Profitable customer loyalty has always been a coveted destination for retailers. Since launching The PDI Road to Rewards Report in 2015, investment in loyalty rewards programs within the U.S. has risen, along with consumer appetite for earning everyday rewards that are convenient and flexible, especially those offering fuel savings. What’s also changed is how consumers interact with retailers and brands on digital channels, as well as their attitudes toward technology.
Today, consumers prefer using mobile apps for tracking and redeeming rewards, compared to 2016, when websites were consumers’ preferred method. Our 2019 survey data identified key priorities for retail loyalty programs, including recruiting new members and keeping them for the long haul. But it also revealed a disconnect between the reward types offered by some retailers and what consumers want.
Now in its fourth edition and offered as a companion to the 2019 C-Store Shopper Report, this year’s Road to Rewards Report includes coverage of national retailers, grocers, CPG brands and c-store operators within the United States for the first time. It also examines consumers and those who belong to at least one loyalty program. By examining both retailer and consumer needs, the 2019 report provides a more comprehensive view of the retail loyalty landscape and what’s driving consumer behaviors today.
In addition to exploring consumers’ preferred rewards currencies and methods of communication, this year’s research revealed retailers’ current business challenges: from finding and retaining talented staff to driving down costs, increasing revenues, and having a better overall understanding of their customers. But the study also uncovered retailer concerns such as decreasing store visits due to the rise of the digital consumer.
The trend lines are clear: rewards programs that leverage loyalty currencies with universal appeal
and offer everyday value can help retailers compete as well as fast-track them on the road to loyalty success. And the most successful retailers are those who fully utilize customer data combined with industry-specific marketing and loyalty technologies.
Ultimately, this year’s Road to Rewards Report illustrates how retailers and brands can meet consumer needs and drive profitable customer behaviors. Both are central to the growth of their businesses and the health of their loyalty programs.
The Customer Data Struggle is Real
While data can help address “decreasing store visits” and “attracting new customers”– two of retailers’ biggest challenges – some retailers make better use of customer data than others. Forty percent of retailers consider “decreasing store visits due to the rise of the digital consumer” as their biggest external challenge, while 38 percent consider attracting new customers as their number one priority for the loyalty program.
For those with loyalty programs, 75 percent collect consumer data. But this leaves 25 percent of retailers not collecting or leveraging any customer information generated through their loyalty program.
Only 34 percent use customer data to find new customers with similar qualities to existing program members. And of this group, its predominately national retailers (39 percent) and grocers (38 percent) that use data to identify new customers.
Businesses are looking to find new customers with similar qualities as their existing
loyalty program members.
Retailers and brands with loyalty programs are using customer data to encourage greater participation (61 percent), led by national retailers (62 percent) and convenience stores (53 percent).
A further 46 percent of retailers use customer data specifically to develop customized offers and promotions, with national retailers (51 percent) leading the way. Another 45 percent use data to personalize messaging, with CPG brands leading at 55 percent.
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