It seems shoppers are seeking rewards for everyday purchases such as gas and groceries in lieu of brand loyalty and convenience.
Nearly 70 percent of consumers surveyed by Points, a company that provides loyalty eCommerce and technology solutions to brands, said they would switch brands in order to earn points or frequent flyer miles on their purchases. In addition, shoppers would drive farther and make more individual purchases to accumulate the rewards.
More than 1,500 loyalty program members were surveyed during a week in February of this year on how and where they wanted to earn points or miles. The results overwhelmingly alluded to the importance of small shopping rewards in high frequencies.
The loyalty industry is worth $48 billion annually. In 2013, about 2.65 billion shoppers in the United States had loyalty membership accounts, according to a Colloquy estimate. Roughly 68 percent of consumers interviewed said earning points and miles on everyday purchases was their preference for collecting shopping rewards because not everyone has the money to spend on large purchases.
"The biggest competitive edge a retailer can have today is to offer rewards that their customer truly sees as valuable and worth collecting," said Tim Moulton, VP, points business solutions and business development. "Retailers large and small are starting up their own rewards programs, but consumers have only so much space in their minds and wallets…What they do want is the opportunity to turn their everyday purchases into extra ordinary rewards."
Frequent flyer miles and hotel points were the most coveted rewards by shoppers surveyed. "The promise of a free exotic vacation engages the imagination in a way that a smaller reward does not," Moulton said.
So how can retailers compete in this space? "The first way would be to offer rewards from the programs their customers are already collecting in," Mouton said, adding that programs need to be flexible and make sense for the brand.
Consumers also need to be rewarded frequently and in small amounts. "Points' report found that 66 percent of respondents felt that earning points/miles was important and meaningful even when it was only a handful at a time," Moulton said.
Finally, offers need to be personalized to the likes and shopping habits of the consumers.
"Retailers should seize the opportunity to better connect with their customers through rewards programs. There is a huge base of active members already collecting," Moulton said. "These consumers are ravenous for points and miles, and they aren't just earning on big-ticket purchases."
-See this Points report
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