Retail Rewards and Loyalty Statistics

October 07, 2020

Retail Rewards and Loyalty Statistics

Rewards and Loyalty Data for Retailers

Spindy offers a rewards and loyalty app to retailers, so we are always on the lookout for data that helps support our value proposition. No matter what retail sector you are in, it’s likely that rewarding your customers and creating loyalty is of growing importance to your business success. The following data brings that importance into sharp focus. We thought having these statistics in one place might be useful for others as well. This data was originally compiled in October, 2020.

We’d love to hear your thoughts and please send us links to other data that complement this list. Note, we can’t vouch for the accuracy of this data. We have attempted to only list credible sources, but some of it comes from sources that have a vested interest in the results. We have attempted to link to the original source where-ever possible, so you can be the judge of the data’s credibility. Note, some of these links lead to PDF downloads.

Impact on Business Results:

  • 97% of American shoppers are looking for deals and 92% are “always” looking. (Source: 2017 Hawk Incentives, Aberdeen Research)
  • A 2018 study by Hawk Incentives found that reward-based promotions can generate more annual company revenue and greater profitability per customer. Companies surveyed report an average year-over-year revenue growth increase of 36 percent that can be attributed to reward-based promotions as opposed to 28 percent attributed to discounts. (Source: 2018 Hawk Incentives, Aberdeen Research)
  • Companies use reward-based promotions to elevate brand image. To create the impression of a premium brand image versus one that consistently discounts prices, 43 percent of companies surveyed consider using reward-based promotions. When directly competing with a rival on brand image, 44 percent of companies prefer to use reward-based promotions. (Source: 2018 Hawk Incentives, Aberdeen Research)
  • 73% of diners say restaurant tech improves their experience, and 95% of restaurateurs think it improves business efficiency. (Source: 2017 Study by Toast)
  • Increasing customer retention rates by 5%, increases profits by 25% to 95%. (Source: Harvard Business School)
  • Companies with strong loyalty marketing programs grow revenues 2.5 times faster than their competitors and generate 100-400% higher returns to shareholders (Source: HBR).
  • 69% of C-suite executives reported their loyalty investments have grown in the past two years, and 55% reported their investments will continue to grow in the next two years (Source: LoyaltyOne)

Loyalty Program Participation:

  • You should aim to get at least 15% penetration of your loyalty program in the first year. You need that level of participation to get staff educated about the program and get the program to be part of the organization's culture. Plus, the higher the penetration, customers are more likely to hear about it and observe it in action. (Source: Paytronix)
  • According to November 2018 polling by YouGov, 64% of US internet users are members of some type of loyalty program. Women (68%) were more likely to be members than men (59%), and chances of membership tended to rise with age and household income.
  • Data from Q3, 2019 study – “How to Engage Consumers Across Every Generation” (Source: CrowdTwist):
    • 71% of Gen X, 70% of Millennials, 63% of Baby Boomers, and 62% of Gen Z said a loyalty program influences their brand choices
    • 79% of Baby Boomers are active in at least one loyalty program
    • The top reasons consumers join loyalty programs are saving money and member-only perks
    • Millennials redeem rewards most often; 77% redeem at least once a quarter
    • The most popular reward across all generations are discounts, followed by free products
    • Gen Z are more likely to refer a friend and Millennials are more likely to write reviews
    • The younger the generation, the more interested they are in playing a game to earn points
  • Income doesn't matter: Deal-seeking behavior is not limited to those who need to stick to a budget, according to the survey. In fact, 86 percent of respondents reporting annual household earnings of $200,000 or more said that they look for deals. By comparison, 87 percent of respondents reporting annual household earnings of $20,000 to $39,000, and 85 percent of those with reported annual earnings between $100,000 and $149,000 also reported looking for deals. (Source: Hawk Incentives Research)

Consumer Perspective on Loyalty Program Value:

Earning rewards or loyalty points was valued most by Internet users 58.7% of respondents, second only to quick and easy checkout. (Source: iVend Retail/emarketer)

  • Globally, 70% of consumers are more likely to recommend brands with good loyalty programs, 77% are more likely to continue doing business with Brands who have a loyalty program, and 63% will modify their spend to maximize loyalty benefits. (Source: Bond, The Loyalty Report 2018)
  • Consumers are loyal to loyalty programs (Source: Criteo Shopper Story 2020):
    • 65% say they enjoy loyalty programs
    • 52% say that loyalty programs are the one reason they choose specific retailers or brands
    • 41% say loyalty programs make them feel like part of an exclusive group of valued customers
  • 85% of Americans feel “awesome” or “good” about themselves after a store notifies them of an earned cashback reward, even if the amount is relatively small. (Source: CGK)
  • 87% of North American retailers are planning to use gamification to engage customers in the next five years. 70% of the top 2000 companies are using it right now. (Source: Snipp.com)
  • 181% more retailers plan to use gamification within loyalty programs in five years. (Source: Snipp.com)
  • Nearly 75% of consumers say that they would actively engage with loyalty programs if they could access their rewards information from their smartphones. (Source: CodeBroker)
  • 89% of people are likely to recommend a brand after a positive brand experience on mobile. (Source: Google)
  • 57% of consumers want to engage with their loyalty programs via mobile devices, but 49% don’t know whether there is an app associated with their loyalty program. (Source: 2016 Bond Loyalty Report)

Consumer Response to Rewards:

  • When it comes to deciding whether or not to purchase from a retailer or brand, 93% of US shoppers cite “discounts and offers” as important factors. (Source: Criteo Shopper Story 2020)
  • 85% of Americans feel “awesome” or “good” about themselves after a store notifies them of an earned cashback reward, even if the amount is relatively small. ( CGK)
  • People who are referred by a friend are 4x more likely to buy from a business, and one offline word-of-mouth impression drives sales at least 5x more than a paid impression. 92 percent of people trust recommendations from family and friends more than all other forms of marketing. (Source: Data from MarTech, taken from Finextra.com)
  • US customers who are satisfied will share their positive experience with 11 different people. (Source: American Express)

With statistics like these, it’s no wonder loyalty and rewards programs are gaining so much momentum for the world’s leading retailers.

Thanks for reading our blog. Please don’t hesitate to reach out if you are interested in how spindy can help you strengthen your bond with your customers.

Stephen Condon 
@streamingguy

Contact spindy if you have questions or comments about this article.