Bringing Genuine Loyalty to Loyalty Programs

Nearly third of consumers worried about safety of personal information


CHICAGO -- Enrollment in loyalty programs is on the rise across all retail categories, but soaring participation in retailer loyalty programs does not necessarily translate to "genuine" loyalty and relevant communications are increasingly essential in loyalty engagement; however, recent Mintel research finds that consumers are also concerned about privacy when weighing whether to sign up for a loyalty program.

Approximately one-third of Americans (32%) believe that the privacy of their personal information is an important attribute of a loyalty program.

Moreover, more than one in 10 loyalty members (13%) express frustration or dissatisfaction with too much personal information being requested during program enrollment, as well as a lack of control over the privacy of their information (10%).

"Reassurance of privacy is undoubtedly a key strategic tool in loyalty program engagement, but there is a paradox at play here between personalization and privacy," said Ika Erwina, retail and technology analyst at Mintel, Chicago. "Ironically, even though loyalty program members crave a more personalized, relevant experience, they also show concern about sharing the information required to enable the retailer to deliver on this desire."

In fact, some 16% of retailer loyalty program participants believe that their loyalty programs are less tailored toward their shopping habits, and this is especially true for Millennials (20%).

"Age is strongly related to the type of loyalty program in which people belong. While supermarket loyalty program memberships are likely to be cited by individuals aged 35 and older, 18-to-34-year olds tend to enroll in foodservice, mass merchandiser, online retailer, convenience stores or fuel, or dollar discount store programs. Club store memberships are also popular among younger age groups," said Erwina. "Given Millennials' strong propensity toward environmental and social responsibility, retailers may need to incorporate social issues into the program to improve awareness and participation."

So what makes a loyalty program especially attractive to consumers? Ease of redeeming rewards (55%), ease of earning points (51%) and monetary rewards (51%) were all cited by consumers as being important. Meanwhile, 36% of Americans are drawn in by access to exclusive deals and coupons and 22% are looking for easy enrollment options.