Where Do Consumer Loyalties Really Lie?
By Bernice Hurst, Contributing Editor, RetailWire
A new survey shows loyalty in specialty, drug, department stores and restaurants increasing while groceries decrease. Bulking up: The 2013 COLLOQUY Loyalty Census, reveals saturation in supermarket loyalty programs with a one percent drop in enrollment over the past two years.
Department stores have increased loyalty program membership by 70 percent since 2011, drug stores by 45 percent and specialty retailers 26 percent. Specialty is now close to passing airlines into second place behind financial services.
Restaurants grew by an "explosive 171 percent," airlines by 14 percent. Overall membership has increased by 26.7 percent.
COLLOQUY says "the number of active memberships (defined as members engaging at least once in the preceding 12 months) has grown in the previous two years." However, the study found that the percentage of active memberships in relation to total memberships actually slipped from 46 to 44 percent "which suggests either new programs can't keep members engaged, or that both new and existing programs are failing to strike a chord."
COLLOQUY lists six possible reasons, with analysis and recommendations for change (or not).
"The overall focus must shift from acquiring new memberships to better engaging the customer base," COLLOQUY advises, adding tha "increasingly sophisticated programs" are "revitalizing engagement with existing members while attracting new participants."
Revitalized engagement includes Safeway giving members discounts plus coupons based on past purchases, and Fred Meyer sending coupons based on expenditure. Albertsons, however, notably abolished its card in favor of offering "great" prices to all customers.
COLLOQUY wonders why only 9.5 of 21.9 memberships (the average number per household) are currently active. Some conclusions raise further questions. Are people actually joining loyalty schemes because the economy is recovering, as the report says, or do they simply want more bang for their buck? Could apparently lower attrition rates be due to people living longer, indicating new members don't replace older ones and artificially make membership appear high? The latter might also contribute to lower activity as people age, perhaps shopping less in the places they shopped when younger (and were more mobile).