Table of Contents
Executive Summary
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- The issues
- Total loyalty memberships are set to grow
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- Figure 1: Total retail loyalty memberships and fan chart forecast of market, 2010-20
- Average number of loyalty memberships increasing
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- Figure 2: Loyalty program participation (mean), by age, April 2015
- Loyalty programs dramatically impact shopping behavior
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- Figure 3: Loyalty programs’ impact on shopping, by household size, April 2015
- The opportunities
- Increasing customer value key for struggling segments
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- Figure 4: Loyalty programs’ impact on shopping, April 2015
- Consumer demand for multichannel engagement
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- Figure 5: Preferred communication devices, 2013-15
- Personalization is important for overcoming irrelevance
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- Figure 6: Loyalty program attitudes, by repertoire of types of loyalty programs, April 2015
- What it means
The Market – What You Need to Know
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- 2018: The peak of retail loyalty memberships
- Most market segments slated for growth
- Grocery, fuel loyalty programs struggle to maintain traction
Market Size and Forecast
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- Total retail loyalty memberships to peak in 2018
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- Figure 7: Total retail loyalty memberships and fan chart forecast of market, 2010-20
- Figure 8: Total retail loyalty memberships forecast of market, 2008-20
Market Breakdown
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- Specialty retail loyalty memberships to increase to 564 million in 2020
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- Figure 9: Total specialty retail loyalty memberships and fan chart forecast of market, 2010-20
- Department store loyalty memberships to increase to 419 million in 2020
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- Figure 10: Total department store loyalty memberships and fan chart forecast of market, 2010-20
- Drug store loyalty memberships to grow to 504 million in 2020
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- Figure 11: Total drug store loyalty memberships and fan chart forecast of market, 2010-20
- Grocery store loyalty memberships to decline to 158 million in 2020
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- Figure 12: Total grocery store loyalty memberships and fan chart forecast of market, 2010-20
- Mass merchandiser loyalty memberships to reach 241 million in 2020
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- Figure 13: Total mass merchandiser loyalty memberships and fan chart forecast of market, 2010-20
- Fuel loyalty memberships to decline to 22 million by 2020
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- Figure 14: Total fuel loyalty memberships and fan chart forecast of market, 2010-20
Market Factors
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- Mobile devices to raise engagement and relevance in the market
Key Players – What You Need to Know
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- How multichannel engagement drives success
- Loyalty analytics: Addressing the omnichannel tracking challenge
- The future of loyalty means emphasis on digital
What’s Working?
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- Multichannel engagement drives successful loyalty initiatives
- Loyalty analytics: How brands are addressing omnichannel retail
What’s Struggling?
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- Grocery and fuel/convenience loyalty programs struggle to maintain engagement
What’s Next?
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- Retail loyalty coalitions to become more popular
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- Figure 15: American Express email ad, May 2015
- Loyalty programs to place heavier emphasis on digital
The Consumer – What You Need to Know
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- Little change in overall participation for many categories
- Mobile’s influence on loyalty is growing
- Irrelevant loyalty promotions top consumers’ frustrations
Retailer Loyalty Program Participation
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- Little change in overall participation since 2014
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- Figure 16: Loyalty program participation, 2013-15
- 25-34s average 14 loyalty memberships
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- Figure 17: Loyalty program participation (mean), by age, April 2015
Number of Types of Loyalty Programs
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- Many active loyalty customers have trouble seeing the difference between loyalty programs
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- Figure 18: Number of types of loyalty programs, April 2015
- Consumers with many loyalty memberships feeling loyalty fatigue
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- Figure 19: Loyalty program frustrations, by number of types of loyalty programs, April 2015
Type of Loyalty Program Participants
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- Figure 20: Types of loyalty program participants, January 2015
- Highly Active Participants
- Moderately Interested
- Convenience-oriented Participants
- Discount and Deal Hunters
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Preferred Methods of Loyalty Account Access
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- Mobile devices become more important for loyalty
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- Figure 21: Preferred communication devices, 2013-15
- Preferred channels for access and management of loyalty programs
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- Figure 22: Preferred communication methods, 2013-15
- Traditional engagement channels important for Black consumers
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- Figure 23: Preferred communication methods, by race, April 2015
Impact on Consumers’ Shopping Habits and Behavior
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- Loyalty programs influence shopping behavior for 60% of participants
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- Figure 24: Loyalty programs’ impact on shopping, by age, April 2015
- Drug store, supermarket loyalty programs back-of-mind during shopping
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- Figure 25: Loyalty programs’ impact on shopping, by loyalty program participation, April 2015
- Opportunity: Improve the in-store loyalty experience to engage 18-34s
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- Figure 26: Loyalty programs’ impact on shopping, by gender and age, April 2015
Attitudes Regarding Retailer Loyalty Programs
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- Higher income households see loyalty programs as a reflection of the retailer
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- Figure 27: Loyalty program attitudes, by household income, April 2015
- Personalization important for highly active loyalty participants
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- Figure 28: Loyalty program attitudes, by participation in loyalty programs, April 2015
Desired Loyalty Program Improvements
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- Large reward selections and sign-up bonuses top desired improvements
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- Figure 29: Desired loyalty program improvements, April 2015
- Engagement higher among those who express interest in loyalty improvements
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- Figure 30: Loyalty programs’ impact on shopping, by desired loyalty program improvements, April 2015
- Young men interested in spending reward points on charity
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- Figure 31: Desired loyalty program improvements, by gender and age, April 2015
Consumers’ Frustrations with Loyalty Programs
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- Consumers frustrated by a lack of relevance
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- Figure 32: Loyalty program frustrations, by age, April 2015
- Many young men don’t see differentiation in loyalty programs
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- Figure 33: Loyalty program frustrations, by gender and age, April 2015
Appendix – Data Sources and Abbreviations
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- Data sources
- The market
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Cluster methodology
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – Market
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- Figure 34: Total US specialty retail loyalty program memberships, 2006-20
- Figure 35: Total US department store loyalty program memberships, 2006-20
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- Figure 36: Total US drugstore loyalty program memberships, 2006-20
- Figure 37: Total US grocery store loyalty program memberships, 2006-20
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- Figure 38: Total US mass merchant loyalty program memberships, 2008-20
- Figure 39: Total US fuel/convenience loyalty program memberships, 2006-20
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