Loyalty programs are becoming more important to shoppers, according to the 2019 Global Shopper Trends Report by iVend, which found a 12% increase in customer loyalty card usage over last year. In 2018, 83% of shoppers reported it was a deciding factor on where to shop and this year, it rose to 93%.

Customer loyalty cards have made a surge in popularity thanks to digital wallets and retailer apps that make it easier for consumers to earn, redeem and manage rewards online. Another major contributor is Gen X and Millennial shoppers who are the most frequent users of loyalty cards. The two age groups are fuelling the boom right now – 95% report participating in loyalty schemes – but Gen Z, the generation with increasing buying power and the up and coming retail trendsetters, is not far behind with 93% participation.

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Implementing a loyalty scheme translates into more sales.

Customer Loyalty Card Usage

iVend’s Shopper Trends Report found that nearly 92% of patrons reported that they made purchases to earn loyalty rewards. These repeat customers are the key to retail viability, as most agree with the Pareto Principle — that 20% of shoppers are responsible for 80% of revenues.

When given a choice between stores, 35.3% of shoppers base purchase decisions on loyalty rewards at least half the time. If a customer needs to buy groceries, this means 50% of the time they are going to choose the grocer where they’ll earn rewards for their purchases.

How Often Consumers Shop with a Retailer Because They Earn Loyalty Rewards or Points

Customer Loyalty Card Motivators

According to 83.3% of global consumers, the most common motivation for shopping with retailers that have customer loyalty cards is to earn discounts and free items, but that’s not enough to entice everyone. Almost 38% of survey respondents join these programs for members-only product updates, while 26.7% want access to VIP events, benefits and experiences. Customer loyalty cards can also make shopping experiences more enjoyable, which is the draw for 21.3% of shoppers.

Customer Loyalty Card Account Management

iVend’s survey also found that most global consumers prefer to manage their customer loyalty cards themselves. Only 3.3% of consumers prefer a store associate manage their loyalty program accounts for them, while the sheer majority of shoppers like to maintain control over the programs they participate in.

How do people access their loyalty program or information?

  • 33.3% in person with a card

  • 32.9% through a smartphone app

  • 24.5% through an online portal

Loyalty Card Management by Age

As mentioned, Gen X, Millennials and Gen Z like to manage their cards digitally, but customers ages 55 and older are less likely to use digital methods to manage their customer loyalty cards. Only 12.7% of customers ages 55-64 manage theirs through a smartphone app, and that number goes down to 5.2% for people 65 and older. The large majority –nearly 60%–of senior shoppers 65 and older like to manage loyalty transactions in person, with a physical card, making in-store customer service very important to senior shoppers.

Implementing a Customer Loyalty Card Program

Customer loyalty programs should be multi-tiered incentives that fit your brand and offer achievable reward levels based on visit frequency or purchases. Implementing a loyalty solution that integrates with your retail management system will help you facilitate the program and evaluate its success. These programs also provide customer relationship analytics that can form the foundation of a marketing campaign based on shoppers’ buying habits, frequency of their visits or loyalty to certain brands.

Customer loyalty cards don’t automatically translate into repeat business, but a proactive approach will ensure that shoppers feel like their purchases are valued so they’ll want to return. Not offering your customers a way to be loyal to your brand could be hurting your revenue.

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