The US retail sector, led in particular by specialty retailers, crocers, mass merchants and department stores, now accounts for the largest proportion of loyalty programme memberships, according to the 2009 Colloquy Loyalty Census.
The census study found that retail loyalty programme memberships in the US now number some 701 million, representing an estimated 39% of the country's loyalty market.
This compares favourably to 556 million for travel and hospitality (which includes airlines, hotels, gaming, car rental, and cruise programmes) which represents 31% of the market, and financial services credit card programmes at 422 million (23% of the market).
The census covered thirteen industry sectors and accounts for loyalty reward programme memberships, rather than unique individuals (so a single consumer who is a member of two programmes is counted twice, overall). The total number of memberships counted by the census was some 1.8 billion.
Looking at the retail market alone, the 2009 Colloquy Loyalty Census revealed the following figures for each sub-section of the sector:
- Specialty Retail 191.3 million;
- Grocery 153.3 million;
- Mass Merchants 124.8 million;
- Department Stores 92.8 million;
- Drug Stores 73.9 million;
- Fuel-Convenience 51.2 million;
- Restaurant 13.7 million.
"With the travel category in maturity and the financial services category being likely to contract, we expect retailers to be at the forefront of innovative loyalty marketing for years to come," said Colloquy partner Kelly Hlavinka, who co-authored the white paper with editorial director Rick Ferguson.
"The current economic climate may spell short-term doom for many venerable specialty retail brands but, in terms of loyalty marketing, specialty retail had a great few years since our last census predicted double-digit growth," added Ferguson.
Other key retail sector findings include:
- Grocery's 153.3 million membership count represents a 23% increase since the 2007 census, as the shift away from two-tiered pricing and toward promotional currency continues. Wal-Mart remains the dominant US grocer, though grocers big and small are fighting back with a renewed emphasis on shopper data and customer centricity. Colloquy predicts a spike in loyalty programme activity.
- In the short term, department store investment in loyalty programmes will suffer, mainly because most still are tied to store credit cards and those portfolios are in dire shape. Once the recovery begins, the smart players will exhibit renewed focus on improving the customer experience, and that focus will depend on effective use of shopper data.
- While most retailers are experiencing double-digit sales declines, retail pharmacy sales increased 1.5% in 2008. Drug store operators have consolidated and now realise that the loyalty programme is the best device for tracking individual behaviour.
The full white paper has been made available for free download from the Colloquy web site - click here (free registration required).