Is consumer loyalty increasing or decreasing? Conflicting reports

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By: Kelly Shermach |

Posted on June 11, 2018

Recent research calls consumer loyalty stronger than ever. Or it announces a downward spiral. Which depends on what you read.

By Kelly Shermach

The bad news first

According to a study of six unnamed brands, Optimove notes decreasing repeat purchases from first-time buyers and diminishing repeat purchases overall. Its analysis included the activity of 7 million shoppers between 2014 and 2017.

Consumers who discovered a brand in 2014 were more likely to initiate second, third and fourth transactions with it than those who tried it in subsequent years. Each year, loyalty receded a bit more.

Optimove also found that younger consumers abandon their shopping carts more frequently than Baby Boomers.

It calls growing retail competition, advancing retail technology, swiftly tilting trends and Millennial purchase patterns accountable for declining customer loyalty.

It gets better

Hawk Incentives research proclaims Millennials belong to more loyalty programs than folks from older generations. The young ones champion prepaid and gift cards, physical and virtual, as rewards.

More than 1,500 American adults—645 of them Millennials—talked to Hawk Incentives about programs across industries. And Millennials' average membership in 6.5 programs with active participation in 4.2 made the generation stand out from the whole: 6.2 programs and 3.9 active.

In addition, 82% of Millennials said points redemption for currency on a prepaid or gift card—especially for airflines, retail or a gym—compelled them.

It seems fitting that clear monetary value in exchange for consumer loyalty resonates. This generation pushes for transparency and authenticity in everything from politics to food stuff. Speaking of which, Hawk Incentives also uncovered Millennials are more likely to belong to a food and beverage loyalty program than the total population: Millennials 46%, total survey base 36%.

Make it mobile

CodeBroker surveyed 1,287 consumers and learned that nearly 75% would engage more with loyalty programs that make rewards information mobile-friendly.

As it stands, 65% actively engage with fewer than half their programs and 41% with fewer than a quarter. Eighty-eight percent max out at five programs, so active participation is weak. CodeBroker says that syncs with program sponsor revelations, too.

Even though some of those surveyed balked at mobile apps that clutter and slow their handhelds, everyone wants easy digital access such as text message links, emails and mobile-first websites that don't require a login. They get proactive communications, stored profiles and instant recognition from brands across the spectrum. Their loyalty program sponsors should offer the same.

Learn and leverage consumer channel preferences

Consumers shared preferred loyalty program access points with CodeBroker. They also have opinions on how sponsors should communicate rewards updates, award expiration and promotions.

As all brands must, loyalty marketers improve engagement and have greater opportunity to increase consumer lifetime value with relevant, consistent messaging that prioritizes member preferences. A good primary indicator of channel preference is the enrollment channel.

In addition, savvy retail marketers can recycle some oldie-but-goodie recognition strategies, target promotions and rewards to best customers or emerging besties, and optimize customer service.

Kelly Shermach is a Reporter at The Wise Marketer.