Trends for the future of loyalty in the UK
Only 21% of British consumers surveyed by The Logic Group and Ipsos MORI like to receive offers from loyalty programmes via social networks or the mobile channel, while 40% actively prefer not to receive offers through such 'new technology' channels.
It seems that not a day goes by without the announcement of a new piece of technology to help consumers stay connected with their friends or favourite brands, whether it's to help them check products prices or simply to let their friends know where that are and what we're doing. While some consumers embrace these technological lifestyle changes, others are resistant to, and even fear interactions with, new technology channels.
The research questioned more than 2,000 adults and included online 'social listening' and online discussion groups, with the aim of finding out what consumers are thinking and feeling about customer loyalty in the near term. Almost half (46%) said they would prefer to receive offers from loyalty schemes while they were actually out shopping, and 47% said they would like to use a credit or debit card as a loyalty card instead of having to carry a dedicated plastic card for each programme membership.
For new technologies, perhaps not surprisingly, there is a marked difference in how open to adoption different generations are. When asked if they would like to receive loyalty scheme offers via new technology channels, significantly more consumers aged 15-24 and 25-34 agreed (33% and 29% respectively) than their older counterparts (at only 14%).
Similarly, disagreement was higher among consumers aged 45-54 (50%) and 55-64 (54%) compared to younger groups (32%). But when it came to preferring to use a credit or debit card as their loyalty card, agreement levels between the age groups were comparable.
"When it comes to developing loyalty schemes that involve new technologies, it really is vital to consider your target customers, and those businesses offering products or services used by older consumers should perhaps be more careful about the introduction of new technology channels as part of day-to-day scheme interactions," said Antony Jones, CEO for customer interactions specialist The Logic Group. "Encouragingly, the respondents showed interest in moving toward a scheme where they only need to use one card or device, perhaps pointing toward future technologies that create links between card accounts and loyalty scheme rewards, mobile apps, NFC and contactless technology."
While those surveyed recognised that new technology can fulfil the evolving needs of customers, not everyone is willing (or indeed able) to embrace these new technologies. For older respondents the key reservations were physical barriers (such as feeling they may be penalised for having out-of-date mobile devices), knowledge barriers, and of course a fear of the unknown, data security and being tracked without their consent.
Respondents in focus groups were asked about a number of new technologies including mobile and social, revealing some varied and interesting findings such as:
- Mobile technology This includes SMS offers, applying points or rewards when you purchase using your phone, using a loyalty app, and receiving offers direct to your mobile phone from nearby shops. Reactions to this technology were broadly positive. Some had seen and used mobile apps before and suggested that when implemented correctly they were the future of loyalty schemes - also linking this technology to their desire to reduce the number of the cards in their wallets. Texts and alerts to phones while shopping though could become annoying - and problematic in low signal areas.
- Social media This includes 'liking' or following a brand in order to receive new offers, which suggests that loyalty programme operators could be able to see what you are looking at and send you relevant offers. There were mixed reactions to this technology. Some already used social media and were happy with how it worked, while some voiced concerns about data security. They liked being able to sign up to a company and receive offers of relevance to them, and there was acknowledgement that both parties got something out of this relationship. However, data sharing and security issues were an overarching fear for all.
- The mobile wallet There were mixed reactions across all ages to the concept of a mobile wallet. Those who were most negative were worried about fraudulent use, inconvenience if lost, and being a greater target for theft. There was also some negativity toward the suggested £15 transaction limit, with suggestions that this could be increased by adding a pin to the transaction to make it more secure. More positively, people felt that this would be more convenient as a phone is always with you, and contactless technology would speed up the transaction.
"There is undoubtedly a consumer appetite for new technologies when the benefits are made clear (such as simplicity and immediacy), although uncertainty about the actual user experience still remains," concluded Simon Atkinson, assistant chief executive for Ipsos MORI. "Importantly, new technologies could make interacting with a loyalty scheme more convenient and make offers and information more easily accessible to consumers. For those who are worried about embracing technological changes, and the older generation in particular, the answer is likely to lie in offering existing services in tandem with new services."