Table of Contents
Executive Summary
-
- The Market
- 82% have memberships to loyalty schemes
-
- Figure 1: Membership of customer loyalty schemes and paid subscription passes, May 2020
- Consumer confidence collapses with COVID-19
-
- Figure 2: Consumer confidence tracker, January 2018-May 2020
- Impact of COVID-19 on Customer loyalty
- Emerging challenges can be turned into opportunities
- The emotional power of support and cooperation in times of need
- Rethinking the way to engage with consumers
-
- Figure 3: Expected impact of COVID-19 on Customer Loyalty, short, medium and long-term, June 2020
- Companies and Brands
- Tesco dominates supermarket sector with Clubcard
-
- Figure 4: Membership of customer loyalty/reward schemes, May 2020
- Free breakages insurance with IKEA Family Card
- Amazon Prime benefits go way beyond just fast delivery
- The Consumer
- Dissatisfaction with rewards personalised offers
-
- Figure 5: Satisfaction with customer loyalty schemes, May 2020
-
- Figure 6: Factors that most attract consumers to consumer loyalty/reward schemes, May 2020
- Amazon Prime continues to lead among subscription schemes
-
- Figure 7: Membership of paid subscription/delivery passes, May 2020
- Delivery and free returns are key to paid subscription members
-
- Figure 8: Factors that most attract consumers to paid subscription/delivery passes, May 2020
- Support with utility bills is a potential opportunitiy during COVID-19 times
-
- Figure 9: Attitudes to customer loyalty/reward schemes, May 2020
- What we think
The Impact of COVID-19 and Customer Loyalty
-
- Short, medium and long-term impact on the industry
- Short-term
- Medium-term
- Long-term
- Opportunities and Threats
- Emerging challenges can be turned into opportunities
-
- Figure 10: M&S Sparks’ donations to selected charities during the COVID-19 pandemic, July 2020
- The emotional power of support and cooperation in times of need
- Rethinking the way to engage with consumers
-
- Figure 11: Example of Vodafone VeryMe experiential rewards, June 2020
- Figure 12: Sainsbury’s Nectar rewards supporting charities, June 2020
- Changing the rules to better benefit their members
-
- Figure 13: British Airways Executive Club, examples of how to collect ‘Avios’, June 2020
- Finding and engaging with brand ambassadors
-
- Figure 14: DSW Friends & Benefits email campaign, May 2019
- Shifts in consumer behaviour
- A fundamental change in shopping behaviours
- UK shoppers remain pessimistic about the future
-
- Figure 15: Those claiming to have an extremely negative outlook on the following factors, 16 April-11 June 2020
- At least four in 10 are still cutting back on discretionary spending
- Spending will increase differently across sectors
-
- Figure 16: Those expecting to spend more on the following sectors next month, May-July 2020
- How a COVID-19 recession will reshape the market
- Competing with discounters
- But budgeting behaviours will gradually soften
- COVID-19: Market context
- Economic and other assumptions
Issues and Insights
-
- Customer loyalty in the context of COVID-19
- The facts
- The implications
-
- Figure 17: John Lewis donates to local charities, May 2020
- Younger shoppers want experiences and to engage in social media
- The facts
- The implications
The Market – What You Need to Know
-
- Consumer confidence collapses with COVID-19
- UK shoppers remain pessimistic about the future
- Loyalty schemes can support consumers during the crisis
- Discounters continue to gain relevance
Market Drivers
-
- Consumer confidence collapses with COVID-19
-
- Figure 18: Consumer confidence tracker, January 2018-May 2020
- Smartphone ownership remains stable above 80%
-
- Figure 19: Ownership of mobile phones, January 2013-December 2019
- UK shoppers remain pessimistic about the future
-
- Figure 20: Those claiming to have an extremely negative outlook on the following factors, 28 May-3 June 2020
- Supermarket loyalty schemes benefit from COVID-19
-
- Figure 21: Membership of customer loyalty/reward schemes, by sector, May 2020
- Loyalty schemes can support consumers during the crisis
-
- Figure 22: Attitudes to customer loyalty/rewards schemes, May 2020
- Discounters continue to gain relevance
-
- Figure 23: Leading grocery retailers’ share of sector sales, 2013-19
Companies and Brands – What You Need to Know
-
- Tesco dominates supermarket sector with Clubcard
