Retailer Loyalty Programs - US - July 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Average number of loyalty accounts tops 10 memberships per consumer
Figure 1: Loyalty program participation (mean), by age, March 2016
Loyalty programs still offering irrelevant rewards
Figure 2: Loyalty program frustrations, March 2016
The relationship between the loyalty program and the brand
Figure 3: Attitudes toward retailer loyalty programs, by age, March 2016
The opportunities
Leverage the connection between loyalty program and brand
Figure 4: Attitudes toward retailer loyalty programs, March 2016
Personalization in high demand
Figure 5: Top five desired loyalty program features, March 2016
Increase the sophistication of targeted offers
Figure 6: Desired loyalty program features, by type of living area, March 2016
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Mobile payment will drive branded apps
Average number of children in family households declining
MARKET FACTORS 
Mobile payment will help to drive seamless loyalty interactions
Fewer multi-child households could dampen loyalty revenue
Figure 7: Number of children per family household (mean), 2000-15
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Analytics increasingly drive loyalty
Retailers redesigning for Plenti
Opportunity to engage Baby Boomers in loyalty programs
Loyalty programs shift to become digital services
WHAT’S WORKING?
Brands integrate analytics into workplace culture
Plenti drives value for consumers, retailers
Figure 8: Wellness+ with Plenti loyalty email marketing example, June 2016
WHAT’S STRUGGLING?
Baby Boomers: Underserved in loyalty marketing
Figure 9: Retail loyalty programs' impact, by generation, March 2016
Figure 10: Sears loyalty direct mail marketing example, May 2016
Figure 11: GNC Loyalty direct mail marketing example, April 2016
Figure 12: Words Baby boomers associate with product quality, February 2016
Lack of brand integration causes sales to falter
WHAT’S NEXT?
The line between loyalty program and digital services continues to blur
Greater focus on analytics to lead to more sophisticated personalization
Synchrony Financial boosts user control and experience for loyalty interactions
Figure 13: How the next best offer app enables data-driven promotions, July 2016
THE CONSUMER – WHAT YOU NEED TO KNOW 
Consumers hold more than 10 loyalty memberships
Loyalty programs continue to impact shopping
Loyalty programs are tied to brands
Loyalty still challenged by irrelevant rewards
RETAILER LOYALTY PROGRAM PARTICIPATION
Consumers now participate in more than 10 loyalty programs on average
Figure 14: Loyalty program participation (mean), March 2016
Differentiation a greater challenge in targeting younger consumers
Figure 15: Loyalty program participation (mean), by age, March 2016
Demographics with lower overall loyalty participation present opportunities for individual sectors
Figure 16: Loyalty program participation (mean), by age and household income, March 2016
Consumers discuss how they use loyalty programs
LOYALTY PROGRAMS’ IMPACT ON SHOPPING BEHAVIOR
How loyalty programs influence shopping behavior
Figure 17: Retail loyalty programs’ impact (summary), March 2016
Figure 18: Retail loyalty programs’ impact on shopping, March 2016
Loyalty fatigue increasing among 25-34s
Figure 19: Consumers’ desire for loyalty account management, April 2015-March 2016
Heightened engagement among multi-child households
Figure 20: Loyalty programs’ impact on shopping, March 2016
Brand loyalty impacts engagement among Blacks
Figure 21: Loyalty programs’ impact, by race, March 2016
RELATIONSHIP BETWEEN LOYALTY PROGRAMS AND RETAIL BRANDS
Consumers expect loyalty programs from retailers
Figure 22: Attitudes toward retailer loyalty programs, March 2016
Majority of young consumers relate loyalty program quality to retailers
Figure 23: Attitudes toward retailer loyalty programs, by age, March 2016
Moms and dads more likely to connect loyalty program and brand
Figure 24: Attitudes toward retailer loyalty programs, parental status and gender, March 2016
Figure 25: Wells Fargo Loyalty direct mail marketing example
Product-specific promotions resonate with Asians and Hispanics
Figure 26: Attitudes toward retailer loyalty programs, by race and Hispanic origin, March 2016
ATTITUDES TOWARD LOYALTY PROGRAMS
Irrelevant rewards remain a top consumer frustration
Figure 27: Loyalty program frustrations, March 2016
Older consumers underserved by loyalty programs
Figure 28: Loyalty program frustrations, by age, March 2016
Asian consumers feel it takes too long to earn rewards
Figure 29: Loyalty program frustrations, by race, March 2016
PARTICIPATION IN SELECT RETAIL LOYALTY PROGRAMS
More than 40% of loyalty program participants engaged with Amazon Prime
Figure 30: Participation in specific loyalty programs, March 2016
Lack of familiarity presents the biggest barrier for participation
Figure 31: Participation in specific loyalty programs, March 2016
Plenti: Strong traction among women 35-54
Figure 32: Participation in specific loyalty programs, by gender and age, March 2016
FEATURES THAT WOULD ENCOURAGE LOYALTY PROGRAM PARTICIPATION
Personalization: The leading driver of loyalty program engagement
Figure 33: Top five desired loyalty program features, March 2016
Social good and social media top of mind for urban loyalty consumers
Figure 34: Desired loyalty program features, by type of living area, March 2016
Younger consumers opt for mobile interaction
Figure 35: Desired loyalty program features, by age, March 2016
Consumers talk about their ideal loyalty programs
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations
APPENDIX – MARKET 
Figure 36: Number of children per family household (mean), by family type, 2000-15