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US Retailer Loyalty Programs market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Retailer Loyalty Programs market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?


For the purposes of this Report, Mintel has used the following definitions:

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.

This Report builds on Mintel’s Retailer Loyalty Programs – US, July 2016, July 2015 and July 2014.

Expert analysis from a specialist in the field

Written by Alexis DeSalva, a leading analyst in the Retail & Apparel sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Participation in retailer loyalty programs is high, but inconsistent across channels, with consumers engaging the most at retailers where they can fulfill more shopping needs, such as drug stores and supermarkets. Conversely, specialty retailers’ programs have the lowest levels of engagement and, in some cases, awareness. As consumers’ shopping habits and expectations have changed, based on certain market factors and a larger shift towards online shopping, loyalty programs must also evolve, as some consumers find participating in programs and the rewards they offer irrelevant to them. If retailers can find new ways to reward, they stand to benefit from the positive impacts programs have on shopping, including an increase in spending and choosing retailers over their competition. Alexis DeSalva
Retail and Apparel Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Roadblocks to active participation
            • Figure 1: Frustrations with loyalty programs, February 2017
          • Drug stores, supermarkets garner the most participation
            • Figure 2: Loyalty participation, february 2017
          • The opportunities
            • Retailers can reap their own rewards
              • Figure 3: Impact on shopping, February 2017
            • Find new ways to reward
              • Figure 4: Desired loyalty program features, February 2017
            • Generate new product trial through loyalty programs
              • What it means
              • The Market – What You Need to Know

                • Consumers are still shopping, but in different ways
                  • Smaller households changes shopping habits
                    • Online shopping changes expectations
                    • Market Factors

                      • Lifestyle changes have an impact on shopping
                        • Households look different, continue to evolve
                          • Figure 5: Households, by type, 2016
                          • Figure 6: Households by number of members, 2016
                          • Figure 7: Median household income, by type of household, 2015
                        • The impact of online shopping
                        • Key Players – What You Need to Know

                          • Top channels serve many shopping needs
                            • Amazon peaks consumer interest
                              • Specialty retailers’ programs struggle
                                • Alternative ways to reward
                                • What’s Working?

                                  • Participation is high overall, Amazon and drug stores lead
                                    • Figure 8: Loyalty engagement, February 2017
                                  • Loyalty programs have positive impacts on shopping
                                    • Figure 9: Loyalty usage, February 2017
                                • What’s Struggling?

                                  • Participation is inconsistent across retail channels
                                    • Specialty retailers struggle with lack of consumer awareness
                                      • Figure 10: Sephora loyalty email message, march 2017
                                    • Time, money, and relevance are roadblocks
                                      • Figure 11: Loyalty program frustrations, February 2017
                                    • Account management is a problem
                                    • What’s Next?

                                      • Digital integration is next
                                        • Alternative ways to reward
                                        • The Consumer – What You Need to Know

                                          • Participation is high, but consumers play favorites
                                            • Specialized retailers loyalty programs lack awareness
                                              • Consumers want to use rewards, but time is working against them
                                                • Loyalty programs can actually deliver loyalty
                                                • Loyalty Program Participation

                                                  • Participation is high, but inconsistent
                                                    • Figure 12: Loyalty Program Participation. February 2017
                                                  • Drug stores and Amazon are winning in loyalty participation
                                                      • Figure 13: Loyalty program participation repertoire by select loyalty program participation, February 2017
                                                    • Retailers can look to increase participation
                                                      • Figure 14: Loyalty program participation repertoire by gender, by age, February 2017
                                                    • Other characteristics influence participation
                                                        • Figure 15: Loyalty program participation by age and household income, February 2017
                                                    • Loyalty Engagement

                                                      • Amazon is Prime
                                                        • Figure 16: Loyalty program engagement, by age, February 2017
                                                      • Best Buy and drug stores are among highest in participation
                                                        • Figure 17: Loyalty program engagement, February 2017
                                                      • Most specialized retailers have lowest levels of engagement
                                                        • Figure 18: Nordstrom email campaign, march 2017
                                                        • Figure 19: Loyalty engagement, February 2017
                                                      • Opportunities to engage with younger consumers
                                                        • Figure 20: Loyalty engagement, by age, February 2017
                                                    • Loyalty Program Usage

                                                      • Clear preferences of how to use rewards
                                                        • Figure 21: Loyalty program usage, part 1, February 2017
                                                        • Figure 22: Loyalty program usage, part 2, February 2017
                                                      • Hispanics seek value out of loyalty programs
                                                        • Figure 23: Loyalty program usage, by Hispanic origin, February 2017
                                                      • Most consumers use their rewards and do so quickly
                                                        • Figure 24: Loyalty program usage, by age, February 2017
                                                      • Customers like to treat themselves and receive discounts
                                                        • Figure 25: Loyalty program usage, by age, February 2017
                                                      • Missed opportunities
                                                        • Figure 26: Loyalty program participation repertoire by loyalty program usage, February 2017
                                                    • Desired Loyalty Program Features

                                                      • Consumers prefer simplicity over exclusivity
                                                        • Figure 27: Desired features that would encourage more participation in a loyalty program, February 2017
                                                      • Age influences top desired features
                                                        • Figure 28: Desired loyalty program features, by gender and age, February 2017
                                                      • Exclusivity has become less important, but some seek for personalization
                                                        • Digital features shouldn’t be ignored
                                                          • Figure 29: Desired loyalty program features, by millennials vs. non millennials, February 2017
                                                      • Frustrations with Loyalty Programs

                                                        • Membership fees biggest deterrent to participation
                                                          • Figure 30: Frustrations with loyalty programs, February 2017
                                                        • Time is an issue
                                                          • Figure 31: Frustrations of loyalty programs, by age and household income, February 2017
                                                        • Many consumers feel rewards aren’t relevant to them
                                                            • Figure 32: Frustrations with loyalty programs, by age and household income, February 2017
                                                          • In-store opportunities
                                                          • Impact on Shopping

                                                            • Successful programs deliver customer loyalty
                                                              • Figure 33: Impact on shopping, February 2017
                                                            • Consumers return the favor
                                                              • Figure 34: Impact on shopping, by Hispanic origin, February 2017
                                                            • Consumers take advantage of loyalty program deals
                                                              • Figure 35: Impact on shopping, by age and household income, February 2017
                                                            • More ways to manage
                                                              • Figure 36: Impact on shopping, gender and age, February 2017
                                                          • Appendix – Data Sources and Abbreviations

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

                                                                        • Figure 37: Households, by presence of own children, 2006-16
                                                                        • Figure 38: Number of households, by age of householder, 2006 and 2016
                                                                        • Figure 39: Median household income, by type of household, 2015