Grocery Loyalty Program Memberships Continue Decline

M&A activity responsible, but situation can be remedied

June 29, 2017, 04:01 pm

Although growth of loyalty program membership has continued, reaching 3.8 billion, this year’s edition of Colloquy’s Loyalty Census shows that it slowed 11 points to 15 percent since the 2015 edition. And while several factors have been at play, grocery program memberships have contributed to this, dropping to 142 million from 88 million in 2015, continuing a downward trend in three consecutive reports.

The findings, presented by Toronto-based loyalty program and analytics firm LoyaltyOne, show that the 24 percent decrease in grocery program memberships is actually due in part to the many mergers and acquisitions in the sector. It also shows a need to continue offering enticing reasons for consumers to become members.

“The membership growth slowdown signals the U.S. loyalty market is maturing and retailers need to up their game on how to attract and retain members within their loyalty programs,” said Melissa Fruend, LoyaltyOne global solutions partner and author of the Colloquy Census, put out by LoyaltyOne’s independently operated Colloquy arm. “In order to improve loyalty marketing, brands must optimize the overall experience by creating more personalized and relevant experiences for their best customers.”

When looking at attributes that best keep consumers happy with and participating in a loyalty program, the 2017 research shows that 53 percent cite “easy to use” as the main one, even greater than “gives me discounts” (39 percent) and “easy to understand” (37 percent), both of which should also be considered by grocers, among other reasons. Conversely, grocers should take note of the greatest barrier to sticking with a program: “It took too long to earn points or miles” is the top reason for abandoning, with 57 percent of respondents citing that issue.

Additionally, the Colloquy Census shows that trust might not be as low as some think: Just more than half (51 percent) of Americans still trust loyalty programs with their personal information.