Bridging the Gap Between Loyalty & Consumer Behavior
WASHINGTON, D.C. — Loyalty membership does not necessarily spell loyal behavior for shoppers, according to a new report from digital marketplace provider Upside.
The "Loyalty Membership and Behavior" report, part one of a two-part Loyalty series from Upside, found more than half of consumers enrolled in a loyalty program base their shopping decisions — including where to shop, which items to purchase and how much to buy — on those programs.
Additionally, nearly 40% of loyalty members indicated that they would stop shopping at a specific location if the store terminated its loyalty program.
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"Consumers are actively seeking value, and retailers are wise to use tools like loyalty programs that don't cannibalize existing profits to address that need," said Upside CEO and cofounder Alex Kinnier. "These survey findings indicate that today's loyalty offerings have become table stakes for customers, and retailers have an opportunity to do things differently to get more out of their existing investment."
However, certain findings from the survey shine a light on unexpected loyalty shortcomings for convenience store and fuel retailers, grocery stores and restaurants. Varying based on buying category, insights from Upside's data indicate that:
- As many as half (41% to 51%) of respondents do not factor in a loyalty program when choosing where to buy.
- More than a third (33% to 46%) of respondents have not increased their purchasing frequency since joining a loyalty program.
- Almost two-thirds (58% to 63%) stated that the absence of a loyalty program at a store would not affect their shopping habits.
Consumers' indifference may stem from a myriad of factors, according to Upside, like:
- Loyalty proliferation: Comparing data from Upside's 2015 and 2023 "Bond Loyalty Reports," the average shopper has nearly doubled the number of loyalty memberships in their wallet over the past decade.
- Lack of differentiation: Loyalty programs have become increasingly similar to one another, hindering retailers from distinguishing themselves among customers.
"Loyalty Membership and Behavior" drew insights from a comprehensive survey of nearly 2,000 consumers. The full report is available here.
Part two of Upside's Loyalty series will dive deeper into the data on how to make loyalty programs more impactful.
Upside is a digital marketplace that connects millions of consumers with brick-and-mortar retailers nationwide. Since 2016, Upside's personalized offers have empowered individuals to gain greater purchasing power for their essential needs and helped businesses achieve measurable profits.