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Consumers distrust retail loyalty programs, here’s why

Dan Slavin | May 16, 2017 115 views 1 Comment

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Credit: Kate Serbin

Credit: Kate Serbin

CodeBroker recently conducted an online survey to study how shoppers feel about their existing retail loyalty programs. Data was showing a downswing in usage, and we wanted to learn why shoppers were feeling frustrated. For the survey we only stipulated that participants be at least 18 years of age and located in the U.S. They also had to have some experience with loyalty schemes. We received over 1,200 responses from all age groups and income levels.

At heart is that shoppers want loyalty programs to go fully digital, which isn’t surprising considering how popular shopping is among Millennials, who want access to everything including their reward points, balances and offers, from their smartphones. Across all age groups, consumers dislike having to log-on to a website or even download an app, citing more usage of loyalty cards if they can avoid these things.

Problems of Traditional Retail Loyalty Cards and Programs

Our survey also found that the biggest consumer complaint with today’s loyalty programs is simply carrying the card itself — 43% said physical cards are the biggest obstacle to claiming rewards, while 17% cited that looking up a missing card is most annoying. And 15% said linking a card online is the biggest hassle of loyalty programs.

The report found other issues with loyalty programs:

• 24% use the rewards they earn
• 43% say rewards expire before they can be redeemed
• 38% say they never knew if they had rewards available
• 28% say they forget to bring paper rewards certificates to redeem
• 65% attempt to redeem a reward at POS and find it expired

Other areas of frustration came from 56% of shoppers who say they changed or abandoned a purchase when they realized their points had expired.

So what do shoppers want?

• 70% of shoppers say they would use a mobile version of their loyalty cards if they didn’t have to sign into a website or download an app.
• 71% say they would be more likely to use their loyalty cards if they could access these cards and rewards from their mobile phone.

Key Takeaways

Given the ubiquity of cellphones, we learned that consumers want to make their phones the hub of all transactions including the ability to exploit rewards, digital coupons, discounts and other shopping incentives.

Converting loyalty programs to a digital, mobile platform will resolve many of these issues and improve the customer experience.

Shoppers want easy access to their card, status, and rewards – they want to eliminate the clunky plastic cards from key fobs and wallets – and using a mobile app is the answer for some consumers.

For many retailers, offering incentives is a proven way to get consumers through the doors. Now it’s just a matter of going fully digital to fully maximize the return on their loyalty investment.

You can access the full survey results and information on consumers’ preferred delivery channels, by downloading the CodeBroker 2017 Shopper Loyalty Survey.

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One Response to Consumers distrust retail loyalty programs, here’s why

  1. Thomas Wieberneit May 25, 2017 at 11:00 am (217 comments) #

    Dan, did you also ask whether the customers felt they get added value apart from the discount orientation that you cite above out of the loyalty program? Or are people (trained to) only think in monetary rewards?

    Thomas
    @twieberneit

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