Happenings in the retail space - Part 1
Tuesday, May 31, 2011
Posted by ACI Worldwide
For those of you interested in what is going on in the merchant retail space, specifically in the US, I wanted to share with you the findings of some research we ran recently, which identified that half of U.S. consumers would prefer one card for all of their retail loyalty programs. They also said that loyalty and rewards programs have become too complicated and burdensome, and they aren’t truly driving loyalty.
I find these results very interesting, because so many retailers do run loyalty programs and therefore, one would assume, customer loyalty is important to them – but they are still ‘missing a trick’ so to speak.
Three quarters of Americans (74%) are members of at least one retail loyalty and reward program, and 27% are members of four or more, according to the study. Consumers want to consolidate their myriad of loyalty and rewards programs on a single device, and they expect to be able to use their rewards regardless of whether they are shopping in the store or online. Unfortunately, at the moment, loyalty programs don’t deliver. For example we also found that:
• Nearly half (49%) of loyalty program members never or rarely take advantage of loyalty program perks when shopping online.
• More than three-quarters (78%) of Americans who are members of loyalty card programs say easy online access to their loyalty memberships would make them more likely to shop at the retail websites that honor their loyalty programs online.
• When shopping online, only half (53%) of Americans who are members of retail loyalty rewards programs visit websites of retailers where they can earn discounts and rewards, before looking elsewhere.
• The need for a consolidated loyalty device has been well-established, and half of American consumers (52%) prefer a single card that can hold all their memberships, versus a consolidated key fob or mobile application.
• One-third (32%) of Americans prefer a consolidated key chain card or key fob; 17% of Americans would like to see a mobile app that consolidates all of their retail loyalty rewards programs.
In the United Sates, collective loyalty programs in which multiple retailers share the costs of the program and a common currency or points system, have yet to gain widespread adoption, though ‘programs with a cause’ like uPromise have had some success. In other countries, particularly the U.K. and South Africa, coalition programs are very well established. With American consumers demanding consolidated loyalty and rewards programs, U.S. retailers need to move in this direction.
Americans also agree that retail loyalty and rewards programs become problematic when shopping online. So difficult, in fact, that nearly half (49%) of loyalty program members never or rarely take advantage of loyalty program perks when shopping online.
Online shopping is simple and convenient; it should be just as easy to access loyalty programs online. More than three-quarters (78%) of Americans say that easy online access to their loyalty memberships would make them more likely to shop at the retail websites that honor their loyalty programs online.
There’s a huge disconnect between retailers and consumers. When we asked Americans with loyalty card memberships which retail websites they visit first when they shop online, only half (53%) of them told us they go to online retailers where they can earn discounts and rewards. When consumers shop online and can’t use their rewards programs, they are disappointed and question the value of the program; this is a problem and an opportunity for retailers to increase sales and reduce shopping cart abandon rates.
These results highlight the need for retailers to take a proper look at their loyalty schemes, and identify where they might be going wrong.
Related Blog Posts
Payments and Fraud: The Paradox Twins
Digital commerce through web and mobile is where merchants predominantly experience shopper growth today. This has become a hugely important domain for their focus. It offers a means for international growth, new market penetration and a way to engage with shopper-hungry Millennials in their culture. Merchants frequently adopt a Digital-First, eCommerce-First or Mobile-First strategy to ensure full corporate buy-in to this strategy.
Knowing New Customers – And How Shared Data Helps in Fighting Fraud
As the eCommerce industry continues its rapid growth, the lines between physical and digital shopping are becoming increasingly blurred. These changes are creating a number of challenges for merchants, not least around customer visibility and fraud prevention.
Adding a Global Payments Layer for Future Growth
Digitization has changed the payments industry completely and irrevocably. Cash payments are in full retreat, as more people pay digitally – with more than 1.6 billion people now shopping online. The digital customer expects an extremely fast and convenient payment experience, with high security standards, and immediate availability of payments information.
Let’s Get Phygital: eCommerce Is Coming To A Store Near You
While payments vendors continue to pitch and strategize with a focus on omnichannel, the omnichannel story has already moved on.
Make no mistake – omnichannel remains important and the best vendors have solutions that provide a single cloud payments service capable of delivering a single view of the customer across stores and digital channels. And the best retailers utilize these solutions to deliver efficient cross-channel shopping experiences. Meanwhile, many other retailers get by (though seldom rise to the top) with a siloed approach.
Around The World: Taking Stock of Global eCommerce in 2019
As I head to #NRF2019 in New York City next week, I’m excited to see how some of the biggest retailers and merchants see the industry evolving over the coming year. What trends they think are going to shape 2019, and which of 2018’s buzzwords can be put to bed.
Fraudsters Don’t Wait for Peak, So Neither Should You: 2019 Fraud Strategy Starts Now!
In existence for barely two decades, eCommerce has transformed not only the way we shop, but also how retailers plan and execute their marketing strategies around the peak shopping season. Now that we’re deep into this period, retailers will have prepared for changes in buyer behaviors, relaxed their strategies to be within the limits of manageable review rate, and most important of all, put strategies in place for increased fraud attempts.
The Power Behind Payments – Is It Time for the ‘Slow Fintech’ Movement?
According to a freshly-minted piece of research from the Dutch central bank, choosing card payments over cash is not only convenient, it’s also good for the environment. The study considers everything from the origin of cotton that goes into the production of (Euro) banknotes and the environmental impact of armored vehicles to transport cash, through to the energy usage of POS card payment terminals in standby mode.
‘Soup To Nuts’ – A Multi-Layered Fraud Menu for the Holiday Season
The holiday shopping season is well underway, with Black Friday now behind us and many retailers around the world braced for higher levels of eCommerce fraud, from Cyber Monday all the way though until Christmas.
The ‘Internet of Things’ is the Game-Changing Next Step for Telcos… But What Are They Missing?
As I travel to meet new telcos and attend an array of trade shows around the globe, one discussion that comes up again and again is how the telco industry can gear up for the world of IoT. And it’s not just a topic that telcos are “a bit” interested in – the sector believes that IoT will drive the fourth industrial revolution, likening it in importance to the discovery of steam power.
The Challenge of Catering to the Anything, Anywhere, Anytime Retail Shopper
Ten years ago, retail eCommerce was a fairly simple provision; most retailers’ websites offered a small range of products with long lead times, local delivery and postal returns. Payments were mostly completed by card in the local currency, and the online customer experience was less than slick.