Retailer Loyalty Programs - US - July 2014

SCOPE AND THEMES
What you need to know
Definition
Data sources
Consumer survey data
Direct marketing creative
Abbreviations
Terms
EXECUTIVE SUMMARY
Overview
The market
Figure 1: Actions taken to earn loyalty rewards, May 2014
Key players
The consumer
Loyalty programs key factor in determining where consumers shop
Figure 2: Factors influencing where consumers shop, May 2014
Action taken correlates to household size
Figure 3: Action taken to earn loyalty rewards - any, by household size, May 2014
More than four in 10 report frustration with loyalty programs
Figure 4: Frustrations with loyalty programs, May 2014
What we think
ISSUES AND INSIGHTS
Does loyalty program participation translate to customer loyalty?
The issues
The implications
Central frustrations with loyalty programs
The issues
The implications
Should retailers emphasize personalization or privacy?
The issues
The implications
TREND APPLICATIONS
Trend: Many Mes
Trend: Return to the Experts
Trend: Why Buy
MARKET DRIVERS
Key points
Consumer spending trending upward since the recession
Figure 5: Consumer confidence and unemployment, 2000-14
Online shopping forecast to grow
Figure 6: US total online shopping sales, at current prices, 2009-19
Mobile apps improve the convenience of loyalty programs
Credit cards provide universal rewards to consumers
Figure 7: Rewards/affiliations with respondents' credit cards, by age, November 2012-December 2013
LEADING COMPANIES
Key points
Figure 8: Number of mentions of leading retailers May 2014
CVS
Walgreens
Kroger
Target
Amazon
Best Buy
Starbucks
Kohl’s
Walmart
Safeway
INNOVATIONS AND INNOVATORS
The North Face offers experiential awards
Figure 9: The North Face’s VIPeak rewards catalog, April 2014
Delicious Karma translates loyalty into charitable donations
Figure 10: Delicious Karma’s “Karma Challenge” page, April 2014
Birdback
Figure 11: Birdback homepage, April 2014
American Express lets loyalty members use points for Uber rides
MARKETING STRATEGIES
Loyalty programs that emphasize cost savings
Figure 12: Pier 1 Imports, fresh finds for your spring table, April 2014
Figure 13: Pier 1 Imports, make it an early spring with our candles, lanterns, and fragrances, February 2014
Figure 14: The Children’s place, loyalty member email campaign, April 2014
Loyalty programs that emphasize exclusivity
Figure 15: Banana Republic, cardmembers: add some color with exclusive savings!, January 2014
Figure 16: Sephora, VIB 15% off: early access event, April 2014
Loyalty programs with experiential rewards
SOCIAL MEDIA
Key points
Market overview
Key social media metrics
Figure 17: Key performance indicators, selected retailer loyalty programs, June 16, 2013-June 15, 2014
Brand usage and awareness
Figure 18: Brand usage and awareness of retailer loyalty programs, May 2014
Interaction with brands
Figure 19: Interaction with retailer loyalty programs, May 2014
Leading online campaigns
Rewarding healthy, active lifestyles
Exclusive partnerships for limited-edition offers
Loyalty programs that give to charity
Social media promotion rewarded with extra perks
What we think
Online conversations
Figure 20: Selected Starbucks’ My Starbucks Rewards Twitter mentions, November 2013
Figure 21: Online mentions, selected retailer loyalty programs, June 16, 2013-June 15, 2014
Where are people talking about retailer loyalty programs?
Figure 22: Selected Walgreens Balance Rewards Twitter mentions, June 2014
Figure 23: Mentions by page type, selected retailer loyalty programs, June 16, 2013-June 15, 2014
What are people talking about online?
