More Aussies taking advantage of loyalty programs

Inside Small Business

12th Mar 2024

New research conducted by global data and insights company Pureprofile and retail advisory firm Retail Doctor Group has found that 95 per cent of Australian consumers are members of one or more loyalty programs with 18 per cent reporting increased loyalty program usage over the past year.

In addition, the research highlighted that 83 per cent of Australian consumers are loyal to their preferred retailers, with 30 per cent paying for a program such as Amazon Prime or One Pass. And 45 per cent also said that a loyalty program would make them visit a retailer more often, and 27 per cent said a program would encourage them to spend more at said retailer.

“Australia currently finds itself in a unique economic situation and it is interesting to see how consumers are responding,” Anastasia Lloyd-Wallis, COO of The Retail Doctor Group, said. “The research has uncovered that loyalty programs weigh heavily when it comes to purchasing behaviour but that consumers have demands when it comes to these programs. They want personalisation, systems have to be easy to use, and they want to see their loyalty rewarded quicker – in fact, access to special discounts was the most important consumer consideration with these programs.

“It is also important that loyalty programs are not a one-size-fits-all solution to consumer behaviour,” Lloyd-Wallis added. “The effect of programs decreases with age, with 70 per cent of Gen Z and Millennials reporting being influenced, but only 35 per cent of those aged 65+ reporting the same.”

The top reason for loyalty across the fashion (77 per cent), homewares (63 per cent), and takeaway food (41 per cent) categories was because consumers liked the look and feel of a brand or a retailer. In the case of the grocery category, which was the category that reported the highest levels of loyalty, 60 per cent stayed loyal purely because they were a member of a loyalty program.

Conversely, the top reason for disloyalty across the fashion (51 per cent) and homewares (54 per cent) categories was because consumers followed a sale. With takeaway food, 51 per cent of consumers were keen to try something new, while 63 per cent sought the cheapest option for groceries.

The research also revealed that Australia’s favourite loyalty programs are Everyday Rewards, Flybuys, McDonald’s MyMacca’s Rewards, Dan Murphys and Qantas Frequent Flyer.

“The list of Australia’s most popular loyalty programs lends real insight into the country’s priorities,” Martin Filz, CEO of Pureprofile commented. “Groceries are a clear and consistent focus, followed by affordable treats such as drive-through meals and larger ticket items such as travel.

“While loyalty programs are a key influencer when it comes to purchasing behaviour, consumers report that connection to a brand is the most important driver of loyalty, even more so than price,” Filz added. “So, retailers need to think holistically about the customer experience, from fantastic in-store experiences to personable staff interactions and frictionless online journeys. Every touch point is an opportunity to win or keep loyalty which is of paramount importance in the current environment.”

This story was originally published on Inside Small Business.