With supermarkets including Sainsbury’s, Morrisons, M&S and Coop following Tesco’s lead, launching discounted prices exclusively for loyalty scheme members, the popularity of these programmes has risen among price-conscious shoppers, according to the latest research from Retail Technology Show (RTS), the leading event that connects retail’s changemakers and leading tech innovators.
However, while discount-driven consumers are flocking to sign-up to access member-only offers, there remains shopper concern around the use of their data and the fairness of a dual-pricing system.
Original research of over 1,000 shoppers by the RTS, which takes place at London Olympia on the 24 and 25 April 2024, revealed three quarters (73%) feel loyalty prices are an effective way to encourage them to sign-up as a member.
As household budgets remain squeezed by ongoing cost-of-living pressures, over half (54%) had started shopping with a retailer because of the significant discounts offered to card holders, while a quarter (23%) now say they won’t shop with retailers not offering ‘dual-pricing’ for loyalty members. And this adoption has seen retailer loyalty scheme sign-ups grow exponentially; since introducing ClubCard prices in 2020, for instance Tesco has grown its loyalty programme from 14million to now 21million users, while Sainsbury’s saw sign-ups of 1million new customers between the launch of NectarPrices (April, 2023) and July of last year.
Whilst being drawn in by the prospect of significant discounts, consumers remain savvy that by opting into loyalty programmes, their data will be used by retailers; three quarters (73%) felt loyalty scheme prices are an effective way of growing marketing data. However, that didn’t stop some shoppers from trying to play the system; almost three in ten (28%) had taken a loyalty card to the checkout to get membership deals but then didn’t register the card afterwards.
Matt Bradley, Event Director at the Retail Technology Show, commented: “Consistently our annual consumer polls show that, in general, shoppers don’t mind giving up their data, if there is a value exchange. With many cost-of-living shoppers trying to make squeezed household budgets work harder, the prospect of immediate discounts is a tangible benefit.”
“However, shoppers are increasingly aware of just how valuable their data is to retailers. That means, in order to keep customers satisfied that the value exchange is sufficient, retailers need to think about how they can use that data to further personalise promotions to make loyalty experiences all the more compelling,” he added.
As well as data use concerns, the impact of ‘dual pricing’ for loyalty and non-loyalty customers also hasn’t been met without debate with the Competitions and Markets Authority (CMA) starting its probe into supermarket loyalty schemes this month, which will review the practice of only offering promotional prices to members.
More than half (52%) of shoppers polled by RTS felt retailers are significantly elevating regular, non-loyalty scheme prices to make more money. A further 49% said that by offering such significant discounts to loyalty scheme members, regular shoppers who weren’t signed up to loyalty programmes risked being ripped off. This follows an investigation by This is Money which revealed supermarket customers who shop without a loyalty card could be paying between 23-26% more respectively on average in a typical shop.
Loyalty will once again be a key focus on the conference programme of the RTS, with publisher of Retail Technology magazine, Miya Knight’s, chairing the Customer, Marketing and Loyalty track on Day 1 of the show. Gymshark’s Chief Technology Officer, John Douglas, and Paul Smith’s Head of Retail Operations, Camellia Spaczynska, also will discuss successful strategies for leveraging customer data and personalisation to drive enhanced loyalty in a seminal panel session.
Register for free to attend the industry’s flagship event which brings the magic of retail to life, here.
