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CUSTOMER LOYALTY AND REWARD SCHEMES - UK - JUNE 2018

Published By :

Mintel

Published Date : Jun 2018

Category :

Lifestyle

No. of Pages : N/A

Retailers need to increasingly evolve their loyalty schemes so that they are not just focused on points and monetary rewards, but on engaging emotionally with customers by offering them unique experiences or services. Given that membership of rewards schemes is currently skewed towards consumers aged 45 and over, this is key to engaging with younger shoppers who are most attracted to exclusive offers.

Table of contents
OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Consumer confidence on the rise
Figure 1: Consumer confidence tracker, Jan 2016 – April 2018
Companies and brands
Tesco Clubcard dominates
Amazon Prime
Bink integrates loyalty schemes onto card payments
The consumer
84% belong to loyalty schemes
Figure 2: Membership of customer loyalty scheme and paid subscription pass, April 2018
Tesco Clubcard most popular
Figure 3: Membership of customer loyalty/reward schemes, April 2018
Dissatisfaction with personalised offers
Figure 4: Satisfaction with customer loyalty schemes, April 2018
Under-35s keen on exclusive offers
Figure 5: Factors that most attract consumers to consumer loyalty/reward schemes, April 2018
Amazon Prime most popular subscription scheme
Figure 6: Membership of paid subscription/delivery passes, April 2018
Delivery the most important factor for consumers
Figure 7: Factors that most attract consumers to paid subscription/delivery passes, April 2018
Online offering important
Figure 8: Attitudes to customer loyalty/reward schemes, April 2018
What we think
ISSUES AND INSIGHTS
How can loyalty schemes appeal to younger consumers?
The facts
The implications
The rise in subscription models
The facts
The implications
What are loyalty schemes doing to attract members?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Consumer confidence on the rise
Online financial data concerns may prove to be a barrier
Discounters continue to rise
MARKET DRIVERS
Consumer confidence on the rise
Figure 9: Consumer confidence tracker, Jan 2016 – April 2018
Smartphone ownership above 80%
Figure 10: Ownership of mobile phones, January 2012-December 2017
Online security concerns
Figure 11: Online account security concerns, April 2018
Sharing data concerns
Figure 12: Concerns over sharing data with companies, by data type – NET, December 2017
Consumers have noticed price increases
Figure 13: Attitudes to supermarkets, September 2017
Discounters continue to rise
Figure 14: Leading grocery retailers’ share of sector sales, 2012-17
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Company loyalty schemes
Paid subscription models
Bink integrates loyalty schemes onto card payments
Co-op expands membership scheme to electricals
Nectar spends the most on advertising
Amazon Prime – Little Horse
COMPANY LOYALTY SCHEMES
Tesco Clubcard
Nectar
Boots Advantage Card
myWaitrose
Morrisons’ More Card
Co-op Membership Card
M&S Sparks Card
My John Lewis
Superdrug Health & Beautycard
IKEA Family card
Debenhams Beauty Club
ASOS A-List
H&M Club
B&Q Club
PAID SUBSCRIPTION MODELS
Amazon Prime
Tesco Delivery Saver
Asda Grocery delivery Pass
Sainsbury’s Grocery Delivery
Morrisons’ Delivery Pass
ASOS Premier
Next Unlimited
New Look Delivery Pass
LAUNCH ACTIVITY AND INNOVATION
New launches
Tesco overhauls Clubcard points and makes cards contactless
Figure 15: Tesco contactless Clubcard
Sainsbury’s trials new Nectar scheme
Morrisons launches new-style Morrisons More card amid overhaul
Figure 16: Morrisons More card
Spar launches loyalty scheme and app with Zapper
Feelunique launches next-day delivery pass
New Look launches unlimited delivery pass
H&M launches loyalty scheme in the UK
Personalised schemes
Waitrose scraps ‘pick your own offers’ loyalty scheme
Digitisation
Bink integrates loyalty schemes onto card payments
New offers
M&S trials one-hour delivery for loyalty card holders
Amazon Prime expands delivery speeds and network
Amazon Treasure Truck
Figure 17: Amazon Treasure Truck, December 2017
Co-op expands membership scheme to electricals
ADVERTISING AND MARKETING ACTIVITY
Nectar spends the most on advertising
Figure 18: Recorded above-the-line, online display and direct mail total advertising expenditure by leading loyalty schemes, delivery passes and paid subscription models, 2015-18
Figure 19: Recorded above-the-line, online display and direct mail total advertising expenditure by leading loyalty schemes, 2015-18
