“Canadians are very familiar with loyalty programs; perhaps too familiar. The wide availability of programs and the ubiquity of basic models – points for purchases that eventually lead to a reward – has made them an expected tool for consumers, but not one that actually elicits loyalty.
The opportunity is for companies to differentiate within a crowded market. Frequent engagement, ongoing benefits and minimizing focus on the transactional nature of these programs are ways for companies to standout and use these programs to build stronger relationships with their customers.”

– Scott Stewart, Associate Director, Lifestyles & Retail

Key issues covered in this Report

  • Who uses loyalty programs and where they rank as a decision factor.
  • How loyalty programs can impact consumers’ feelings towards a business.
  • The leading loyalty programs in Canada today.
  • The program features that consumers believe are most important.
  • The aspects of loyalty programs that consumers do not like.

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
        • Executive Summary

            • Top takeaways
              • Market overview
                • Impact of COVID-19 on loyalty programs
                  • Figure 1: Immediate, short- and longer-term impact of COVID-19 on loyalty programs, 2021
                • Opportunities
                  • Most consumers use loyalty programs and the market is top-heavy
                    • There is potential for more paid membership programs
                      • Challenges
                        • Young Canadians’ usage rates raise concerns for the future
                          • There is a need to evolve
                          • The Market – Key Takeaways

                            • Loyalty programs are highly dependent on external factors
                            • Market Factors

                              • Inflation makes loyalty programs more attractive
                                • Figure 2: Consumer price index 12-month % change by category, 2020-2021
                              • High smartphone ownership makes mobile apps a relevant loyalty tool
                                • Figure 3: Smartphone ownership, by age, 2021
                              • Cashback and discount services are crowding the purchase-benefit market
                                • Loyalty programs can be a corporate social responsibility tool
                                  • Impact of COVID-19 on loyalty programs
                                    • Immediate impacts (2020)
                                      • Short term (2021)
                                        • Recovery (2022-25)
                                        • Companies and Brands – Key Takeaways

                                          • Loyalty programs are evolving to become more complex
                                          • Competitive Strategies

                                            • Businesses are moving away from third-party loyalty programs
                                              • Rexall leaves Air Miles and launches Be Well
                                                • Figure 4: Rexall Instagram post, May 2020
                                              • LCBO ends its 24-year relationship with Air Miles
                                                • Air Canada takes back control of Aeroplan
                                                  • Figure 5: Aeroplan Instagram post, October 2020
                                                • Foodservice companies are evolving their loyalty programs
                                                  • Tim Hortons switches to a points-based system
                                                    • McDonald’s loyalty program goes digital and introduces spend-based points
                                                      • Figure 6: McDonald’s Twitter post, November 2021
                                                    • Paid programs are asking for significant investments from members
                                                      • Programs are using gamification to keep members engaged
                                                        • Figure 7: Tim Hortons Twitter post, October 2021
                                                      • Birthday perks highlight a need to differentiate
                                                      • The Consumer – Key Takeaways

                                                        • Loyalty program usage and importance
                                                          • Impact of loyalty programs
                                                            • Program membership
                                                              • Features wanted in a loyalty program
                                                                • Dissatisfaction with loyalty programs
                                                                • Loyalty Program Usage and Importance

                                                                  • Most Canadians use loyalty programs
                                                                    • Figure 8: Past six months purchase behaviours, 2021
                                                                  • Half of young people are not using loyalty programs
                                                                    • Figure 9: Past six months purchase behaviours, by age, 2021
                                                                  • Lower income consumers are less likely to use loyalty programs
                                                                    • Figure 10: Past six months purchase behaviours, by age and household income, 2021
                                                                  • Loyalty program importance trails other shopping decision factors
                                                                    • Figure 11: Retailer decision factors, 2021
                                                                    • Figure 12: Retailer decision factors, among consumers who have used a loyalty program in the past six months, 2021
                                                                  • Paid loyalty memberships have limited impact on members
                                                                    • Figure 13: Retailer decision factors, Amazon Prime and Costco members vs overall, 2021
                                                                • Impact of Loyalty Programs

