Canadian grocery shoppers love loyalty rewards programs! This according to a recent research study from Caddle that shows practically all Canadians use at least one type of loyalty reward program led by the PC Optimum card with 91% penetration. And with the cost of groceries continuing to rise, rewards programs will maintain their popularity with consumers who are seeking out value-based offers in order to stretch their weekly shopping budget.
For grocery retailers, the benefits of loyalty rewards programs are plentiful and include:
* Customer acquisition – According to the Caddle research study, loyalty programs rank second behind price on things Canadians consider when deciding where to shop. Moreover, 51% of shoppers state loyalty programs play a key role in choosing where to shop.
*Customer retention: Loyalty programs are highly beneficial to grocery retailers, bringing them repeat customers, larger basket sizes and higher customer lifetime value. In fact, if a retailer stopped their loyalty rewards program, 74% of shoppers would change their shopping habits by shopping at the store less frequently.
*Zero-party Data: Loyalty programs allow grocery retailers to capture historical purchase data that can be utilized to improve marketing strategy, to develop seamless online and in-store shopping experiences and to personalize messaging and offers to individual shoppers.
Finally, despite high consumer usage and satisfaction, retailers face two key challenges moving forward to ensure their loyalty rewards programs. First, shoppers want more personalized offers with 44% of Canadians stating more relevant offers would motivate them to use their loyalty rewards program. And second, shoppers want the ability to redeem loyalty points in more places than just the retailer stores.
It will be interesting to see how loyalty rewards programs evolve over the next 12-18 months. If you have a comment, please leave one. Until next time, thanks for reading.
Check out the full Caddle report on The Shifting Landscape of Consumer Loyalty by clicking here.
