Almost all Canadians use loyalty programmes
The customer loyalty market in Canada is nearing saturation point, according to research from Colloquy, which found that 93.6% of consumers nationwide participate in at least one loyalty scheme.
The high level of consumer participation actually reflects a 9% increase since the market was last studied in 2007.
Loyalty programme activity across all demographic segments had increased, except for the Affluent consumer segment which remained flat at 96%. Participation by Millennials (aged 18-25) increased sharply to 86.5% (up 11% since 2007), making this the fastest growing demographic in terms of participation in loyalty programmes. Women and Seniors also increased their participation rate slightly, and consumers in French Quebec (measured for the first time) reached 92.4% participation.
The study examined trends in six consumer segments:
- General Population (representing a statistically distributed sample of Canada overall);
- Affluent (heads of households with an annual income of Can$125,000 or greater);
- Millennials or Young Adults (aged 18 - 25);
- Seniors (aged 60 or older);
- Core Women (females aged 25 - 49, with an annual income between Can$50,000 and Can$125,000);
- French Quebec.
Coalition loyalty programmes (such as Air Miles in Canada, Dotz in Brazil, Nectar in the UK, and Fly Buys in Australia) are proving to be vital tools for consumers who want to stretch their household budgets in response to a more challenging economy.
About one-quarter (25.8%) of respondents said that participation in coalition programmes has become more important to them since the economy started declining. Specifically, consumers said they found the value of coalition programme participation during the recession to be greater than sector-specific retail, financial services or travel rewards programmes.
"We were already aware that Canada was a congested loyalty arena," said Colloquy's editorial director, Rick Ferguson. "But to see a nearly 10% jump in such a market suggests that consumers are turning to rewards programmes more than ever befoire to help offset economic woes."
Loyalty participation by Millennials has grown faster than any other demographic, with an 86.5% participation rate. In comparison, the same demographic in the United States reported only a 58% participation rate.
The study revealed several intriguing facts about this group in particular, as well as their perceptions of loyalty programmes. For example:
- Millennials lead all demographics in their views on the importance of coalition rewards programmes during an economic downturn. More than one-third (35%) find coalition programmes more important due to the recession.
- Millennials are the group most likely to shift their rewards redemptions to necessities due to the down economy. More than 20% said that they shift from using points for luxuries or a saving strategy to necessities.
"Loyalty marketers have an opportunity to demonstrate programme value to this next generation of consumers. Proving a value proposition at a time when the group needs it the most could prove priceless in fostering lifelong advocates," concluded Colloquy partner, Kelly Hlavinka.
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