Why the loyalty market is ripe for disruption...

Many believe that the loyal customer is a dying breed. And in an age where countless savings can be found online and budget retailers offer tempting discounts, who can really blame them? Recent figures show that 24 per cent of UK families switched their main supermarket in the last year alone, with customers constantly on the lookout for a better deal. 

Yet many consumers are unaware that an endless array of perks and discounts are lying idle in their wallets.  While the humble loyalty card is a fixture of British retail, it has lost its appeal to the shopping-savvy customers of the 21st century. That is why it is absolutely essential, for both consumers and retailers, that the loyalty market undergoes a radical transformation; one that is both realistic about and complimentary to the modern consumer experience.

Approximately 92 per cent of UK adults are currently subscribed to a loyalty programme.  However, at present, the loyalty market represents lost billions from the British economy and this can be attributed largely to a shared apathy between consumers and retailers.

A recent study by Loyalive found that supermarket giants Sainsbury’s and Tesco, have unspent balances worth £1.3 and £1.7 billion respectively, across the millions of loyalty cards that are currently in circulation. Despite this almost half of all loyalty card owners (43 per cent) do not know their current balance and one in five (20 per cent) have never even checked it. But with all of the other pressing financial matters that the time-poor customer of 2015 has to deal with, where is their incentive to log on to each of their individual accounts and see what their points actually amount to in real terms?

Retailers can address this by attempting to make innovations which will demonstrate the real value of loyalty to customers. Recently, Waitrose implemented a ‘Pick Your Own Offers’ scheme, which allows customers to pick 10 products and make a 20 per cent saving on them every time they shop. It’s a simple idea which isn’t hidden by the muddy waters of an incomprehensible points system. It shows that big businesses can still engage their loyal customers, if they are willing to be bold and different.

Consumers should also be encouraged to find ways to make the most of what they are already entitled to, by employing methods which will be realistically compatible with their lifestyle. Loyalive, for instance, is a new app which stores all of your loyalty cards, live point balances and rewards; allowing customers to check what they are entitled to, as easily as they check the weather. Having access to this information on a smartphone, breaks down all the barriers that are evidently standing in the way of customers really engaging with loyalty schemes.

Companies should not give up on the idea of customer loyalty because ultimately, it is not the concept of the loyalty card scheme which is an outdated one – it is the methods through which they are executed that are in vital need of disruption.