As businesses and high-street retailers join the race to reinvent themselves, an analysis of consumer loyalty trends in Britain over the four years since 2009 shows that the days of pleasure shopping and retail therapy are behind us - as bargain hunting and rampant discounting have become the norm in a tough economy. Today, consumers want instant rewards, and (42%) prefer to receive offers whilst they shop - with more than a third of consumers (37%) happy to receive general offers rather than rewards tailored to their shopping habits.
Sustained economic uncertainty (over the four years) has created the 'promiscuous consumer', who displays no obvious loyalty, instead choosing to shop around for the best bargains and, quite often, holding multiple loyalty scheme memberships. Today, over three quarters of consumers subscribe to loyalty schemes. The uptake of additional loyalty schemes among existing members has been strongest for online voucher discount organisations (consumers are members of almost two schemes on average), although satisfaction with these types of schemes is amongst the lowest.
The Technology Enabled Social Consumer
In 2009, more than 50% of the public was not an online customer of any business. Today, online shopping is more popular in the UK than in any other country in the world, with British consumers now spending an average of $1,718 (£1,083) a year (according to data from Ofcom). Moreover, nearly one in six (16%) of Brits admit to openly using their mobile phone to check product details, prices and reviews while shopping in-store. In fact, one in ten consumers have requested loyalty scheme offers on their mobile phones, and over one in ten have received them on their devices.
2012 also saw a new breed of social consumers, willing to explore brand engagement via social channels. Over a fifth (22%) of Brits visited the Facebook site of a company to which they are loyal, while only 8% have followed a company they feel loyal to on Twitter. Just under a tenth (9%) of adults in Britain have received a loyalty offer via a social networking site.
Who Will Lead the Loyalty League Tables in 2013?
While banks/building societies and supermarkets have commanded a sense of loyalty from customers, there is a clear shift in consumer perception of loyalty programmes and how they would like to engage with businesses. For long term customer retention, merchants need to revisit their approach to customer interaction to be able to turn the tide on the promiscuous consumer and their affinity to instant rewards.