Brits not loyal with their loyalty cards

Posted by Kelly Luff in Personal Finance on 7 December 2016 - Kelly is a Marketing Executive at checkmyfile

Loyalty cards have been much-maligned in recent years, with many of the most popular gradually reducing their offers to customers. But us Brits are still happy to sign up for them and carry them about, according to new research.

According to market researchers Nielsen, 89% of British consumers belong to at least one loyalty scheme, with each of those holding an average of 3.6 loyalty cards in their wallets. This rate is only bettered in Japan and Lithuania.

But while we might walk around with the cards, they seem to be “just in case”, rather than a reflection of the shops we’ll actually use the most. Engagement with retailers whose loyalty scheme they were part of was found to be the lowest in the world, apart from Denmark, showing that we really aren’t very loyal at all.

"This suggests Britons simply like the idea of signing up rather than actually using them - a 'tick-box' exercise - but the schemes are not personalised enough to keep them engaged," said Mike Watkins of Nielsen.

"The result being UK retail is drowning in a sea of loyalty cards."

Loyalty can depend on the brand – for instance Waitrose have a very successful loyalty scheme for customers. But even this popularity can cause problems for a retailer, with Waitrose customers finding that what they might describe as “unsavoury sorts” were taking advantage of a free Waitrose coffee (a Waitrose card perk) and loitering around the café, with no intention of spending money in the shop. The cheek!

Whilst we might think that these retailers are just dying to give us discounted shopping or cashback incentives, loyalty cards are in fact used by retailers to follow our buying habits and market to us using the data they gather.

Using our loyalty card sign ups, retailers can see what we buy, when we buy it and how we do so. Armed with all of this information, they can then make choices about the offers shown to us – an invaluable source of data for retailers who compete more than ever in crowded markets.

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