Loyalty trends in Canada
Loyalty is on the rise in Canada. The amount of Canadian loyalty memberships grew by 35% in 2016 which is almost double the growth of loyalty in the US (15%), although due to the smaller population the actual numbers seem smaller, with 175 million memberships in Canada and 3.8 billion memberships in the US at the close of 2016. Also, the average Canadian has at least 8 loyalty cards in his wallet. On the other hand, despite this growth, studies show that 32% of Canadians feel overwhelmed by the amount of loyalty programs available and 46% do not believe that loyalty programs are anything more than a marketing scheme.
Like most countries today, Canada also boasts a variety of loyalty programs. There are programs for retail, financial services, travel, and more. Retail and financial make up the majority of the loyalty membership pie at 51% and 19% respectively. American Eagle/Aerie as well as Urban Outfitters are stores which have developed well used rewards programs, where you get points for all your purchases, discounts on your birthday and perks like free shipping if you have spent a certain amount using your loyalty card.
However, one of the unique aspects of the Canadian loyalty market is the amount of coalition loyalty programs. Perhaps it’s because of the Canadian heritage of coalition giants like Air Miles, but people just seem to be more drawn these programs. 27.2 million Canadians belong to coalition programs with over a third of the population belonging to the Air Miles program, whereas in the States there are few coalitions and the market is just getting started. Canada has several very expansive coalitions like PC Optimum, MORE, and Canadian Tire Rewards. SCENE is a loyalty program which encompasses not only movie theater tickets, as well as purchases in the Cineplex cinemas, but also works with restaurants like Harvey’s and Swiss Chalet, and even sporting goods stores.
Perhaps, the main reason that coalitions are so successful in Canada is the fact that your points and bonuses become more quickly redeemable when you are already within a system of stores. The 2017 Colloquy study showed that one of the greatest factors affecting loyalty in the US and Canada was the speed with which one can redeem their points. In a coalition setting, this is much faster because you can gain points filling up your gas tank, and at then later that day use those points at the supermarket, whereas with other rewards programs you have to follow the conditions for a specific store, which vary and are just confusing to remember. Overall the Canadian’s love for coalitions has boosted the loyalty market, and it is moving the number of memberships higher and increasing their trust in the loyalty programs.