Figure 24: Mentions by topic of conversation, selected retailer loyalty programs, June 16, 2013-June 15, 2014
RETAILER LOYALTY PROGRAM PARTICIPATION
Key points
Loyalty program participation is on the rise
Figure 25: Participation in retailer loyalty programs, June 2013 - May 2014
Young men and women participate in the largest number of programs
Figure 26: Participation in retailer loyalty programs (mean), by gender and age, May 2014
Parents more likely to participate in loyalty programs than those without children
Figure 27: Participation in retailer loyalty programs (mean), by gender and parents with children in household, May 2014
Participation across retail sectors trends upward with household income
Figure 28: Participation in retail loyalty programs, by household income, May 2014
SHOPPING MOTIVATIONS: WHERE LOYALTY PROGRAMS FIT
Key points
Top motivations for engaging with a business
Figure 29: Respondent opinions about shopping, by age, November 2012-December 2013
Nearly four in 10 consumers prefer stores with loyalty programs
Figure 30: Factors that influence where consumers shop, by gender and age, May 2014
THE IMPACT OF LOYALTY PROGRAMS ON SHOPPING BEHAVIOR
Key points
More than half of respondents took action to earn loyalty rewards
Figure 31: Impact of loyalty programs on shopping behavior, by demographics
Young men and women more likely to spend more to earn rewards
Figure 32: Impact of loyalty programs on shopping behavior, by gender and age, May 2014
Moms and dads show higher engagement with loyalty programs than nonparents
Figure 33: Impact of loyalty programs on shopping behavior, by gender and parents with children in household, May 2014
Engagement with loyalty programs trends upward with household size
Figure 34: Impact of loyalty programs on shopping behavior, by household size, May 2014
More than four in 10 consumers from lower-income households alter shopping behavior to earn rewards
Figure 35: Impact of loyalty programs on shopping behavior, by household income, May 2014
PERCEPTIONS REGARDING CUSTOMER LOYALTY PROGRAMS AND SOURCES OF FRUSTRATION
Key points
Most common loyalty frustrations
Figure 36: Preferences and frustrations regarding loyalty programs, May 2014
Types of loyalty programs consumers prefer
Figure 37: Preferences and frustrations regarding loyalty programs, by gender and age, May 2014
Dads express frustration with redeeming rewards
Figure 38: Preferences and frustrations regarding loyalty programs, by gender and parents with children in household, May 2014
LOYALTY INCENTIVES: IMPORTANCE OF REWARD TYPES
Key points
Free products, storewide discounts, and store credit with purchases top loyalty program incentives
Figure 39: Importance of retailer loyalty program features, by gender and age, May 2014
High-priority incentives for subscription-based programs
Figure 40: Importance of features for subscription-based loyalty programs, May 2014
Younger consumers more receptive to subscription-based loyalty programs
Figure 41: Importance of incentives in subscription-based loyalty programs, by gender and age, May 2014
CONSUMERS’ PREFERRED MEDIUMS AND FREQUENCY OF PROMOTIONAL COMMUNICATION
Key points
How much do consumers want to interact with businesses?
