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Customer Loyalty and Reward Schemes - UK - December 2015

Published By :

Mintel

Published Date : Dec 2015

Category :

Lifestyle

No. of Pages : N/A

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Table of Content

Overview

What you need to know
Areas covered in this report

Executive Summary

The market
Rising consumer confidence good for loyalty
Smartphone ownership grows but concerns persist
Price and convenience drive choice for food retailing
Discounter growth leads to changing perceptions
Companies, brands and innovations
Pick your own offers
Digital receipt storing
M&S launches ‘Sparks’ loyalty scheme
Digital loyalty
The consumer
84% have used a loyalty scheme in the past six months
Figure 1: Active members (used in the past six months) of retail loyalty schemes, August 2015
Affluence leads to greater use of loyalty schemes
Figure 2: Loyalty scheme repertoire use, by average age and affluence on a six-point scale, August 2015
Consumers show a lack of commitment to loyalty schemes
Figure 3: Use of customer loyalty schemes, August 2015
More choice in redemption
Getting it faster
Figure 4: Attitudes towards loyalty schemes, August 2015
Perceived lack of value is holding back membership
Figure 5: Reasons for not joining loyalty schemes, August 2015
Consumers want choice and surprises
Figure 6: Encouraging greater use of loyalty schemes, August 2015
What we think

Issues and Insights

Digital loyalty
The facts
The implications
Reducing the gap between spend and reward
The facts
The implications
Appealing to the more affluent shopper
The facts
The implications

The Market – What You Need to Know

Rising consumer confidence good for loyalty
Smartphone ownership grows but concerns persist
Price and convenience drive choice for food retailing
Discounter growth leads to changing perceptions

Market Drivers

Consumer confidence
Figure 7: Financial well-being index, February 2012-October 2015
Smartphone ownership
Figure 8: Ownership of mobile phones, April 2012-June 2015
Figure 9: Agreement with the statement “I’d like to be able to use a smartphone to pay for purchases in shops, restaurants and other high street stores”, by age, July 2015
Factors affecting choice of supermarket
Figure 10: Factors in choosing where to shop, August 2015
Figure 11: Profile of people valuing key factors, August 2015
Figure 12: Regional profile of factor preferences, August 2015
Discounter growth is changing perceptions
Figure 13: Leading grocery retailers’ share of sector sales, 2010-15

Key Players – What You Need to Know

Leading schemes
Innovations
Advertising
Brand loyalty

Customer Loyalty Schemes

Tesco Clubcard dominates
Nectar cuts points
Boots Advantage Card trials PYO
myWaitrose specialises in instant rewards
Morrisons’ Match & More shifts focus
My John Lewis focuses on making shopping easier
House of Fraser introduces digital Recognition card
B&Q Club offers tailored benefits
Love Your Body card offers generous returns
Superdrug Health & Beautycard
IKEA Family card enhances the shopping experience
Debenhams Beauty Club
GAME rewards

Launch Activity and Innovation

Pick your own offers
Figure 14: Waitrose, pick your own offers scheme, 2015
Digital receipt storing
M&S launches ‘Sparks’ loyalty scheme
Figure 15: The new Sparks card by M&S, October 2015
Digital loyalty
Walgreens Balance Rewards
Lotte’s digital department store

Advertising and Marketing Activity

Nectar card the biggest advertiser
Figure 16: Recorded above-the-line, online display and direct mail total advertising expenditure by the leading loyalty schemes, 2011-14
Tesco Clubcard uses seasonal adverts
Morrisons Match & More advert ban
Figure 17: Recorded above-the-line, online display and direct mail total advertising expenditure by the leading loyalty schemes, 2011-14
A note on adspend

Brand Research

What you need to know
Asda and Tesco are favourite brands
Figure 18: Preferred or favourite food retailers, August 2015
Key brand metrics
Figure 19: Key metrics for selected supermarket brands, August 2015
Brand attitudes
Figure 20: Attitudes, by supermarket brand, August 2015

The Consumer – What You Need to Know

84% have used a loyalty scheme in the past six months
Affluence leads to greater use of loyalty schemes
A lack of loyalty
Consumers want quicker rewards
Appeal of digital innovation varies by age
Almost half want more choice

Membership of Loyalty Schemes

Loyalty scheme membership at 84%
Figure 21: Members of loyalty schemes that they have used in the past six months, August 2015
Loyalty scheme membership rises in 2015
Figure 22: Membership of loyalty schemes, August 2014 and August 2015
Boots has the highest number of lapsed members
Figure 23: Membership of loyalty schemes, August 2015
Biggest loyalty schemes need to attract younger members
Figure 24: Active members of retailer loyalty schemes by age and socio-economic group, August 2015
Women are significantly more likely to be active loyalty scheme members
Figure 25: Membership of retailer loyalty schemes netted by category, by gender, August 2015
Affluence leads to greater use of loyalty schemes
Figure 26: Loyalty scheme repertoire use, by average age and affluence on a six-point scale, August 2015

Usage of Loyalty Schemes

Deal hunters
Figure 27: Use of customer loyalty schemes, August 2015
Overcoming forgetfulness
Figure 28: Use of customer loyalty schemes, selected options by scheme type, August 2015
The gender gap
Figure 29: Use of customer loyalty schemes, by gender, August 2015

Attitudes towards Loyalty Schemes

Loyalty points take too long to accumulate
Figure 30: Attitudes towards loyalty schemes, August 2015
Minimise the rewards
Younger consumers are keen to use smartphones
Figure 31: Selected attitudes towards loyalty schemes, by age, August 2015

Reasons For Not Joining Loyalty Schemes

Perceived value is holding back membership
Figure 32: Reasons for not joining loyalty schemes, August 2015
Young Millennials reject loyalty schemes
Figure 33: Non-members of any loyalty scheme, by generation, August 2015

Encouraging Greater Use of Loyalty Schemes

Consumers want more choice
Figure 34: Encouraging greater use of loyalty schemes, August 2015
Women want choices and surprises
Figure 35: Encouraging greater use of loyalty schemes, by gender, August 2015
Men want simplicity

Appendix – Data Sources, Abbreviations and Supporting Information

Data sources
Abbreviations

List of Table

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