- Free breakages insurance with IKEA Family Card
- Amazon Prime benefits go way beyond just fast delivery
- The UK’s first grocery loyalty subscription service
- Sainsbury’s rolls out a digital revamped version of its Nectar loyalty scheme
- Asda introduce Priority Pass for the most vulnerable during COVID-19 lockdown
- Innovative start-up scheme - For Good Causes
- Aggregate advertising spend on loyalty/reward cards up 38% year-on-year in 2019
Company Loyalty Schemes
-
- Supermarkets
- 19 million UK households with Tesco Clubcard
- Sainsbury’s revamp Nectar
- No points to collect with myWaitrose, just instant rewards
- Co-op Membership’s charitable differentiator
- Morrisons More £5 voucher for every 5,000 points earned
- For every £20 saved onto a Bonus Card, Iceland adds £1
- Health and beauty retailers
- Boots make its Advantage Card loyalty scheme digital
- Superdrug loyalty scheme less generous than Boots, but more flexible
- The Perfume Shop Rewards Club members £10 ‘Off’ referral incentive
- Department stores
- Free delivery and beauty tips with Debenhams Beauty Club membership
- Clothing retailers
- Shop now and pay later with H&M Club
- M&S Sparks relaunch in July 2020
- Free Oops-assurance if something breaks with IKEA Family loyalty scheme
- Van rental discount with B&Q Club membership
- Dobbies Club money-back vouchers
Paid Subscription Models
-
- Amazon Prime one of the most popular paid subscription schemes
- Tesco launch the UK’s first grocery loyalty subscription service
- Morrisons unlimited deliveries Delivery Pass
- Sainsbury’s Delivery Pass
- Ocado Smart Pass
- ASOS scrap A-List and push Premier Delivery scheme
- Selfridges Plus
- Next Unlimited
- New Look Delivery Pass
- Boux Avenue Deluxe VIP Delivery Pass
- Quiz QVIP delivery pass
- Arcadia brands Premier and Unlimited delivery pass
- Dorothy Perkins Unlimited Delivery
- boohoo Premier
- JD Sports JDX Unlimited
- PrettyLittleThing give anyone named Meghan free PLT Royalty membership
- Free hot drinks in the restaurant every month with Dobbies Club Plus
Launch Activity and Innovation
-
- Digitisation of loyalty schemes
- Sainsbury's overhauls Nectar with shift to digital loyalty scheme
- Boots rolls out digital version of Advantage Card loyalty scheme
- Co-op digitise its membership scheme
- Fee-based loyalty scheme launches
- Tesco launch paid-for subscription version of Clubcard loyalty scheme
- Nike launches kids’ footwear subscription service
- New loyalty schemes and reward cards
- Fruit loyalty scheme
- Asda’s Christmas savings loyalty scheme and Priority Pass for the most vulnerable during COVID-19 lockdown
- Intu rewarding customers for shopping in its centres
- Encouraging loyalty through moral appeal
- Every purchase with Lakeland’s new loyalty card generates money for charity
- Converting loyalty points and rewards into a digital monetary charity donation
- Loyalty schemes offering unique and experiential rewards
- H&M bolsters loyalty programme with exclusive live music events
- Vans member-only contests and experiences
- adidas Creators Club rewards customers with exclusive drops and invitations to special events
- Access to unique experiences and exclusive meet and greets with influencers and celebrities
- John Lewis and Waitrose launch virtual wellbeing workshops for members during COVID-19 lockdown
Advertising and Marketing Activity
-
- Advertising spend on loyalty/reward cards up 38% year-on-year in 2019
-
- Figure 24: Total above-the-line online display and direct mail advertising expenditure on loyalty/reward cards by leading UK retailers, 2016-19
- Leading retailers advertising spend on loyalty/reward cards
-
- Figure 25: Leading UK retailers total above-the-line online display and direct mail advertising expenditure on loyalty/reward cards, 2016-19
- Brand campaign highlights
- Tesco Clubcard Plus multi-channel launch campaign
- Advertising spend behind Amazon Prime Membership up nearly 198% year-on-year in 2019
- Sainsbury’s pushes new Nectar app
- Boots Advantage Card points for goals promotion
-
- Figure 26: Leading UK retailers total above-the-line online display and direct mail advertising expenditure on loyalty/reward cards, by brand, 2016-19
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
-
- Loyalty schemes still reach 82% of consumers
- Tesco Clubcard and Nectar lead in popularity
