Author: Mintel Group Ltd.
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Retailer Loyalty Programs - US - July 2014
Scope and Themes
 
What you need to know 
The share of consumers who reported participating in customer loyalty programs rose between 2013 and 2014 for every retail sector, with electronics supply stores, mass merchandisers, and online-only retailers making considerable gains – Mintel data show loyalty participation for all of these categories rose at least 10 percentage points between this report and the last. As overall loyalty program participation rises, however, it will be more difficult for retailers to differentiate their initiatives from the programs offered by the competition.

This report finds that monetary incentives are the most important for consumers when they think about loyalty programs. However, loyalty programs can stand out by offering the types of promotions that loyalty participants are most receptive to and by appealing to shoppers’ myriad shopping motivations. 

Other themes in this report include overall receptiveness to promotional communication, which communication mediums consumers prefer, and the core frustrations that consumers have with the loyalty programs they participate in.

This report builds on the analysis presented in Mintel’s Retailer Loyalty Programs – US, August 2013, Loyalty Marketing – US, September 2010, Customer Satisfaction and Loyalty Programs – US, January 2010, and Loyalty Program Consumer – US, July 2003. 

Definition 
For the purpose of this report, 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.

Value figures throughout this report are at retail selling prices (rsp) excluding sales tax unless otherwise stated. 

Data sources
Consumer survey data
For the purposes of this report, Mintel commissioned exclusive consumer research through GMI to explore consumer attitudes and behaviors surrounding loyalty programs in the retail sector. Mintel was responsible for the survey design, data analysis, and reporting. Fieldwork was conducted in May 2014 among a sample of 2,000 adults aged 18+ with access to the internet.

Mintel selects survey respondents so that they are proportionally balanced to the entire US adult population based on the key demographics of gender, age, household income, and region. Mintel also slightly oversamples, relative to the population, respondents that are Hispanic or Black to ensure an adequate representation of these groups in the survey results. Please note that Mintel surveys are conducted online and in English only. Hispanics who are not online and/or do not speak English are not included in the survey results.

The Experian Marketing Services, Simmons NCS/NHCS (National Consumer Study /National Hispanic Consumer Study) was carried out during November 2012 – December 2013, and the results are based on the sample of 23,689 adults aged 18+, with results weighted to represent the US adult population. 

While race and Hispanic origin are separate demographic characteristics, Mintel often compares them to each other. Please note that the responses for race (White, Black, Asian, Native American, or other race) will overlap those that also are Hispanic, because Hispanics can be of any race.

Direct marketing creative 
All estimated mail volume data and consumer direct mail and email marketing creatives are provided by Mintel Comperemedia. 

Mintel Comperemedia is a searchable competitive database tracking direct mail, print, and online advertising in the US and Canada, as well as email in the US. Comperemedia tracks information across eight sectors: Banking, Credit Card, Investments, Insurance, Mortgage and Loan, Telecom, Travel and Leisure, and Automotive. 

 For more information, please contact Account Services Management at 312.450.6353 or www.mintel.com.

Abbreviations
The following is a list of abbreviations used in this report. 

CPI | Consumer Price Index
NHCS | National Consumer Study /National Hispanic Consumer Study (Experian Marketing Services)
rsp | Retail selling price
SOV | Share of voice

Terms
Generations are discussed within this report, and they are defined as: 

World War II/Swing Generations | Members of the WWII Generation were born in 1932 or before and are aged 82 or older in 2014. Members of the Swing Generation were born from 1933-45 and are aged 69-81 in 2014.
Baby Boomers | The generation born between 1946 and 1964. In 2014, Baby Boomers are between the ages of 50 and 68.
Generation X | The generation born between 1965 and 1976. In 2014, Gen Xers are between the ages of 38 and 49
Millennials* | The generation born between 1977 and 1994. In 2014, Millennials are between the ages of 20 and 37.
iGeneration** | Born between 1995 and 2007, members of iGen are aged 7 to 19 in 2014.
Emerging Generation | The newest generation began in 2008 as the annual number of births declined sharply with the recession. In 2014 members of this as-yet-unnamed generation are under age 7.

* also known as Generation Y or Echo Boomers

** previously known as Post-Millennials and the Matrix Generation 

In order to provide an inflation-adjusted price value for markets, Mintel uses the CPI to deflate current prices. The CPI is defined as follows: 

CPI

The Consumer Price Index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

The CPI and its components are typically used to adjust other economic series for price changes and to translate these series into inflation-free dollars. Examples of series adjusted by the CPI include retail sales, hourly and weekly earnings, and components of the national income and product accounts. In addition, and in Mintel reports, the CPI is used as a deflator of the value of the consumer’s dollar to find its purchasing power. The purchasing power of the consumer's dollar measures the change in the value to the consumer of goods and services that a dollar will buy at different dates. 

The CPI is generally the best measure for adjusting payments to consumers when the intent is to allow consumers to purchase, at today’s prices, a market basket of goods and services equivalent to one that they could purchase in an earlier period. It is also the best measure to use to translate retail sales into real or inflation-free dollars.

Based on Bureau of Labor Statistics definition.

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