                                                                                                                                                • Supermarkets and drug stores most likely participated in loyalty programs
                                                                                                                                                  • Figure 27: Participation in and average number of memberships of retailer loyalty programs, June 2013
                                                                                                                                                • Women most likely to participate in retailer loyalty programs
                                                                                                                                                  • Figure 28: Participation in and average number of memberships of retailer loyalty programs, by gender, June 2013
                                                                                                                                                • Loyalty program enrollment tends to be inversely related to age
                                                                                                                                                  • Figure 29: Participation in and average number of memberships of retailer loyalty programs, by age, June 2013
                                                                                                                                                • Memberships increase with income
                                                                                                                                                  • Figure 30: Participation in and average number of memberships of retailer loyalty programs, by household income, June 2013
                                                                                                                                              • Preferred Ways of Engaging with Loyalty Programs

                                                                                                                                                • Key points
                                                                                                                                                  • Most members access via desktop/laptop, men favor smartphones
                                                                                                                                                    • Mobile apps and social media are on the rise
                                                                                                                                                      • Figure 31: Preferred ways of engaging with loyalty programs, by device and communication method, by gender, June 2013
                                                                                                                                                    • Younger groups prefer smartphone for text message and/or mobile app engagement
                                                                                                                                                      • Figure 32: Preferred ways of engaging with loyalty programs, by device and communication method, by age, June 2013
                                                                                                                                                    • Email preferred the most among affluent; lower income favor mail or phone calls
                                                                                                                                                      • Figure 33: Preferred ways of engaging with loyalty programs, by device and communication method, by household income, June 2013
                                                                                                                                                  • Attitudes to Shopping and Factors Driving Recommending a Retailer to Others

                                                                                                                                                    • Key points
                                                                                                                                                      • Americans shop at their “favorite” stores with value in mind
                                                                                                                                                        • Figure 34: Attitudes toward shopping, February 2007-March 2013
                                                                                                                                                      • Strong partiality toward low prices and deals, the major loyalty contenders
                                                                                                                                                        • Figure 35: Influential factors in recommending a particular retailer to others, June 2013
                                                                                                                                                      • Membership of loyalty programs a catalyst to advocacy for retail brand
                                                                                                                                                        • Figure 36: Influential factors in recommending a particular retailer to others, by retailer loyalty program participation, June 2013
                                                                                                                                                      • Women more likely to advocate than men
                                                                                                                                                        • Figure 37: Influential factors in recommending a particular retailer to others, by gender, June 2013
                                                                                                                                                      • Millennials willing advocates, yet selective program participants
                                                                                                                                                        • Figure 38: Influential factors in recommending a particular retailer to others, by age, June 2013
                                                                                                                                                    • Attitudes toward Retailer Loyalty Programs

                                                                                                                                                      • Key points
                                                                                                                                                        • Two-fifths of members have space for more loyalty program participation
                                                                                                                                                          • Figure 39: Attitudes toward retailer loyalty programs, June 2013
                                                                                                                                                        • Women eager retailer loyalty members; men lag slightly
                                                                                                                                                          • Figure 40: Attitudes toward retailer loyalty programs, gender, June 2013
                                                                                                                                                        • Younger loyalty members value personalized, targeted programs
                                                                                                                                                          • Figure 41: Attitudes toward retailer loyalty programs, by age, June 2013
                                                                                                                                                        • Loyalty program memberships for higher-income shoppers more likely found in frequently shopped stores
                                                                                                                                                          • Figure 42: Attitudes toward retailer loyalty programs, by household income, June 2013
                                                                                                                                                      • Important Attributes in Loyalty Programs

                                                                                                                                                        • Key points
                                                                                                                                                          • Factors that drive satisfaction in a loyalty program
                                                                                                                                                            • Effortless reward redemption and point accumulation key in engaging consumers
                                                                                                                                                              • Soft benefits as supplements to hard benefits
                                                                                                                                                                • Privacy and ease of enrollment are key strategic tools in a loyalty program
                                                                                                                                                                  • Figure 43: Important attributes in loyalty programs, by participants in retailer loyalty programs, June 2013
                                                                                                                                                                • Women show stronger aspiration toward loyalty program attributes
                                                                                                                                                                  • Figure 44: Important attributes in loyalty programs, by gender, June 2013
                                                                                                                                                                • Older shoppers seek savings from loyalty programs; younger shoppers want exclusivity
                                                                                                                                                                  • Figure 45: Important attributes in loyalty programs, by age, June 2013
                                                                                                                                                                • Perceived value in loyalty programs differ by communication methods used
                                                                                                                                                                  • Figure 46: Important attributes in loyalty programs, by preferred communication methods, June 2013
                                                                                                                                                              • Frustrations/Dissatisfaction with Loyalty Programs

