The usage of Loyalty cards plummets as shoppers question value. In an interesting report released by global payments provider WorldPay the call from millions UK consumers who demand smoother, more relevant, engaging and better integrated shopping experiences. The need to make loyalty a unique process and integrate data driven marketing approaches continues to be put front and center. If brands do not make programs relevant to their audience, their “loyalty cards and till receipts as we know them may soon be a thing of the past”
WorldPay, in a new report released today that examined public attitudes for paying for goods and services, revealed that a staggering 8 million UK shoppers use their loyalty cards less than they did a year ago as increasing numbers lose patience with traditional schemes. It is quite different from the US, where participation rates in “engaged” programs have increased, yet the number of programs for which individual participate in total has dropped.
The value equation - The research shows as many as 1 in 3 consumers are failing to derive any value from their loyalty cards, with 30% of UK consumers finding it difficult to remember to take their loyalty card with them when shopping. Program offerings should be relevant and easy to use, even if the participant forgets his card the need for them to identify themselves in lane and online should be a priority for the merchants and brands.
The question of convenience and habits - The survey also found that 75% of shoppers would like loyalty schemes to be linked to their payment card to ensure that they are automatically rewarded for purchases, while 21% want loyalty cards to be stored on a smartphone payment app. Loyalty programs should be based on creating a sustainable behavioral change for their audience – based on a mutual value exchange, relevant and convenience. The need to integrate other payment technologies should be front and center.
There was significant importance in the value of convenience as the need to claim discounts and rewards easily and automatically is highlighted by the growth in popularity of cash back cards and other ancillary discount services. For example, Groupon is now used by 1 in 10 shoppers (11%) and credit card cash back schemes by more than 15%.
The question of relevant and need to listen. There also seems to be a growing challenge in the lack of technologies that are relevant to the individuals. There was great consumer desire for digital integration in their shopping experiences; the research also revealed traditional paper till receipts may soon be on their way out. Younger shoppers were especially interested to see old technologies fade away, with 26% of 16-24 year-olds wanting to receive vouchers through text and 21% through a mobile app instead. However, more than half of older consumers aged 25-64 would still prefer a paper voucher issued at the till instead. Loyalty, when focused on behavior should take the voice of the customer into consideration. The opportunity for relevance is quite high.
Insights from WorldPay - Ron Kalifa, Deputy Chairman at WorldPay stated,: "Our research shows that shoppers are starting to lose patience with loyalty schemes as expectations of the ease and speed of payments increase. With new legislation on interchange fees reducing the income card issuers have traditionally received, there's a clear commercial incentive for them to maximize the success of their promotions and engage retailers directly, rather than rely on cash back discounts. As well as developing the technology to better incorporate loyalty card payments, there is a role for payment service providers to play in brokering the relationship between retailers, publishers and card issuers. Loyalty cards provide vital business intelligence for retailers, and valuable savings for shoppers, so it's critical that they’re incorporated into the way consumers pay today."
The Opportunity - Even though we have seen a decline in the stated interest, the fact is that what is actually happening is somewhat different, as usage is still high. The survey found that despite usage declining, 9 in 10 consumers still use a loyalty card, with the most popular being the Tesco Clubcard (68%) followed by the Nectar card at 59% and Boots Advantage Card at 48%. If these brands make a more concerted effort to tailor the program in a unique manner, they will enable a more direct and beneficial relationship with their customers.
The full report entitled "Optimizing your Omni-Payments: consumers, payments and the future" can be viewed at www.worldpay.com/reports/omnipayments