Only Finland has more but, paradoxically, British shoppers among least likely to use them
London – 7 December 2016. Although British shoppers are the most likely in the world to have a loyalty card, with the exception of Finland, they’re among the least likely to see or utilise the benefits, according to a Nielsen study of 63 countries.
Two-thirds of shoppers globally report being a member of a retail loyalty scheme, compared to 89% in Britain. Only Finland is higher (94%). The average British loyalty card holder has 3.6 of them, behind only Japan and Lithuania.
However, loyalty cards are much less likely to impact purchasing in Britain than around the world. For instance, only half (51%) of British loyalty card holders will buy from a retailer with a scheme over one without a scheme, if all other factors are equal. This is the second lowest figure globally (behind Denmark).
“Most UK retailers are likely to be surprised and disappointed to learn loyalty schemes only cause half of members to choose them over a competitor, and that’s if all other factors are equal”, says Mike Watkins, Nielsen’s UK head of retailer and business insight. “Whether it’s because loyalty schemes aren’t offering the right rewards, are too difficult to redeem or there are simply too many of them to make a competitive difference, retailers need to be addressing it.”
Only just over half (55%) of British loyalty scheme members say they shop more at retailers with schemes – noticeably below the global average of 67%.
In fact, across all 23 statements around behaviour, attitudes and potential benefits of loyalty schemes, Britons show less positivity than the global average, which Watkins notes “is a paradox, considering how popular they are here. This suggests Britons simply like the idea of signing up rather than actually using them – a ‘tick-box’ exercise – but the schemes aren’t personalised enough to keep them engaged. The result being UK retail is drowning in a sea of loyalty cards.”
What can retailers do?
The most valued benefits of current loyalty schemes are product discounts (cited by 53% of scheme members), cashback (50%), free products (38%) and recognition as a valued customer (20%).
Watkins points out this last benefit is particularly important in the UK as “Britons are nearly twice as likely as the global average to value being seen as an important customer, pretty much the only element of loyalty schemes Britons over-index on. So, retailers need to consider more non-financial rewards as a way to narrow the large gap between the number of schemes people are enrolled in and the number in which they actively participate.”
Watkins anticipates that retailer loyalty programmes will evolve in three ways in the future:
- They’ll increasingly use data to make offers that are personal to the loyalty member, and that can be digitally linked to both (1) Point of Sale systems for purchasing and rewards and (2) mobile for driving awareness and activation
- They’ll be fused with financial services loyalty schemes, such as those by credit card companies and other retailers, such as the John Lewis Partnership card and Tesco Visa cards, so shoppers get the best of both worlds
- They’ll become part of subscription services, such as Ocado Smart Pass and Amazon Prime. These models will allow retailers to give wider rewards and benefits for shoppers who “join the family” which are long term (so good for loyalty) as well as tactical (for immediate purchasing).
ABOUT THE GLOBAL SURVEY
The Nielsen Global Loyalty-Sentiment polled more than 30,000 online consumers in 63 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This Nielsen survey is based only on the behaviour of respondents with online access. Internet penetration rates vary by country.
Nielsen uses a minimum reporting standard of 60% internet penetration or an online population of 10 million for survey inclusion.
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement as well as analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90 percent of the world’s population. For more information, visit www.nielsen.com.