Customers are falling out of love with loyalty cards, according to a new study by TCC Global.
It found only 6% of shoppers said that they would stop shopping at stores that no longer offered a loyalty card, suggesting they are no longer a “game-changer”.
The report also suggested shoppers own many more cards than they actually use.
On average, UK shoppers have 4.6 cards in their wallets, but only use 2.8.
The study found the most popular loyalty cards were provided by Tesco and Sainsbury’s: 80% of shoppers own a Clubcard, while 68% own a Nectar card.
Bryan Roberts, global insights director at TCC Global, said: “Loyalty cards can absolutely be an effective way of creating a thread of loyalty between retailer and shopper, but it seems increasingly clear that they are losing a degree of efficacy in this regard. With so many shoppers sitting on unused loyalty cards and accumulated points, and with many retailers scaling back the benefits of loyalty scheme membership, it is becoming evident that loyalty cards are not quite the potential game-changer that they used to be.”
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The study, based on in-depth interviews from a nationally representative sample of 1,000 grocery shoppers across the UK, found discounters Aldi and Lidl had the most loyal customers, which it said raised questions about the scale of the battle Tesco would face if it launched a budget chain.
Aldi and Lidl came first and second respectively, while Tesco trailed in seventh.
The study found 5.2% of UK shoppers have switched into a discounter, meaning that 21% of Brits now do their main weekly shop at a limited assortment grocer.
“These discounters are squeezing the rest of the grocery market, and it’s bad news for the big four because shoppers aren’t just shopping at Aldi and Lidl because they’re cheap,” said Roberts.
“Aldi and Lidl’s brutal efficiency, loyal shopper base and huge appetite for new stores, has put the big four in an increasingly difficult position. This has prompted the ongoing consolidation in the sector as well as counter-measures in range, private label and pricing.
“This could come as a shock to Tesco as they launch their own discount store, which will need to offer something very different to Aldi and Lidl, or it won’t be compelling enough to win shoppers back from the Germans.”
Despite high advocacy for discounters, Waitrose and M&S remained the most desirable shops to UK shoppers, according to the survey, with 14% and 13% of Brits who do not shop at these retailers wishing they could do so.
Roberts said: “Despite current challenges, local stalwarts like M&S and Waitrose will be encouraged to see they remain touchpoints of aspiration. It’s a testimony to the strength of their brand identities, while at the same time demonstrating why differentiation will be key to surviving the discounter threat.”
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