A recent study conducted by dunnhumby has revealed that over half (53%) of prominent retailers have observed an increase in the adoption of loyalty schemes in recent years.
In its report titled "The Power of Personalised Loyalty," the data science firm examined the loyalty approaches implemented by 24 major retailers across regions including EMEA, Latin America, North America, and the Asia-Pacific.
GLOA recent study conducted by dunnhumby has revealed that over half (53%) of prominent retailers have observed an increase in the adoption of loyalty schemes in recent years.
In its report titled “The Power of Personalised Loyalty,” the data science firm examined the loyalty approaches implemented by 24 major retailers across regions including EMEA, Latin America, North America, and the Asia-Pacific.
Key takeaways from the report:
- Coupons, vouchers, and members-only pricing dominate the loyalty programme landscape as it stands.
- Mobile apps and omnichannel marketing are where most retailers’ future plans lie, as opposed to new technologies like chatbots or augmented reality.
- Tailored digital recommendations are the leading choice when it comes to personalisation strategies – with emerging technologies again lagging behind.
- The majority of retailers follow the same approach to personalisation online as they do in-store.
- Financial constraints and technical difficulties present the biggest challenges when it comes to the effective implementation of loyalty and personalisation initiatives.
- Most retailers have managed to retain or grow their base of loyal customers over the past few years contrary to what industry news headlines are reporting.
- Uptake of loyalty programmes is growing in kind.
- Private brands continue to burgeon in popularity.
The report highlights that 70% of retailers have effectively maintained or expanded their loyal customer base—a finding that contradicts some common assumptions and media reports.
Debora Franchim, the director of personalization and customer engagement at dunnhumby and a co-author of the report, commented, “Loyalty is difficult to earn and easy to lose, but despite challenging circumstances, most retailers have successfully retained or increased their base of loyal customers. Those who have succeeded have embraced genuine Customer First principles, focusing intensely on delivering value, rather than being preoccupied with competitors’ activities.”
Regarding the types of loyalty programs offered by retailers, the study found that more than four-fifths (82%) provide discount coupons and vouchers, while three-quarters (75%) offer exclusive member-only discounts, such as Tesco’s ‘Clubcard Prices’ initiative.
Retailers also employ personalized product recommendations based on purchase history (68%), points-based rewards systems (61%), tiered membership levels with increasing benefits (18%), and other initiatives (11%).
The study suggests that future loyalty strategies are likely to increasingly rely on mobile apps and omnichannel marketing rather than emerging technologies like chatbots or augmented reality. Personalized digital recommendations are favored within personalization strategies, while emerging technologies see limited adoption.
Financial constraints and technical challenges are identified as the primary obstacles to effective implementation in both areas.
Franchim added, “There’s always room for innovation if it adds value and its impact can be measured. For now, focusing on proven methods that deliver optimal value for loyal customers appears to be the most effective strategy. In many cases, a robust private brand proposition also contributes to loyalty success.”
