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Retailer Loyalty Programs - US - July 2016

"Consumers have more loyalty accounts than ever before, which means they’re also starting to feel pressure from an overabundance of choice. Retailers are therefore challenged to streamline the shopping and loyalty experience without completely disrupting the core experiences that they’ve built their brands on."

- Bryant Harland, Senior Technology Analyst

This report looks at the following areas:

  • Average number of loyalty accounts tops 10 memberships per consumer
  • Loyalty programs still offering irrelevant rewards
  • The relationship between the loyalty program and the brand

This report examines consumers’ usage and attitudes regarding retailer loyalty programs. Loyalty programs in other sectors (eg, finance) are mentioned for context and examples of innovation, but are not the main focus of this Report.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Average number of loyalty accounts tops 10 memberships per consumer
            • Figure 1: Loyalty program participation (mean), by age, March 2016
          • Loyalty programs still offering irrelevant rewards
            • Figure 2: Loyalty program frustrations, March 2016
          • The relationship between the loyalty program and the brand
            • Figure 3: Attitudes toward retailer loyalty programs, by age, March 2016
          • The opportunities
            • Leverage the connection between loyalty program and brand
              • Figure 4: Attitudes toward retailer loyalty programs, March 2016
            • Personalization in high demand
              • Figure 5: Top five desired loyalty program features, March 2016
            • Increase the sophistication of targeted offers
              • Figure 6: Desired loyalty program features, by type of living area, March 2016
            • What it means
            • The Market – What you need to know

              • Mobile payment will drive branded apps
                • Average number of children in family households declining
                • Market Factors

                  • Mobile payment will help to drive seamless loyalty interactions
                    • Fewer multi-child households could dampen loyalty revenue
                      • Figure 7: Number of children per family household (mean), 2000-15
                  • Key Players – What You Need to Know

                    • Analytics increasingly drive loyalty
                      • Retailers redesigning for Plenti
                        • Opportunity to engage Baby Boomers in loyalty programs
                          • Loyalty programs shift to become digital services
                          • What’s Working?

                            • Brands integrate analytics into workplace culture
                              • Plenti drives value for consumers, retailers
                                • Figure 8: Wellness+ with Plenti loyalty email marketing example, June 2016
                            • What’s Struggling?

                              • Baby Boomers: Underserved in loyalty marketing
                                • Figure 9: Retail loyalty programs' impact, by generation, March 2016
                                • Figure 10: Sears loyalty direct mail marketing example, May 2016
                                • Figure 11: GNC Loyalty direct mail marketing example, April 2016
                                • Figure 12: Words Baby boomers associate with product quality, February 2016
                              • Lack of brand integration causes sales to falter
                              • What’s Next?

                                • The line between loyalty program and digital services continues to blur
                                  • Greater focus on analytics to lead to more sophisticated personalization
                                    • Synchrony Financial boosts user control and experience for loyalty interactions
                                        • Figure 13: How the next best offer app enables data-driven promotions, July 2016
                                    • The Consumer – What You Need to Know

                                      • Consumers hold more than 10 loyalty memberships
                                        • Loyalty programs continue to impact shopping
                                          • Loyalty programs are tied to brands
                                            • Loyalty still challenged by irrelevant rewards
                                            • Retailer Loyalty Program Participation

                                              • Consumers now participate in more than 10 loyalty programs on average
                                                • Figure 14: Loyalty program participation (mean), March 2016
                                              • Differentiation a greater challenge in targeting younger consumers
                                                • Figure 15: Loyalty program participation (mean), by age, March 2016
                                              • Demographics with lower overall loyalty participation present opportunities for individual sectors
                                                • Figure 16: Loyalty program participation (mean), by age and household income, March 2016
                                              • Consumers discuss how they use loyalty programs
                                              • Loyalty Programs’ Impact on Shopping Behavior

                                                • How loyalty programs influence shopping behavior
                                                  • Figure 17: Retail loyalty programs’ impact (summary), March 2016
                                                  • Figure 18: Retail loyalty programs’ impact on shopping, March 2016
                                                • Loyalty fatigue increasing among 25-34s
                                                  • Figure 19: Consumers’ desire for loyalty account management, April 2015-March 2016
                                                • Heightened engagement among multi-child households
                                                  • Figure 20: Loyalty programs’ impact on shopping, March 2016
                                                • Brand loyalty impacts engagement among Blacks
                                                  • Figure 21: Loyalty programs’ impact, by race, March 2016
                                              • Relationship Between Loyalty Programs and Retail Brands

                                                • Consumers expect loyalty programs from retailers
                                                  • Figure 22: Attitudes toward retailer loyalty programs, March 2016
                                                • Majority of young consumers relate loyalty program quality to retailers
                                                  • Figure 23: Attitudes toward retailer loyalty programs, by age, March 2016
                                                • Moms and dads more likely to connect loyalty program and brand
                                                  • Figure 24: Attitudes toward retailer loyalty programs, parental status and gender, March 2016
                                                  • Figure 25: Wells Fargo Loyalty direct mail marketing example
                                                • Product-specific promotions resonate with Asians and Hispanics
                                                  • Figure 26: Attitudes toward retailer loyalty programs, by race and Hispanic origin, March 2016
                                              • Attitudes toward Loyalty Programs

                                                • Irrelevant rewards remain a top consumer frustration
                                                  • Figure 27: Loyalty program frustrations, March 2016
                                                • Older consumers underserved by loyalty programs
                                                  • Figure 28: Loyalty program frustrations, by age, March 2016
                                                • Asian consumers feel it takes too long to earn rewards
                                                  • Figure 29: Loyalty program frustrations, by race, March 2016
                                              • Participation in Select Retail Loyalty Programs

                                                • More than 40% of loyalty program participants engaged with Amazon Prime
                                                  • Figure 30: Participation in specific loyalty programs, March 2016
                                                • Lack of familiarity presents the biggest barrier for participation
                                                  • Figure 31: Participation in specific loyalty programs, March 2016
                                                • Plenti: Strong traction among women 35-54
                                                  • Figure 32: Participation in specific loyalty programs, by gender and age, March 2016
                                              • Features that would Encourage Loyalty Program Participation

                                                • Personalization: The leading driver of loyalty program engagement
                                                  • Figure 33: Top five desired loyalty program features, March 2016
                                                • Social good and social media top of mind for urban loyalty consumers
                                                  • Figure 34: Desired loyalty program features, by type of living area, March 2016
                                                • Younger consumers opt for mobile interaction
                                                  • Figure 35: Desired loyalty program features, by age, March 2016
                                                • Consumers talk about their ideal loyalty programs
                                                • Appendix – Data Sources and Abbreviations

                                                  • Data sources
                                                    • Sales data
                                                      • Consumer survey data
                                                        • Consumer qualitative research
                                                          • Direct marketing creative
                                                            • Abbreviations and terms
                                                              • Abbreviations
                                                              • Appendix – Market

                                                                  • Figure 36: Number of children per family household (mean), by family type, 2000-15

                                                              Companies Covered

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

                                                              Retailer Loyalty Programs - US - July 2016

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