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Loyalty and Rewards in Financial Services - Canada - August 2017

Published By :

Mintel

Published Date : Aug 2017

Category :

Banking

No. of Pages : N/A

Consumers generally understand and appreciate the concept of sharing data in exchange for value so the challenge for loyalty programs is to better understand what specific customers want in exchange for their data.
Table of contents

OVERVIEW
Regional classifications
Income
EXECUTIVE SUMMARY
The issues
Nine out of 10 Canadians are enrolled in a retailer loyalty program
Figure 1: Loyalty program participation, June 2017
No annual fee and cash back rewards are the top influencers
Figure 2: Factors influencing use of primary credit card, June 2017
Older members more aware of loyalty program data tracking
Figure 3: Attitudes related to data collection (% agree), June 2017
Around a third have too many unused loyalty cards
Figure 4: Attitudes related to loyalty program communication and tracking (% agree), June 2017
Around one in four prefer to use apps rather than carry a card
Figure 5: Attitudes related to use of apps (% agree), June 2017
The opportunities
Finding untapped segments in a largely saturated credit card market
Increasingly the value-add of loyalty programs
The evolution of rewards
Data, privacy and their exchange for value
Loyalty apps can help consumers manage programs better
What it means
MARKET FACTORS WHAT YOU NEED TO KNOW
Canadas population is aging
Increased diversity means greater considerations for loyalty programs
Household debt drops marginally lower as the Bank of Canada raises rates
Some 15% of Canadians have used a rewards app
Rewards apps are among the most liked apps by users
MARKET FACTORS
Canadas population is aging
Figure 6: Population aged 0-14 and 65+, as of July 1, 1995-2035*
Figure 7: Canadian population, by age, 2016
Opportunities and challenges come with an aging population
Canada will become increasingly diverse
Increased diversity means greater considerations for loyalty programs
Household debt drops marginally lower as the Bank of Canada raises rates
Some 15% of Canadians have used a rewards app
Figure 8: Awareness and usage of digital financial products and services (select), March 2017
Reward apps are among the most like apps
Figure 9: Proportion of likes among product users, March 2017
KEY PLAYERS WHAT YOU NEED TO KNOW
Air Canada to launch own loyalty program
Air Miles makes changes to loyalty program in effort to retain customers
Data breaches hit Canadian loyalty programs
RBC Rewards goes mobile
Toronto based start-up Drop hopes to dominate North Americas loyalty market
Mobile wallet Curve launches 'time travel' tool to let you 'shop in the past'
Birch Finance helps keep track of credit card rewards
INDUSTRY DEVELOPMENTS AND INNOVATIONS
Air Canada to launch own loyalty program
Air Miles makes changes to loyalty program in effort to retain customers
Data breaches hit Canadian loyalty programs
RBC Rewards goes mobile
Toronto based start-up Drop hopes to dominate North Americas loyalty market
CIBC uses Snapchat Spectacles to capture the spontaneous moments
International Innovations
Mobile wallet Curve launches 'time travel' tool to let you 'shop in the past'
How Birch Finance helps keep track of credit card rewards
The Select Card
MARKETING CAMPAIGNS
Select campaigns from Mintel Comperemedia
Air Canada and CIBC multicurrency prepaid card
Figure 10: CIBC Air Canada email advertisement, June 2017
TD offers Aeroplan miles for setting up pre-authorized payments
Figure 11: TD aeroplan visa email, July 2017
PC Financial MasterCard offers a chance to double points by using its travel service
Figure 12: PC travel direct mail, June 2017
THE CONSUMER WHAT YOU NEED TO KNOW
Nine in 10 Canadians are enrolled in a retailer loyalty program
No annual fee and cash back rewards are the top influencers
Older members are more aware of loyalty program data tracking
Around a third have too many unused loyalty cards
Around one in four prefer to use apps rather than carry a card
Loyalty program members do not have high levels of trust with regard to data safety
PARTICIPATION IN LOYALTY PROGRAMS (BY INDUSTRY)
Nine out of 10 Canadians are enrolled in a retailer loyalty program