                                                                  • Loyalty programs do not make consumers feel loyal
                                                                    • Loyalty programs are ‘table stakes’ more than they are differentiators
                                                                      • Half of consumers would stop shopping at certain retailers if loyalty programs were discontinued
                                                                        • Figure 14: Attitudes towards loyalty programs (% agree), 2021
                                                                      • Younger paid members feel more inclined to utilize their memberships
                                                                        • Figure 15: ‘Wasting money if I don’t shop enough at retailers I have paid membership with’ (% agree), by age and program membership, 2021
                                                                      • Canadians struggling with their finances do not want to waste money on unused memberships
                                                                        • Figure 16: ‘Wasting money if I don’t shop enough at retailers I have paid membership with’ (% agree), by current financial situation, 2021
                                                                    • Program Membership

                                                                        • Figure 17: Current program membership, 2021
                                                                      • Third-party multi-retailer loyalty programs: Air Miles vs SCENE
                                                                        • Air Miles struggles with younger consumers
                                                                          • Figure 18: Current program membership: Air Miles vs SCENE, by age, 2021
                                                                          • Figure 19: Air Miles program membership, by race, living location and current employment/student status, 2021
                                                                          • Figure 20: SCENE program membership, by race, living location and current employment/student status, 2021
                                                                        • Corporate multi-retailer loyalty programs: PC Optimum vs Triangle
                                                                          • Figure 21: Current program membership: PC Optimum vs Triangle Rewards, by age, 2021
                                                                          • Figure 22: Triangle Rewards program membership, by race, living location and living situation, 2021
                                                                        • PC Optimum skews to women, while Triangle Rewards has no gender differences
                                                                          • Figure 23: Current program membership: PC Optimum vs Triangle Rewards, men vs women, 2021
                                                                        • Young Canadians use paid membership programs
                                                                          • Figure 24: Current program membership: Costco vs Amazon Prime, by age, 2021
                                                                          • Figure 25: Amazon Prime membership, by age and household income, 2021
                                                                        • Quebec trails the national average on most loyalty programs
                                                                          • Figure 26: Current program membership, Quebec vs overall, 2021
                                                                      • Features Wanted in a Loyalty Program

                                                                          • Figure 27: Most important features offered by loyalty programs, 2021
                                                                        • Consumers want control of their rewards
                                                                          • Figure 28: Most important features offered by loyalty programs: rewards, by age, 2021
                                                                        • Consumers have become savvy points earners
                                                                            • Figure 29: Most important features offered by loyalty programs: points, by age, 2021
                                                                          • Using other features to attract more young consumers
                                                                            • Figure 30: Most important features offered by loyalty programs, by age, 2021
                                                                        • Dissatisfaction with Loyalty Programs

                                                                          • Consumers want loyalty program benefits as soon as possible
                                                                            • Figure 31: Aspects of loyalty programs that consumers do not like, 2021
                                                                          • Using perks to give value to members between rewards
                                                                            • Figure 32: More Rewards Instagram post, 2020
                                                                          • Simplifying processes so loyalty programs require less effort
                                                                            • Figure 33: RBC & Petro-Canada | With you on every journey, near or far, September 2020
                                                                          • There is minimal concern about purchase tracking
                                                                            • Older consumers do not want to download an app
                                                                              • Figure 34: Aspects of loyalty programs that consumers do not like: don’t want to download an app, by age, 2021
                                                                          • Appendix – Data Sources and Abbreviations

                                                                            • Data sources
                                                                              • Consumer survey data
                                                                                • Consumer qualitative research
                                                                                  • Mintel Trend Drivers
                                                                                    • Abbreviations and terms
                                                                                      • Abbreviations
                                                                                        • Terms

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