                                                                                                                                                                • Key points
                                                                                                                                                                  • Loyalty members’ frustrations in retailer programs
                                                                                                                                                                    • Time required to yield valuable rewards and insignificant benefits creates barriers
                                                                                                                                                                      • Expired rewards likely lead to dissatisfaction in a loyalty program
                                                                                                                                                                        • Figure 47: Sports Authority, The League Rewards email loyalty statement, July 2013
                                                                                                                                                                      • Loyalty programs require giving back control to customers
                                                                                                                                                                        • Privacy, as a matter of trust, shapes brand engagement
                                                                                                                                                                          • Program engagement via phone calls welcomed
                                                                                                                                                                            • Figure 48: Frustrations or dissatisfaction with loyalty programs, June 2013
                                                                                                                                                                          • Both genders want faster, better rewards
                                                                                                                                                                            • Figure 49: Frustrations or dissatisfaction with loyalty programs, by gender, June 2013
                                                                                                                                                                          • Marketing to Millennials requires personalized, targeted engagement
                                                                                                                                                                            • Figure 50: Frustrations or dissatisfaction with loyalty programs, by age, June 2013
                                                                                                                                                                        • Impact of Race and Hispanic Origin

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Differing utilization of programs necessitates targeted, multicultural messaging
                                                                                                                                                                              • Figure 51: Participation in and average number of memberships of retailer loyalty programs, by race/Hispanic origin, June 2013
                                                                                                                                                                            • Blacks receptive to phone calls and mail engagement; Hispanics prefer contact via smartphone
                                                                                                                                                                              • Figure 52: Preferred ways of engaging with loyalty programs, by device and communication method, by race/Hispanic origin, June 2013
                                                                                                                                                                            • Hispanics likely to spend extra dollar in an exchange of rewards/points
                                                                                                                                                                              • Figure 53: Attitudes toward retailer loyalty programs, by race/Hispanic origin, June 2013
                                                                                                                                                                            • Hispanics “very likely” to advocate for a retailer with a “good” loyalty program
                                                                                                                                                                              • Figure 54: Influential factors in recommending a particular retailer to others (very likely), by age, June 2013
                                                                                                                                                                            • Blacks relatively unconcerned with monetary rewards; Asians and Hispanics look for exclusivity
                                                                                                                                                                              • Figure 55: Important attributes in loyalty programs, by race/Hispanic origin, June 2013
                                                                                                                                                                            • Longer time to build valuable rewards most cited dissatisfaction, regardless of race
                                                                                                                                                                              • Figure 56: Frustrations or dissatisfaction with loyalty programs, by race/Hispanic origin, June 2013
                                                                                                                                                                          • Appendix – Other Useful Consumer Tables

