Maritz Loyalty Marketing Reveals the Demographics and Spending Habits of Loyalty Program Members
Friday, 04 August 2006
In an increasingly fragmented retail landscape, customer loyalty programs are an important tool to help retailers maximize their “share of wallet” among consumers. In fact, a recent study by Maritz, a world leader in market research and consumer loyalty program consulting and implementation, found that rewards program members are more likely to have spent a greater amount of money in the past six months across the 11 retail categories examined in the study, including home improvement, electronics, grocery and book stores.
“It is interesting to see that rewards program members are spending more. However, we need to keep in mind that the programs might not directly cause shoppers to increase their purchases,” said Tim Crank, director of product management, Maritz Loyalty Marketing. “It could be that those who spend more join programs to obtain rewards for purchases they would have made even if they weren’t members. But whatever the reason, enrolling shoppers who are spending more is a great tool for retailers because it allows them to mine the data collected from loyalty programs to identify and create a dialogue with profitable customers.”
What’s in Your Wallet?
Maritz Loyalty Marketing also examined various demographic characteristics, including rural vs. city living, marital status, income levels and gender, for significant differences to determine what types of people are carrying consumer loyalty program cards in their wallets.
The study revealed that loyalty program members are more likely to be one or more of the following: female, young, living with children under the age of 18 in the household, or from the Northeast.
The Man Myth: Do They Like to Shop More Than We Think?
Women (62 percent) are significantly more likely to belong to a store or membership loyalty program than men. However, more than half of the men surveyed (54 percent) say they are part of a program.
“The significant difference between the number of men and women who belong to a store or membership program isn’t shocking because most people expect moms to be the primary purchaser in the household,” said Crank. “What should be of interest for retailers is that more than half of the male population carries around plastic loyalty program cards in their wallets. Based on this finding, retailers should tell their employees not to hesitate to ask men about joining a program.”
Fountain of Youth
Customer loyalty program members tend to be younger than those who aren’t members with 71 percent of 25- to 34-year-olds belonging to store or membership programs. And survey respondents older than 55 comprised the highest percentage of non-program members.
“A logical assumption is that those in or approaching retirement anticipate they won’t be spending as much money as younger shoppers and might not feel that they’ll reap the benefits of loyalty programs,” said Crank. “The challenge for retailers is to recognize that customers can be valuable to them in all life stages, and that they can keep all shoppers enrolled and active in loyalty programs by offering rewards that are meaningful to them throughout their lives.”
Simply having kids is another influencing factor. Those who have children under the age of 18 in their household are significantly more likely to have a store or membership program card or a co-branded credit card.
Across the USA
Regardless of the fact that many stores are national chains, according to the study, members of customer rewards programs tend to be clustered by region. The Northeast (70 percent) and West (63 percent) have the highest concentration of store or membership loyalty program participants. People in the South (37 percent) and the Midwest (42 percent) are significantly more likely to not belong to any type of consumer loyalty program.
Who’s Missing From Retail Loyalty Programs?
“It’s important to know who is likely to join a program so that stores can adjust their merchandise offerings, layout and product adjacencies, and customer service to cater to their most loyal customers,” said Crank. “However, knowing which demographic groups are likely not to be members offers retailers an opportunity to identify and interact with other potentially valuable customers who may not be interested in being a part of a loyalty program.”
Non-members tend to have one or more of the following significantly relevant characteristics (by retail category):
One additional item of note: an overwhelming majority of respondents (77 percent) are members of grocery store (e.g., Kroger, Safeway) loyalty programs. For the complete story, with tables, go to http://www.maritzloyalty.com/newsreleases/loyalty-cards-in-wallet.html.
About the study
The online study of 2,178 adult shoppers who have made a purchase in the six months prior to the study from at least one of 11 retail categories included in this study revealed the demographic make-up of consumer reward program members. The margin of error for this study is +/- 2 percent. For the purpose of this study, rewards programs are defined as either a store or membership program or a private or co-labeled credit card, which award customers points for purchases or other behaviors that they can later redeem for various rewards including discounts, gift certificates, merchandise, cash back or travel. The study was conducted by Maritz Research for Maritz Loyalty