Nearly 60% of global respondents said that loyalty programs were available where they shopped, and of those, 84% said they were more likely to visit those retailers, according to a new study by Nielsen.
“Retailers can reverse the impact of falling basket values and lower trip frequencies by better connecting with the unique needs of their shoppers,” Julie Currie, SVP global loyalty, Nielsen stated. “While the concept of loyalty is nothing new, we are seeing a significant surge in retailers — and particularly those in developing economies — investing in loyalty programs that give them valuable insight into how to better meet customer needs,” she said. “Savvy retailers are mining the data and looking for new and innovative ways to achieve the benefits most important to their customers.”
Nielsen found that, on average, more respondents claimed to be not loyal than completely loyal to brands, service providers and retailers. Most respondents said they were mostly loyal, or unlikely to switch brands or providers without significant incentives. Nielsen information shows that nearly one-quarter (24%) of global respondents claimed complete loyalty to mobile phone brands, mobile service providers and financial institutions, the highest percentages reported globally across the 16 categories measured. Global respondents reported the lowest levels of loyalty to food and beverage categories measured and online retailers. Approximately 40% of global consumers surveyed said they were not loyal and likely to switch brands in the alcoholic beverages (43%), snacks (39%), carbonated beverages (38%) and cereal (37%) categories. As many as 39% of global respondents said they were not loyal to online retailers.
“There is a strong link between the way consumers describe their loyalty habits and the way they subsequently buy — so even comparatively small shifts in what consumers say can manifest in big changes in what they do,” Currie saud. “While there is some consistency around the world in loyalty sentiment within categories and across retailers and service providers, there are also notable differences — especially for consumable products and in the online retailing space, where the likelihood to switch is greater," she said.
“In markets where loyalty programs are long established, customers tend to be savvy about copy-cat promotional offerings that don’t offer unique advantages,” Currie noted. “Particularly in developed loyalty markets, retailers and manufacturers need to work together to offer exclusive awards that cut through the clutter. New and innovative concepts, especially in the online space, that connect with how consumers want to shop are proving to be most effective.”
According to Nielsen’s survey, 75% of global respondents said that discounted or free products was the most valuable loyalty program benefit. As many as 41% of global respondents said getting a better price would encourage them to switch brands, service providers or retailers, followed by better quality (26%), a better service agreement (15%), better selection (10%) and better features (8%).
Enhanced customer service and free shipping incentives were important to 44% and 42% of global respondents, respectively.
Good customer service was important to more than half of respondents in Latin America (59%) and Asia-Pacific (53%). Exclusive deals (41%) and special shopping hours (36%) mattered most among loyalty program participants in Asia-Pacific. Free shipping incentives were important for 46% of North Americans.
North Americans surveyed reported higher levels of loyalty for financial service providers (29%) and carbonated beverages (23%), compared to other regions.
The Nielsen Global Survey of Loyalty Sentiment polled more than 29,000 Internet respondents in 58 countries to evaluate consumer views on loyalty levels across 16 categories including fast-moving consumer goods, technology products and retail establishments.