Study: Retail loyalty programs in Canada
Market research firm Mintel has released the results of a recent study of retail loyalty programs in Canada. According to the study, while 98% of consumers with a household income of $150,000 or higher belong to a loyalty program, only 86% of consumers with incomes below $50,000 have such a membership. The overall Canadian average for participation in a retail loyalty program is 91%, with drugstores and supermarkets the most popular operators of these programs. The most commonly cited reason for joining a loyalty program was to receive discounts on products and services. Sixty percent of respondents said they had no interest in joining a loyalty program that has a membership fee.
"Loyalty programs prove to be effective at increasing engagement among consumers, but there is potential to target less affluent consumers who may be skeptical of the actual cost savings they will gain," said Carol Wong-Li, lifestyles and leisure analyst at Mintel. "While the quest for better deals outweighs the potential benefits of loyalty programs for some lower income consumers, the lower likelihood of participation is a missed opportunity for staple retail categories such as grocery. Less affluent consumers may have a perception that loyalty programs cost money, require purchases of multiple items or do not necessarily offer the best value, indicating retailers need to better communicate the benefits of joining such programs, especially if the programs are free to join and rewards can be earned with single purchases."