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Why mobile app loyalty schemes aren’t captivating consumers yet

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5th Nov 2014
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Retailers thinking about ditching their good old-fashioned loyalty card scheme for a bells-and-whistles mobile app might want to consider the following data from GI Insight.

The marketing specialist surveyed over 1,000 UK consumers to find that just 6% of people view mobile apps as a driver for enrolling and staying active in a loyalty scheme.

In contrast, 74% of people specified redeemable points as the top reason for staying active with a loyalty scheme, with 60% pointing towards vouchers or coupons that provided cash value discounts as a primary driver too.  

Loyalty schemes have been under the spotlight in 2014, with a number of experts suggesting the old card and points process may have had its day, especially within the supermarket sector.

Several loyalty mobile platforms have also risen to prominence in recent months, however GI Insight’s report, The Lure of Loyalty, suggests existing methods are still a pull for consumers, as long as the deals retailers offer are better incentivised.

“With consumers becoming more demanding about what they expect from the companies they deal with, the opportunity for organisations that run loyalty programmes to increase both membership volumes and participation are there,” says Andy Wood, managing director of GI Insights.  

“This can only be achieved, however, by understanding the key motivators for loyalty scheme participation and using the customer data captured to ensure that these elements are managed and executed in a way that suits the customer base.

“With all the right elements of a loyalty scheme in place, a business as the perfect platform for encouraging customers to remain loyal, spend more, buy frequently and generally expand their relationship with the business – which in turn will drive greater profitability.”      

Sainsbury’s recently upset its customers by slashing the value of its Nectar reward scheme’s points in half, to try and offer greater one-off rewards such as ‘Swipe to Win’ and ‘10xpoints on fuel’.

However GI’s study suggests Sainsbury’s would have been better served delivering more innovation in terms of cost-saving and freebies, with 17% of its respondents seeing the freebie treats as a benefit and 12% list other perks such as events as an enticement.

When comparing women and men, the research reveals men are more enthused by the availability of a mobile app (8% versus 4%) while 10% of 18-24-year-olds and 14% of 25-34-year-olds list this as compelling reason to participate in a loyalty programme, compared to just 1% of over-65s and 2% of 55-64-year-olds.

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