With Sainsbury’s, Morrisons, and Co-op following Tesco’s lead in launching discounted prices exclusively for loyalty scheme members, the popularity of these programmes has risen among price-conscious shoppers, according to new research.
However, while consumers are flocking to sign up to access member-only offers, there remains shopper concern about the use of their data and the fairness of a dual-pricing system.
Research of over 1,000 shoppers by the Retail Technology Show (RTS) revealed that 73% feel loyalty prices are an effective way to encourage them to sign up as a member.
As household budgets remain squeezed by ongoing cost-of-living pressures, over half (54%) had started shopping with a retailer because of the discounts offered to cardholders, while a quarter (23%) now say they won’t shop with retailers not offering ‘dual-pricing’ for loyalty members.
And this adoption has seen retailer loyalty scheme sign-ups grow exponentially; since introducing ClubCard prices in 2020, Tesco has grown its loyalty programme from 14 million to 21 million users, while Sainsbury’s saw sign-ups of 1 million new customers between the launch of Nectar Prices (April 2023) and July of last year.
Whilst being drawn in by the prospect of significant discounts, consumers remain savvy that by opting into loyalty programmes, their data will be used by retailers; three quarters (73%) felt loyalty scheme prices are an effective way of growing marketing data. However, that didn’t stop some shoppers from trying to play the system; almost three in ten (28%) had taken a loyalty card to the checkout to get membership deals but then didn’t register the card afterwards.
Matt Bradley, event director at the Retail Technology Show, commented: “Consistently our annual consumer polls show that, in general, shoppers don’t mind giving up their data, if there is a value exchange. With many cost-of-living shoppers trying to make squeezed household budgets work harder, the prospect of immediate discounts is a tangible benefit.
“However, shoppers are increasingly aware of just how valuable their data is to retailers. That means, in order to keep customers satisfied that the value exchange is sufficient, retailers need to think about how they can use that data to further personalise promotions to make loyalty experiences all the more compelling.”
NAM Implications:
- Given that shopper purchasing date can be more valuable than the contents of their basket…
- …retailers will be anxious to keep shoppers ‘in the Club’.
- And enhancing the shopping experience whilst building trust will optimise the relationship.
- A situation where any mishandling of the data could jeopardise all…
