The rise of loyalty programs amidst cost-of-living pressures

Nearly every Australian (95 per cent) is a member of one or more loyalty programs, according to research by Pureprofile and The Retail Doctor Group.

The research showed that 83 per cent of Australian consumers are loyal to their preferred retailers, with 18 per cent reporting increased loyalty program usage over the past year.

Anastasia Lloyd-Wallis, COO of The Retail Doctor Group, said Australia currently finds itself in a unique economic situation and it is interesting to see how consumers are responding.

“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.”

Of the 1000 respondents to the research, 45 per cent 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.

“It is also important that loyalty programs are not a one-size-fits-all solution to consumer behaviour. 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 disloyalty across takeaway food was that 51 per cent of customers were keen to try something new and in grocery, 63 per cent sought the cheapest option.

Martin Filz, CEO of Pureprofile, said the list of Australia’s most popular loyalty programs lends real insight into the country’s priorities.

“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. 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.”

Australia’s top loyalty programs are Everyday Rewards, Flybuys, McDonald’s MyMacca’s Rewards, Dan Murphys, and Qantas Frequent Flyer.

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