Loyalty Programs Can Impact Shoppers’ Decisions

As the holiday shopping season appears just around the corner, it’s a good time for brand marketers to learn what motivates customers. According to the Berkeley Research Group’s recent 2016 Holiday Retail Outlook report, loyalty programs can have a major impact on where consumers decide to shop.

According to the report, loyalty programs can be impactful on shoppers’ decisions of where to shop, and that impact varies by age group and retailer type.

Millennials and Gen X shoppers are more likely to be influenced by retailer loyalty programs. Among various retail segments, loyalty programs seem to have the highest impact for mass merchandisers, department stores, and consumer electronics retailers.

Berkeley Research Group (BRG) surveyed 1,026 adults (506 men and 520 women 18 years of age and older.) The was fielded to a demographically representative U.S. sample of adult shoppers and was conducted June 23-26, 2016.

“Retailers have been facing a new and more challenging environment in recent years,” said Managing Director Keith Jelinek, a leader of BRG’s Retail Performance Improvement practice. “The convergence of five major trends—value shopping, channel shift, technology, mobility/delivery, and the rise of Millennial spending power—has had a dramatic impact on the landscape.”

Here are some other key findings from the report:

Personal Financial Situation
49% of consumers feel good about their financial situation; 30% are neutral and 20% do not feel good.
Younger generations’ sentiment is in line with older consumers (i.e., Baby Boomers).

Holiday Spending Expectations
76% of consumers expect to spend the same or less on holiday gifts in 2016; just 15% say they’ll spend more.
Among those expecting to spend less, 30% cite rising household expenses as the reason, 27% say that their income has gone down, and 25% say they have too much debt.

Online Shopping
88% of shoppers have made an online purchase within the past year.
More than 90% of Millennials and Gen X consumers have shopped online, compared to 84% among Boomers.
42% of online shoppers indicate their online spending has increased in the last 12 months, with just 13% reporting a decrease.
49% of Millennials say their spending has increased, compared to 34% of Baby Boomers shopping online.
For those spending less online in the past year, delivery costs are the biggest issue.

In-Store Shopping
While the impact of online shopping is obvious, few shoppers say that they avoid visits to physical stores—just 11% say they rarely or never shop in-store.
Younger consumers also visit physical stores more frequently than older shoppers.
When asked which is more important when shopping in-store, service or convenience, 64% cited convenience (being able to get in and out of the store quickly).

Localization
Nearly 70% find it important that stores carry assortments that cater to the local community.

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