                                                                                                                                                                            • Market drivers
                                                                                                                                                                              • Figure 57: Share of average annual expenditures to average annual income (before taxes), by all consumer units and consumer unit age groups, 2006-11
                                                                                                                                                                            • Retailer loyalty program participation
                                                                                                                                                                              • Figure 58: Participation in retailer loyalty programs, by attitudes toward retailer loyalty programs, June 2013
                                                                                                                                                                              • Figure 59: Participation in retailer loyalty programs, by attitudes toward retailer loyalty programs, June 2013 (continued)
                                                                                                                                                                              • Figure 60: Participation in retailer loyalty programs, by repertoire of preferred communication devices, June 2013
                                                                                                                                                                              • Figure 61: Participation in retailer loyalty programs, by repertoire of preferred communication methods, June 2013
                                                                                                                                                                              • Figure 62: Participation in retailer loyalty programs, by number of types of loyalty programs enrolled in, June 2013
                                                                                                                                                                              • Figure 63: Average of total number of retailer loyalty programs participations, by attitudes toward retailer loyalty programs, June 2013
                                                                                                                                                                              • Figure 64: Average of total number of retailer loyalty programs participations, by attitudes toward retailer loyalty programs, June 2013 (continued)
                                                                                                                                                                            • Attitudes toward retailer loyalty programs
                                                                                                                                                                              • Figure 65: Attitudes toward retailer loyalty programs, by repertoire of preferred communication devices, June 2013
                                                                                                                                                                              • Figure 66: Attitudes toward retailer loyalty programs, by repertoire of preferred communication methods, June 2013
                                                                                                                                                                              • Figure 67: Attitudes toward retailer loyalty programs, by number of types of loyalty programs enrolled in, June 2013
                                                                                                                                                                            • Preferred ways of engaging with loyalty programs
                                                                                                                                                                              • Figure 68: Preferred ways of engaging with loyalty programs, by device and communication method, by parents with children and age, June 2013
                                                                                                                                                                              • Figure 69: Preferred ways of engaging with loyalty programs, by device, by attitudes toward retailer loyalty programs, June 2013
                                                                                                                                                                              • Figure 70: Preferred ways of engaging with loyalty programs, by device, by attitudes toward retailer loyalty programs, June 2013 (continued)
                                                                                                                                                                              • Figure 71: Preferred ways of engaging with loyalty programs, by device, by repertoire of preferred communication methods, June 2013
                                                                                                                                                                              • Figure 72: Preferred ways of engaging with loyalty programs, by device, by total loyalty program, June 2013
                                                                                                                                                                              • Figure 73: Preferred ways of engaging with loyalty programs, by communication method, by attitudes toward retailer loyalty programs, June 2013
                                                                                                                                                                              • Figure 74: Preferred ways of engaging with loyalty programs, by communication method, by attitudes toward retailer loyalty programs, June 2013 (continued)
                                                                                                                                                                              • Figure 75: Preferred ways of engaging with loyalty programs, by communication method, by repertoire of preferred communication devices, June 2013
                                                                                                                                                                              • Figure 76: Preferred ways of engaging with loyalty programs, by communication method, by repertoire of preferred communication methods, June 2013
                                                                                                                                                                              • Figure 77: Preferred ways of engaging with loyalty programs, by communication method, by number of types of loyalty program enrolled in, June 2013
                                                                                                                                                                            • Important attributes in loyalty programs
                                                                                                                                                                              • Figure 78: Important attributes in loyalty programs, by parents with children and age, June 2013
                                                                                                                                                                              • Figure 79: Important attributes in loyalty programs, by retailer loyalty programs participations, June 2013
                                                                                                                                                                              • Figure 80: Important attributes in loyalty programs, by retailer loyalty programs participations, June 2013 (continued)
                                                                                                                                                                              • Figure 81: Important attributes in loyalty programs, by attitudes toward retailer loyalty programs, June 2013
                                                                                                                                                                              • Figure 82: Important attributes in loyalty programs, by attitudes toward retailer loyalty programs, June 2013 (continued)
                                                                                                                                                                              • Figure 83: Important attributes in loyalty programs, by repertoire of preferred communication devices, June 2013
                                                                                                                                                                              • Figure 84: Important attributes in loyalty programs, by repertoire of preferred communication methods, June 2013
                                                                                                                                                                              • Figure 85: Important attributes in loyalty programs, by number of types of loyalty program enrolled in, June 2013
                                                                                                                                                                              • Figure 86: Important attributes in loyalty programs, by preferred devices for engaging with loyalty programs, June 2013
                                                                                                                                                                              • Figure 87: Important attributes in loyalty programs, by preferred communication for engaging with loyalty programs, June 2013
                                                                                                                                                                              • Figure 88: Important attributes in loyalty programs, by preferred communication for engaging with loyalty programs, June 2013 (continued)
                                                                                                                                                                            • Frustrations or dissatisfaction with loyalty programs
                                                                                                                                                                              • Figure 89: Frustrations or dissatisfaction with loyalty programs, by parents with children and age, June 2013
                                                                                                                                                                              • Figure 90: Frustrations or dissatisfaction with loyalty programs, by participation in retailer loyalty programs, June 2013
                                                                                                                                                                              • Figure 91: Frustrations or dissatisfaction with loyalty programs, by participation in retailer loyalty programs, June 2013 (continued)
                                                                                                                                                                              • Figure 92: Frustrations or dissatisfaction with loyalty programs, by attitudes toward retailer loyalty programs, June 2013
                                                                                                                                                                              • Figure 93: Frustrations or dissatisfaction with loyalty programs, by attitudes toward retailer loyalty programs, June 2013 (c
                                                                                                                                                                              • Figure 94: Frustrations or dissatisfaction with loyalty programs, by repertoire of preferred communication devices, June 2013
                                                                                                                                                                              • Figure 95: Frustrations or dissatisfaction with loyalty programs, by repertoire of preferred communication methods, June 2013
                                                                                                                                                                              • Figure 96: Frustrations or dissatisfaction with loyalty programs, by total loyalty program, June 2013
                                                                                                                                                                              • Figure 97: Frustrations or dissatisfaction with loyalty programs, by important attributes in loyalty programs, June 2013
                                                                                                                                                                              • Figure 98: Frustrations or dissatisfaction with loyalty programs, by important attributes in loyalty programs, June 2013 (continued)
                                                                                                                                                                              • Figure 99: Frustrations or dissatisfaction with loyalty programs, by preferred communication devices, June 2013
                                                                                                                                                                              • Figure 100: Frustrations or dissatisfaction with loyalty programs, by preferred communication methods, June 2013
                                                                                                                                                                              • Figure 101: Frustrations or dissatisfaction with loyalty programs, by Preferred communication methods, June 2013 (continued)
                                                                                                                                                                          • Appendix – Trade Associations

                                                                                                                                                                            Companies Covered

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

                                                                                                                                                                            Retailer Loyalty Programs - US - August 2013

                                                                                                                                                                            US $3,995.00 (Excl.Tax)