What’s happening to Loyalty in North America?
Everyone knows that America is the land of consumers. Capitalism has been its driving force for hundreds of years. It is only fitting then that a study of American consumer behavior in loyalty programs could prove very beneficial for any companies trying to stay contemporary and retain loyal customers. In America today there are over 3.8 billion loyalty memberships.
Of these, 42% are memberships in retail (groceries, drugstore, clothing retail, fuel and convenience stores). To break it down further, 142.4 million memberships in the U.S. fall under the grocery/supermarket subsector. Drugstore loyalty programs account for 279.1 million memberships, a growth of 4% since 2014. Within the retail sector (specialty retail programs – in beauty and apparel, computers and electronics, home improvement, home furnishings and fuel) account for 660.3 million memberships. Retailers in the fuel and convenience subsector saw membership numbers increase to a total of 43.7 million members – the smallest part of the overall loyalty pie, not just among retailers but also among all industries surveyed in the 2017 COLLOQUY Loyalty Census. Mass merchants saw a growth rate of 27% for a total of 206.6 million memberships.
Airlines, meanwhile, continue the shift to a revenue-based model from a mileage-based one, rewarding members based on the price of their ticket instead of the distance of the flight. Delta, United and American Airlines have all shifted to revenue models. And car-rental companies typically offer points-based programs, such as Hertz Gold Plus Rewards, National Car Rental’s Emerald Club and Avis Preferred. Starwood Hotels & Resorts offers SPG Moments, which provides exclusive cooking classes and access to red-carpet premieres, VIP food festivals and more. Hyatt just transitioned its Hyatt Gold Passport to the World of Hyatt, refreshing the program to offer a more tailored experience with basic membership along with three elite tiers.
The restaurant sector accounts for 125.6 million individual memberships. Of note is Starbucks Rewards, probably the most popular restaurant loyalty app, which allows customers to order ahead of the line. A handful of program types are classified as emerging or “other” platforms – online-only programs, entertainment, daily deals, point aggregators and card-linked offers. A total of 461.7 million loyalty program memberships are within this sector, which accounts for about 12% of all U.S. loyalty program memberships.
Overall, at 46% of memberships, retail claims the biggest piece of the loyalty pie in America, but with half of the 3.8 billion loyalty memberships being inactive, the retail sector still has to take stock and reinvent the idea of brand loyalty to truly make costumers come back again and again to their store and not just follow the cheapest prices.