In today’s retail market, in order to achieve superior growth, retailers need to do two things: retain their existing customers, at the same time as attracting new ones from rivals. This battle for market share, or share of wallet, is particularly pronounced as organic growth is thin on the ground. The issue for many players is that this is a buyer’s market. There is a proliferation of retail choice, offers and deals with far too little demand to go around. So how do retailers generate loyalty?
From our research it is clear that loyalty cards are popular among consumers, with almost 95% of shoppers owning at least one card. It is also clear that those retailers without loyalty cards or schemes could be at a disadvantage, with some 40% of consumers saying they would be less likely to use a shop that did not offer them. However, the relative ubiquity of loyalty cards, and the fact that many people own more than one, does raise an important question of just how critical they are at driving loyalty. How much do they really differentiate and make consumers select one retailer over another?
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