Category: Europe

Cost savings trump convenience and special extras when it comes to driving membership and continued participation in UK loyalty schemes.

So says research from data marketing specialist GI Insight, whose study also shows that many consumers are not simply drawn to loyalty programmes by reward points but a range of factors attract them to join and remain active in schemes.

The survey of more than 1,000 UK consumers reveals that, while consumers are most excited about earning redeemable points when it comes to loyalty programmes – with 74% saying this is what attracts them – 60% point to vouchers or coupons providing a percentage or cash value discount as a primary driver for joining and staying active in schemes and 54% cite access to special offers.

In the report, The Lure of Loyalty, a significant proportion of consumers also indicate that convenience is an important motivating factor, with 24% pointing to a simple sign-up process as an inducement, 21% noting the appeal of an easy-to-get-to location, and 19% citing the fact they buy from a brand frequently as a draw.

However, the findings demonstrate that few consumers view accessibility to a loyalty scheme via a mobile app as real driver for enrolling and remaining active in a scheme, as just 6% list this as an element that excites them.

Additional loyalty scheme benefits such as free drinks and snacks, special deals linked to personal events and exclusive access to new products and select offers have less impact than cost savings but a noteworthy minority see these as compelling features of a scheme, with 17% seeing the freebie treats as a real plus while 12% list the other perks as an enticement.

Females are more drawn to benefits of loyalty marketing

When comparing women and men, the research reveals just a few notable differences: female respondents are more drawn than male consumers by redeemable loyalty points (78% versus 70%) and by the offer of free treats such as coffee or cake (19% versus 15%), while men are more enthused by the availability of a mobile app (8% versus 4%).

Older consumers place a greater emphasis on convenience than their younger counterparts, with more respondents in the higher age groups seeing store or business location and existing customer relationship as influential factors:

• 34% of over-65s and 23% of 55-64-year-olds say they gravitate toward the loyalty schemes of stores and businesses that are easy to get to, while only 14% of 24-34-year-olds and 15% of 35-44s say this is a deciding factor
• 29% of the over-65s and 21% of the 55-64s say shopping regularly with a brand is good reason to join a scheme, versus 12% of 25-34-year-olds and 15% of 18-24s

On the other hand, the research shows younger consumers are noticeably more excited by mobile app access to a scheme, as 10% of 18-24-year-olds and 14% of 25-34-year-olds list this as compelling reason to participate in a loyalty programme, compared to just 1% of over-65s and 2% of 55-64-year-olds.

Andy Wood (pictured), GI Insights managing director, said: “With consumers becoming more demanding about what they expect from the companies they deal with, the opportunity for organisations that run loyalty programmes to increase both membership volumes and participation are there.

“However, this can only be achieved, by understanding the key motivators for loyalty scheme participation and using the customer data captured to ensure that these elements are managed and executed in a way that suits the customer base. With all the right elements of a loyalty scheme in place, a business has the perfect platform for encouraging customers to remain loyal, spend more, buy frequently and generally expand their relationship with the business – which in turn will drive greater profitability.”

‘More than a quarter of sales for High St / multi-channel retailers will be online by end of 2014’ 

Research from IMRG (Interactive Media in Retail Group) reveals that online is taking an increasingly large share of sales for multi-channel retailers (those with a physical store presence).

In its latest e-retail survey of senior e-commerce professionals, IMRG – the UK’s industry association for e-retail, formed in 1990 – found the internet is expected to account for 27% of sales for multi-channel retailers during the fourth quarter of 2014.

Overall, the results show that 5% of these stores’ retail sales have shifted from stores to online since March this year.

In terms of growth expectations for Q4, retailers overall are more confident than last year, with 85% of survey respondents forecasting e-commerce growth in excess of 10%. In last year’s survey, 80% of respondents expected the same level of growth during the last quarter of 2013. However, the latest results reveal a higher percentage of online-only/catalogue retailers (92%) expect annual growth to be in excess of 10%, while just over three-quarters (77%) of multichannel retailers forecast the same rate of growth.

E-retail has been growing very strongly for more than ten years and mobile commerce has added even more impetus to this trend. The role of the physical retail outlet is coming under increasing scrutiny and it’s important that ALL instrumental parties recognise this.

James Roper, chairman and founder of IMRG said: “This IMRG research highlights how councils and landlords are killing so many of the UK’s high streets by ignoring the fundamental transformation taking place in shopping.

“Retailers who are already taking more than a quarter of their sales from outside of their physical stores can no longer bear the same costs and lengths of commitment to rents and business rates negotiated when all of their sales were store-based. 10,000 retail outlets have been empty for over three years and tens of thousands more are at risk as their costs rise and productivity falls.

“MRG is actively addressing this vital issue by using its seat on the Government’s Digital High Street Advisory Board to propose new principles for measuring high street performance and the creation of a new multi-channel value model to inform all stakeholders.”

The IMRG e-Retail Survey in October questioned more than 50 senior e-commerce professionals (heads of e-commerce, CEOs, managing directors and marketing directors) regarding their expectations/forecasts over the festive trading period and Q4 2014.