Recession hit consumers looking for real-time rewards
Mobile to increase in importance as delivery channel for immediate offers
To combat struggling financial situations, 42% of consumers say they prefer to receive offers or rewards while out shopping, rather than later and many are searching online for discount vouchers.
Those are among the findings of a new survey conducted by Ipsos MORI and The Logic Group, which also found that over two fifths (44%) believe the economy will worsen in the next 12 months.
The survey revealed the rapidly changing landscape in terms of how and when offers are delivered to the consumer, and via what type of technology. Reflecting the trend towards wanting real-time offers, over 13% of those polled had received loyalty scheme offers via their mobile phone in the past 6 months. Many are also searching for online discount vouchers, and requests to receive offers may grow according to the research.
Receipt of loyalty scheme offers is most common BUT requests for offers may grow – a trend to watch
The survey covered UK consumers but Jon Worley, director of business development at the Logic Group, said the results have plenty of relevance to other markets: “One of the underlying factors influencing the loyalty market in the UK is clearly the economic situation and that will be similar and sometimes even more acute elsewhere.
“Consumers are getting more focussed on getting good deals and that is building year on year as the economic situation tightens.”
Worley says that mobile and social media, while still in their infancy are recognised by consumers for their importance to loyalty programmes.
“Smartphone penetration and bandwidth are both rising quite quickly, and in the next couple of years the smartphone will become a key point of interaction for delivering offers and value to consumers at the point of sale,” says Worley.
He adds that social media will also increase in importance, particularly for brands that represent a person’s outlook and lifestyle choice such as fashion, consumer electronics, music and arts.
The report found that consumers are no longer only interested in reaping the benefits from traditional card-based programmes, but are looking to alternatives such as social media and real-time discounting to stay loyal.
Simon Atkinson, assistant chief executive of Ipsos MORI, said: “This year’s results are a reminder that, in the eyes of customers, loyalty is about more than just emotional attachment. Customers don’t necessarily expect something for nothing. But they expect recognition for showing loyalty to services, products or brands.
“What’s less clear is just how quickly new technologies will change the landscape, and in what ways. We’ve all seen the growth of high-speed internet, smartphones, social networking and apps. But it’s still early days in terms of what this means for loyalty. Consumers aren’t thinking about what’s possible; there is an opportunity for providers to serve up a compelling offer – those who do this right will see bottom-line benefit.”
Technology-driven change in customer loyalty
Customers’ attitudes toward the use of technology in driving loyalty are changing, the report found. In the past six months, 13% of adults have received loyalty scheme offers via their mobile phones, with a further 7% extra expecting to receive offers via their mobile phones in the next 12 months.
To date, Britain has had a slow uptake in mobile payments use, with only 7% of adults having used their mobile phones for payment in the past six months. However, looking forward there are high expectations amongst customers with 17% expecting to have paid for goods using their mobile in a year’s time. This same number also expects to use their phone in place of a loyalty card in the same period.
The Social Consumer
The research also shows the growing importance of social media as a medium to drive loyalty through increased customer interactions. While Facebook looks set to remain the dominant social media channel in the coming year, it is Twitter that will experience the largest growth in people using it to show their loyalty. In the last six months, over a fifth (22%) of Brits have visited the Facebook site of a company they are loyal to. In comparison, only 8% have followed a company they feel loyal to on Twitter. 9% of adults in Britain have received a loyalty offer via a social networking site in the same period.
However, in the next 12 months, the projected number of customers following companies they feel loyal to on Twitter could double – in a year’s time, more people say they will be following a company on Twitter that they feel loyal to than there are currently British Twitter users. With 24% of British adults saying they will use their phones to check product details/product reviews in store also in a year’s time, social media use on mobile will be a key medium to help drive customer loyalty.
“From a customer point of view, social media is changing the way customers interact with companies,” said Antony Jones, The Logic Group CEO. “For businesses, using social media platforms such as Facebook adds another channel to customer interactions and greater business opportunity to influence and engage with customers along their purchasing journey; whether that’s greater availability of information, a more relevant and customer-friendly tone to communications, responding quickly to an enquiry, or offering a targeted loyalty deals to followers.”
Winners & Losers of 2012
Banks/building societies, supermarkets and mobile phone network operators make up the top three sectors that British consumers feel loyal towards – 66% feel loyal to banks/building societies, 62% to supermarkets and 53% to mobile phone network operators – although these figures change as we look at different age groups.
Banks/building societies still rate as number one for 15-24 year olds (55% feel loyal to them), however the loyalty levels are far lower than for the older generation (55-64 year olds), of which eight out of ten (79%) feel loyal to their bank/building society. The same disparity is seen with supermarkets as half (50%) of 15-24 year olds feel loyal to supermarkets compared to seven out of ten (71%) of 55-64 year olds, despite 68% of Brits being a supermarket loyalty scheme member. The organisations that attract feelings of loyalty least often in Britain are hotels and electrical/IT retailers.