Figure 13: Loyalty program participation, by industry, June 2017
Women have a higher participation but in different types of programs
Figure 14: Loyalty program participation (select), men vs women, June 2017
18-24s have a lower overall participation rate
Over-55s have a higher participation in hotel, airline and department store programs
Chinese Canadians have different preferences
Figure 15: Loyalty program participation (select), Chinese Canadians vs overall, June 2017
LGBTQs more likely to participate in specialty retailer loyalty programs
Figure 16: Loyalty program participation (select), LGBTQs vs overall population, June 2017
PARTICIPATION IN LOYALTY PROGRAMS (BY PROGRAM TYPE)
Air Miles is the most popular loyalty program
Figure 17: Loyalty program participation, by type of program, June 2017
Three in four women are Air Miles members
Figure 18: Loyalty program participation (select), by gender, June 2017
Younger Canadians have a higher participation in My Starbucks, SCENE, Amazon Prime and Beauty Insider
Figure 19: Loyalty program participation, by age, June 2017
CREDIT CARD OWNERSHIP
Nine in 10 Canadians own a credit card
Figure 20: Credit card ownership, by age and household income, June 2017
Finding untapped segments in a largely saturated credit card market
FACTORS INFLUENCING USE OF PRIMARY CREDIT CARD
No annual fee and cash back rewards are the top influencers
Figure 21: Factors influencing use of primary credit card, June 2017
Entertainment rewards and free gifts are stronger influencers for younger consumers
Figure 22: Factors influencing usage of primary credit card (select), by age, June 2017
Special access and charity affiliations are of more interest to LGBTQs
Figure 23: Factors influencing usage of primary credit card (select), LGBTQs vs overall population, June 2017
Travel rewards and special status appeal to high income earners
Figure 24: Factors influencing usage of primary credit card (select), high income earners vs overall population, June 2017
Men relatively more willing to pay a higher fee for better rewards
Figure 25: Attitudes related to credit cards and rewards (% agree), June 2017
Analyzing attrition
EARNING REWARDS
Around half of credit card owners prefer cash-back rewards
Figure 26: Attitudes related to rewards (% agree), June 2017
LGBTQs more likely to question the value of loyalty programs
Figure 27: Attitudinal statement related to value and rewards (% agree), June 2017
Increasingly the value-add of loyalty programs
Around half believe earning rewards requires too many purchases
Figure 28: Attitudes related to rewards, June 2017
The evolution of rewards
DATA AND PRIVACY
Older members more aware of loyalty program data tracking
Figure 29: Attitudes related to data collection (% agree), June 2017
Men are relatively more concerned about data collection
Figure 30: Attitudes related to data collection (select), men vs women, June 2017
Around a fifth of consumers are willing to share more data to get more discounts
Figure 31: Attitudes related to privacy (% agree), June 2017
Loyalty program members do not have high levels of trust with regard to data safety
Figure 32: Attitudes related to trust, June 2017
LOYALTY PROGRAM TRACKING AND COMMUNICATION
Around a third have too many unused loyalty cards
Figure 33: Attitudes related to loyalty program communication and tracking, June 2017
Younger members more likely to have trouble with tracking and usage
Figure 34: Attitudes related to loyalty program communication and tracking (% agree), by age, June 2017
Loyalty apps can help consumers manage programs better
Around one in four prefer to use apps rather than carry a card
Figure 35: Attitudes related to use of apps (% agree), June 2017
Young males are the keenest on app usage
Figure 36: Attitudes related to use of apps, men by age, June 2017
55-64s more satisfied with loyalty program communication
Figure 37: Attitudinal statement related to loyalty program communication (% agree), by age, June 2017
Quality of loyalty programs more likely to influence younger consumers
Figure 38: Attitudinal statement related to loyalty program reputation (% agree), June 2017
APPENDIX DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Consumer qualitative research
Abbreviations and terms

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