Figure 20: Recorded above-the-line, online display and direct mail total advertising expenditure by leading delivery passes and paid subscription models, 2015-18
Direct mail the most popular way to advertise
Figure 21: Recorded above-the-line, online display and direct mail total advertising expenditure on expenditure by leading loyalty schemes, delivery passes and paid subscription models, by media type and advertiser, 2017
Campaign highlights
Nectar: A Nation of Individuals
Tesco Clubcard Partners and Money off
Amazon Prime – Little Horse
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
84% belong to loyalty schemes
Tesco Clubcard most popular
Dissatisfaction with personalised offers
Under-35s keen on exclusive offers
Amazon Prime most popular subscription scheme
Delivery the most important factor for consumers
Online offering important
MEMBERSHIP OF LOYALTY AND PAID SUBSCRIPTION SCHEMES
84% belong to loyalty schemes
Figure 22: Membership of customer loyalty scheme and paid subscription pass, April 2018
Membership of paid subscription skewed to under-35s
Figure 23: Membership of customer loyalty scheme and paid subscription pass, by age group, April 2018
MEMBERSHIP OF CUSTOMER LOYALTY SCHEMES
Tesco Clubcard most popular
Figure 24: Membership of customer loyalty/reward schemes, April 2018
Recent usage of loyalty schemes
Figure 25: Usage of customer loyalty/reward schemes in the last 6 months, April 2018
IKEA loyalty scheme draws youngest members
Figure 26: Active members of loyalty schemes who have used them in the last 6 months by age and socio-economic group, April 2018
Frequency of usage of loyalty schemes
Figure 27: Frequency of usage of customer loyalty/reward schemes, April 2018
Multiple membership of loyalty cards
Figure 28: Membership of customer loyalty/reward schemes, April 2018
Figure 29: Repertoire of usage of customer loyalty/reward schemes in the last 6 months, April 2018
SATISFACTION WITH CUSTOMER LOYALTY SCHEMES
Dissatisfaction with personalised offers
Figure 30: Satisfaction with customer loyalty schemes, April 2018
Low satisfaction with ease of use online
Superdrug Card has the highest level of satisfaction
Figure 31: Percentage point differentiation with overall satisfaction with customer loyalty schemes by the main loyalty schemes used in the last six months, April 2018
Figure 32: Percentage point differentiation with satisfaction with customer loyalty schemes by the main loyalty schemes used in the last six months, April 2018
Retailers need to prioritise personalised offers
Figure 33: Key drivers of overall satisfaction with customer loyalty/reward schemes, April 2018
Figure 34: Overall satisfaction with customer loyalty/reward schemes - key driver output, April 2018
FACTORS THAT ATTRACT CONSUMERS TO LOYALTY SCHEMES
Young want money off products, while old like accumulating points
Figure 35: Factors that most attract consumers to consumer loyalty/reward schemes, April 2018
Under-35s keen on exclusive offers
Promoting partnerships with different businesses
MEMBERSHIP OF PAID SUBSCRIPTION/DELIVERY PASSES
Amazon Prime most popular subscription scheme
The rise in subscription models
Loyalty scheme vs subscription/delivery pass
Loyalty schemes
Subscription schemes/delivery passes
Figure 36: Membership of paid subscription/delivery passes, April 2018
Most consumers only use one subscription scheme/delivery pass
Figure 37: Repertoire of membership of paid subscription/delivery passes, April 2018
FACTORS THAT ATTRACT CONSUMERS TO PAID SUBSCRIPTION/DELIVERY PASSES
Delivery the most important factor for consumers
Exclusivity valued
Figure 38: Factors that most attract consumers to paid subscription/delivery passes, April 2018
ATTITUDES TOWARDS CUSTOMER LOYALTY/REWARD SCHEMES
Online offering important
The impact of GDPR and concerns over personal data
Rewards for sharing on social media
Figure 39: Attitudes to customer loyalty/reward schemes, April 2018
Charity donation popular with young people
Figure 40: Attitudes to customer loyalty/reward schemes, by demographics, April 2018
Loyalty schemes influence consumers to shop at certain retailers
Figure 41: Attitudes to customer loyalty/reward schemes, by membership of customer loyalty/reward scheme, April 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – KEY DRIVER ANALYSIS
Interpretation of results
Figure 42: Overall satisfaction with customer loyalty/reward schemes - key driver output, April 2018
Figure 43: Satisfaction with customer loyalty/reward schemes, April 2018

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