Figure 42: Preferred frequency and medium of promotional communication, May 2014
Young consumers open to frequent promotional communication
Figure 43: Preferences regarding promotional communication – any high frequency, by gender and age, May 2014
More than one third of larger households are receptive to frequent promotions on social media
Figure 44: Preferences regarding promotional communication – any high frequency, by household size, May 2014
RACE AND HISPANIC ORIGIN
Key points
Asians participate in the largest variety of loyalty programs
Figure 45: Participation in retailer loyalty programs, by race/Hispanic origin, May 2014
Half of Asians ask others for advice before making a purchase
Figure 46: Respondent shopping behaviors, by race/Hispanic origin, November 2012-December 2013
Hispanics and Asians are the most likely to prefer frequent communication
Figure 47: Preferences regarding promotional communication – any high frequency, by race/Hispanic origin, May 2014
Blacks show receptiveness to advertising
Figure 48: Respondent general attitudes about the media, by race/Hispanic origin, November 2012-December 2013
CONSUMER SEGMENTATION
Key points
Consumer segmentation by promotional communication frequency
Figure 49: Loyalty program groups, by gender and age, May 2014
Influence of communication preferences on loyalty participation
Figure 50: Impact of loyalty programs on shopping behavior, by loyalty programs groups, May 2014
Consumers who prefer frequent brand communication show greater interest in diverse loyalty programs
Figure 51: Importance of loyalty rewards, by loyalty programs groups
Consumers who prefer limited promotional communication are the most price sensitive
Figure 52: Factors that influence where consumers shop, by loyalty programs groups, May 2014
Communication preferences and loyalty program frustrations
Figure 53: Preferences and frustrations regarding loyalty programs by loyalty programs groups, May 2014
APPENDIX – LOYALTY PROGRAM MEMBERS
Overview
Figure 54: Total US loyalty program memberships and active memberships, 2006-12
APPENDIX – OTHER USEFUL CONSUMER TABLES
Participation in retailer loyalty programs
Figure 55: Participation in retailer loyalty programs, by gender and age, May 2014
Figure 56: Participation in retailer loyalty programs, by gender and parents with children in household, May 2014
Figure 57: Participation in retailer loyalty programs, by loyalty programs groups, May 2014
Figure 58: Participation in retailer loyalty programs (mean), by household income, May 2014
Figure 59: Participation in retailer loyalty programs (mean), by household size, May 2014
Figure 60: Repertoire of participation in retailer loyalty programs, by gender and age, May 2014
Figure 61: Repertoire of participation in retailer loyalty programs, by gender and parents with children in household, May 2014
Figure 62: Participation in retailer loyalty programs (mean), by race/Hispanic origin, May 2014
Importance of loyalty rewards by type
Figure 63: Importance of loyalty rewards, by race and Hispanic origin, May 2014
Consumer shopping motivations and behaviors
Figure 64: Respondent opinions about shopping, by gender and age, November 2012-December 2013
Figure 65: Respondent opinions about shopping, by household income, November 2012-December 2013
Figure 66: Respondent shopping behaviors, by age, November 2012-December 2013
Figure 67: Factors that influence where consumers shop, by household income, May 2014
Figure 68: Factors that influence where consumers shop, by household size, May 2014
Figure 69: Factors that influence where consumers shop, by gender and parents with children in household, May 2014
Figure 70: Respondent opinions about shopping, by race/Hispanic origin, November 2012-December 2013
Sources of product information
Figure 71: Sources of product information during shopping, by age, November 2012-December 2013
Figure 72: Sources of product information during shopping, by race/Hispanic origin, November 2012-December 2013
Participation in credit/debit card rewards programs
Figure 73: Respondent credit card ownership, by age, November 2012-December 2013
Figure 74: Rewards/affiliations with respondents' credit cards, by household income, November 2012-December 2013
Figure 75: Perceptions regarding retail loyalty programs by actions taken to earn rewards
Figure 76: Rewards/affiliations with respondents' credit cards, by gender and age, November 2012-December 2013
Preferences regarding promotional communication
Figure 77: Preferences regarding promotional communication – any high frequency, by gender and parents with children in household, May 2014
Figure 78: Preferences regarding promotional communication – any usage, by gender and age, May 2014
Figure 79: Preferences regarding promotional communication – any usage, by loyalty programs groups, May 2014
