Loyalty cards not a substitute for the basics

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By: Wise Marketer Staff |

Posted on January 20, 2004

Loyalty cards not a substitute for the basics

Loyalty cards are just one element of the overall shopping experience, rather than the prime reason for choosing a particular store, while factors such as price, quality, service, and convenience contribute more to fostering loyal shoppers, according to consumer research in the UK from food industry research firm, IGD.

According to IGD, loyalty cards are not a substitute for getting the basics right but they do add value to the retail proposition. The firm's research showed that:

  • 52% of shoppers have and regularly use a loyalty card.
  • 10% of shoppers have a card but don't use it, or use it rarely.
  • 38% of shoppers do not have a loyalty card.

Consumer benefits IGD says that the benefit of loyalty cards to shoppers is twofold: direct and indirect. Direct benefits are typically one of two types, being either price reductions or added value rewards such as flights or days out. Indirect benefits are less tangible, relating to the collection of, and response to, consumer data by retailers and suppliers to ensure that the products and services provided meet customers' needs. But shoppers are less likely to consider these benefits (for example, improved sales forecasting which improves store efficiency, and the resultant cost savings that are then passed on to the shopper through lower prices).

For the majority of card users the card itself was not the key driver in store choice, and shoppers consider it as a "nice to have" extra for their shopping trips. Those that said they use them regularly also said they see a clear value in doing so. Non-users of loyalty cards, however, expressed a number of reasons for not doing so, and IGD suggests that loyalty card users are no more likely than non-users to shop at one particular supermarket.

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