Loyalty clubs see major boost from member-only offers

The launch of member-only offers is driving a huge take-up of loyalty programmes, with nearly two-thirds (64%) of shoppers admitting they have joined a scheme to take advantage of the lower prices.

Tesco was first out of the traps with Clubcard Prices, which launched in 2019 but has since been followed by Sainsbury’s, Morrisons, Boots, and the Co-op which have also set up similar offers available exclusively for loyalty club members.

That is just one of the key findings of new research conducted into UK consumer habits by digital product agency Future Platforms, which also shows Asda Rewards, the programme which rolled out across the UK in August last year, is already one of the nation’s top three loyalty schemes, with 12% of respondents choosing it as their favourite.

Tesco’s Clubcard loyalty programme – which launched in 1995 – is the nation’s favourite, with over a third of respondents (35%) naming it as their top pick, ahead of Sainsbury’s Nectar programme, which launched in 2002, with 17%.

“The Digital Loyalty Index”, a study of 1,000 UK consumers, also highlights the significant influence of digital loyalty schemes on consumer behaviour and purchasing decisions.

This study reveals the winners and losers of this new battleground and shows how retailers and other brands can harness loyalty schemes to gain competitive advantage.

Future Platforms joint managing director Remy Brooks said: “Our research supports the theory that loyalty programmes can be used as a key way to change consumer behaviour. Over 60% of respondents admitted to trying something new because of loyalty programme incentives, demonstrating the significant impact these schemes can have.”

Of the respondents who tried something new, over 60% said that they continued using the product or service occasionally or frequently due to liking it. A further 38% continued because the product or service was discounted, and less than 2% reported they did not continue to buy the product or use the service.

Interestingly, immediate benefits seem to be a significant draw for consumers when signing up for loyalty programmes. The study found that over a third of respondents received an immediate benefit upon signing up.

While the study shows that grocery brands dominate when it comes to the most popular loyalty programmes, Boots is in the number four slot, with 10% of respondents choosing it, while Amazon (and its Prime offering) comes out at number five, with 7% selecting it.

Another relatively new loyalty programme, Lidl Plus, is in sixth, followed by Costa Club, Marks & Spencer Sparks, Co-op and Morrisons More Card.

The research reflects the increasing dominance of mobile loyalty, with 90% of consumers saying they now engage with loyalty programmes through mobile apps, ahead of 63% who use more traditional loyalty cards, and 47% who engage via web channels.

The study also shows that today’s customers have a transactional view of loyalty programmes, and that tangible benefits have a big impact, with 77% of respondents saying they are motivated to change their behaviour by benefits such as free items or money off their shopping, and 56% saying that knowing that they would save money or get discounts was a key driver for joining a new programme.

Loyalty also has the power to shape new habits among consumers, with 46% of respondents saying that a loyalty programme has led them to try a product they hadn’t tried before, and 22% saying it has prompted them to try a new service.
These new behaviours are often repeated, with 98% of those who have tried a new product or service because of a loyalty programme saying they have continued to use it (and 60% doing this simply “because I like it”).

However, the study emphasises the need to make loyalty schemes simple and predictable, with 45% of respondents saying ease of joining was the biggest factor in encouraging them to sign up for a programme.

When it comes to their favourite loyalty scheme, 84% of respondents say that they have a “good” or “excellent” understanding of the programme.

Future Platforms product manager Katherine Robinson Hodges added: “Brands who want to create a successful loyalty scheme need to get the basics right – offering a mobile app and keeping the sign-up process and programme simple and predictable. It’s also essential to give customers tangible value, by offering benefits such as member-only prices or free items.

“Savvy brands also recognise that their loyalty programme has the potential to drive new habits among customers, and they know how to harness this opportunity in order to encourage the trial of new products and services.”