Chapter 2: Loyalty is the new brand differentiator

Brands and retailers are finding ways to drive customer lifetime value in an increasingly complex and competitive landscape.

November 2021 | 5.5 minutes

Chapter 2: Loyalty is the new brand differentiator

Shoppers say incentives like free shipping (75%), simple and/or free returns (60%), and loyalty or rewards programs (56%) all increase their likelihood to buy. Taking retailers out of the equation, when it comes to the top traits of shoppers’ favorite brands, loyalty programs top the list. Shoppers also seek tailored engagements that are genuine and meet them on their terms, such as exclusive shopping experiences, early access to products, and sustainability.

Top five traits of shoppers’ favorite brands*

Offers a loyalty program
Offers exclusive shopping experiences and/or promotions
Caters to unique needs
Engages in the places they prefer, like over email, social media, shopping app, etc.
Offers early access to new products and has sustainable business practices [tied]

Spotlight on loyalty programs

In 2021, shoppers belonged to an average of 4.3 loyalty programs. While points-based programs are the most popular type today, data suggests that younger generations crave experiential programs that instill a genuine and authentic connection.

Millennials and Gen Zers value exclusive access to limited products and experiences, nearly two times more than Silents/Baby Boomers when it comes to loyalty programs. They are also more likely to join a fee-based loyalty program. Nearly one-third of Gen Zers report belonging to one, such as Amazon Prime or DoorDash’s DashPass.

Shoppers overall belong to the following types of loyalty programs:

Shoppers are interested in taking various actions in exchange for perks

Beyond earning special discounts and free shipping, many shoppers are interested in rewards for engaging and promoting the brand or retailer. This includes downloading an app (57%) or writing an online review (47%). One in three shoppers are willing to go so far as to share the brand on social media in exchange for rewards.

Shoppers are willing to exchange personal information for tailored rewards

Shoppers are also interested in providing certain personal information in exchange for relevant experiences and benefits. Sharing their birthday is the most common information that they are willing to share, but shoppers are also interested in providing their sizes and style preferences.
Data suggests that shoppers’ expectations around loyalty programs are changing and that brands and retailers have the opportunity to evolve loyalty programs in terms of types of rewards as well as actions taken to earn them.

Chapter 3: Brands and retailers are evolving their customer experience strategies

Discover where retail executives are investing in order to meet changing shopper expectations.

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