Colloquy's latest census research shows that across-the-board Retail loyalty program memberships now number 701 million, representing 39% of the U.S. loyalty market. That compares to 556 million in Travel-Hospitality, [image-nocss] which includes airline, hotel, gaming, car rental and cruise programs, representing 31% of the market, and Financial Services credit card programs at 422 million for 23% of the market. The 2009 Colloquy Loyalty Census measured the scope of U.S. loyalty marketing in 2007 and 2008.
A loyalty marketing program recognizes and rewards the best customers of a business. The complete 2009 Colloquy Loyalty Census covers 13 industry sectors. The Census tabulates program memberships, not unique individuals. Colloquy's 2009 measurement shows that total membership in U.S. loyalty reward programs is 1.8 billion.
Based on the 2009 Colloquy Loyalty Census, Retail sector reward program membership roles are as follows:
Specialty Retail, 191.3 million. Grocery, 153.3 million. Mass Merchants, 124.8 million. Department Stores, 92.8 million. Drug Stores, 73.9 million. Fuel-Convenience Stores, 51.2 million. Restaurant, 13.7 million. "In our 2007 Loyalty Census white paper, we predicted the next loyalty battleground would be in Retail... With the Travel category in maturity and the Financial Services category likely to contract, we expect retailers to be at the forefront of innovative loyalty marketing for years to come," said Colloquy Partner Kelly Hlavinka, who co-authored the white paper about the 2009 Colloquy Loyalty Census with Colloquy editorial director Rick Ferguson.
"The current economic climate may spell short-term doom for many venerable Specialty Retail brands but in terms of loyalty marketing, Specialty Retail had a great couple of years since our last Census predicted double-digit growth," said Ferguson. "Using multi-tender vehicles, private-label or co-branded credit cards, Specialty Retailers are fighting back against Wal-Mart and other mass merchant discounters by using loyalty offerings to build emotional bonds with their best customers."
In other key Retail sector findings from the 2009 Colloquy Loyalty Census study, white paper authors Hlavinka and Ferguson wrote:
Grocery's 153.3 million membership count represents a 23% increase since the 2007 Loyalty Census, as the shift away from two-tiered pricing and toward promotional currency continues. Wal-Mart remains the dominant U.S. grocer, though grocers big and small are fighting back with a renewed emphasis on shopper data and customer centricity. Colloquy predicts a spike in loyalty program activity.
In the short term, department store investment in loyalty programs will suffer, mainly because most still are tied to store credit cards and those portfolios are in dire shape. Once the recovery begins, the smart players will exhibit renewed focus on improving the customer experience, and that focus will depend on effective use of shopper data.
Colloquy is quite bullish about the drug store sector, despite the economy. While most retailers are experiencing double-digit sales declines, retail pharmacy sales increased 1.5% last year. Drug store operators have consolidated and now realize that the loyalty program is the best device for tracking individual behavior.
Cincinnati-based Colloquy is a provider of loyalty marketing publishing, education and research. Colloquy provides a full report on its 2009 census-taking in a free white paper, "The Big Sort: The 2009 Colloquy Loyalty Census," at www.colloquy.com/whitepapers.
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