- Dissatisfaction is highest for personalised offers and rewards
- Loyalty scheme members want points to spend in-store
- Amazon Prime remains the leader among subscription schemes
- Delivery remains the most important factor
- Support with utility bills is key during COVID-19 times
Membership of Loyalty and Paid Subscription Schemes
-
- Loyalty schemes still reach 82% of consumers
-
- Figure 27: Membership of customer loyalty scheme and paid subscription pass, April 2018 vs May 2020
- Membership of paid subscription skewed to under-35s
-
- Figure 28: Membership of customer loyalty scheme and paid subscription pass, by age group, May 2020
Membership of Customer Loyalty Schemes
-
- Tesco Clubcard and Nectar lead in popularity
-
- Figure 29: Membership of customer loyalty/reward schemes, May 2020
-
- Figure 30: Membership of customer loyalty/reward schemes, May 2020
- Recent usage of loyalty schemes
-
- Figure 31: Usage of customer loyalty/reward schemes in the last six months, May 2020
-
- Figure 32: Usage of customer loyalty/reward schemes in the last six months, May 2020
- IKEA and Superdrug loyalty members still the youngest
-
- Figure 33: Active members of loyalty schemes who have used them in the last six months, by age and socio-economic group, May 2020
- Frequency of usage of loyalty schemes
-
- Figure 34: Frequency of usage of customer loyalty/reward schemes, May 2020
- Multiple membership of loyalty cards
-
- Figure 35: Membership of customer loyalty/reward schemes, May 2020
- Figure 36: Repertoire of usage of customer loyalty/reward schemes in the last six months, May 2020
Satisfaction with Customer Loyalty Schemes
-
- Dissatisfaction is highest for personalised offers and rewards
-
- Figure 37: Satisfaction with customer loyalty schemes, May 2020
- Value of loyalty apps versus effective website
-
- Figure 38: Those satisfied with customer loyalty schemes, by age group, May 2020
- Boots Advantage Card has the highest level of satisfaction
-
- Figure 39: Satisfaction with customer loyalty schemes, May 2020
-
- Figure 40: Percentage point differentiation with satisfaction with customer loyalty schemes by main schemes used in the last six months, May 2020
Factors that Attract Consumers to Loyalty Schemes
-
- Loyalty scheme members want points to spend in-store
-
- Figure 41: Factors that most attract consumers to consumer loyalty/reward schemes, May 2020
- But younger members favour other benefits
-
- Figure 42: MyChelle Beauty using social media to launch its ‘Clean Beauty Club’ program, 2020
-
- Figure 43: Factors that most attract consumers to consumer loyalty/reward schemes, by age, May 2020
- Personalised offers for younger consumers
Membership of Paid Subscription/Delivery Passes
-
- Amazon Prime remains the leader among subscription schemes
-
- Figure 44: Membership of paid subscription/delivery passes, May 2020
- Other subscription models struggling to grow
-
- Figure 45: Membership of paid subscription/delivery passes, April 2018 vs May 2020
- Loyalty scheme versus subscription/delivery pass
- Loyalty schemes
- Subscription schemes/delivery passes
-
- Figure 46: Membership of paid subscription/delivery passes, by sector, May 2020
- Most consumers only use one subscription scheme/delivery pass
-
- Figure 47: Repertoire of membership of paid subscription/delivery passes, May 2020
Factors that Attract Consumers to Paid Subscription/ Delivery Passes
-
- Delivery remains the most important factor
- Free returns gain relevance
-
- Figure 48: Factors that most attract consumers to paid subscription/delivery passes, May 2020
Attitudes to Customer Loyalty/Reward Schemes
-
- Support with utility bills is key during COVID-19 times
- Consumers still concerned about their data
- Rewards and experiences to enjoy at home
-
- Figure 49: Attitudes to customer loyalty/reward schemes, May 2020
- Experiences are particularly important to the young
-
- Figure 50: Those agreeing to statements about customer loyalty/reward schemes, by age, May 2020
- The young want to donate but find loyalty schemes confusing
-
- Figure 51: Those agreeing to statements about customer loyalty/reward schemes, by age, May 2020
- Attitudes to customer loyalty by scheme
-
- Figure 52: Attitudes to customer loyalty/reward schemes, by membership, May 2020
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Abbreviations
- Consumer research methodology
Back to top