Figure 80: Loyalty program groups, by household income, May 2014
Figure 81: Loyalty program groups, by race/Hispanic origin, May 2014
Figure 82: Loyalty program groups, by household size, May 2014
Figure 83: Loyalty program groups, by gender and parents with children in household, May 2014
Perceptions regarding advertising
Figure 84: general attitudes about the media, by gender and age, November 2012-December 2013
APPENDIX – SOCIAL MEDIA
Online conversations
Figure 85: Online mentions, selected retailer loyalty programs, June 16, 2013-June 15, 2014
Brand analysis
Figure 86: Starbucks’ My Starbucks Rewards key social media indicators, June 2014
Figure 87: Best Buy’s My Best Buy key social media indicators, June 2014
Figure 88: CVS ExtraCare Rewards Program key social media indicators, June 2014
Figure 89: Walgreens Balance Rewards key social media indicators, June 2014
Figure 90: Kroger Rewards key social media indicators, June 2014
Figure 91: Safeway Rewards Points key social media indicators, June 2014
Brand usage or awareness
Figure 92: Brand usage or awareness, May 2014
Figure 93: Walgreens Balance Rewards usage or awareness, by demographics, May 2014
Figure 94: CVS ExtraCare Rewards Program usage or awareness, by demographics, May 2014
Figure 95: Kroger Rewards usage or awareness, by demographics, May 2014
Figure 96: Safeway Reward Points usage or awareness, by demographics, May 2014
Figure 97: Best Buy’s My Best Buy usage or awareness, by demographics, May 2014
Figure 98: Starbucks’ My Starbucks Rewards usage or awareness, by demographics, May 2014
Activities done
Figure 99: Activities done, May 2014
Figure 100: Walgreens Balance Rewards – activities done – I have looked up/talked about this brand online on social media, by demographics, May 2014
Figure 101: Walgreens Balance Rewards – activities done – I have contacted/interacted with the brand online on social media to, by demographics, May 2014
Figure 102: Walgreens Balance Rewards – activities done – I follow/like the brand on social media because, by demographics, May 2014
Figure 103: Walgreens Balance Rewards – activities done – I have researched the brand on social media to, by demographics, May 2014
Figure 104: CVS ExtraCare Rewards Program – activities done – I have looked up/talked about this brand online on social media, by demographics, May 2014
Figure 105: CVS ExtraCare Rewards Program – activities done – I have contacted/interacted with the brand online on social media to, by demographics, May 2014
Figure 106: CVS ExtraCare Rewards Program – activities done – I follow/like the brand on social media because, by demographics, May 2014
Figure 107: CVS ExtraCare Rewards Program – activities done – I have researched the brand on social media to, by demographics, May 2014
Figure 108: Kroger Rewards – activities done – I have looked up/talked about this brand online on social media, by demographics, May 2014
Figure 109: Kroger Rewards – activities done – I have contacted/interacted with the brand online on social media to, by demographics, May 2014
Figure 110: Kroger Rewards – activities done – I have researched the brand on social media to, by demographics, May 2014
Figure 111: Safeway Reward Points – activities done – I have looked up/talked about this brand online on social media, by demographics, May 2014
Figure 112: Safeway Reward Points – activities done – I have contacted/interacted with the brand online on social media to, by demographics, May 2014
Figure 113: Safeway Reward Points – activities done – I have researched the brand on social media to, by demographics, May 2014
Figure 114: Best Buy’s My Best Buy – activities done – I have looked up/talked about this brand online on social media, by demographics, May 2014
Figure 115: Best Buy’s My Best Buy – activities done – I have contacted/interacted with the brand online on social media to, by demographics, May 2014
Figure 116: Best Buy’s My Best Buy – activities done – I follow/like the brand on social media because, by demographics, May 2014
Figure 117: Best Buy’s My Best Buy – activities done – I have researched the brand on social media to, by demographics, May 2014
Figure 118: Starbucks’ My Starbucks Rewards – activities done – I have looked up/talked about this brand online on social media, by demographics, May 2014
Figure 119: Starbucks’ My Starbucks Rewards – activities done – I have contacted/interacted with the brand online on social media to, by demographics, May 2014
Figure 120: Starbucks’ My Starbucks Rewards – activities done – I follow/like the brand on social media because, by demographics, May 2014
Figure 121: Starbucks’ My Starbucks Rewards – activities done – I have researched the brand on social media to, by demographics, May 2014
APPENDIX – TRADE ASSOCIATIONS