Loyalty programmes on the rise as consumers battle cost-of-living crisis
As consumers are increasingly being pushed to the wall between the rising cost of living and flat salaries, at least 73% are consistently using loyalty programmes to ease their spending costs.
The recently released Truth & BrandMapp Loyalty Whitepaper 2022 provides an annual snapshot of the loyalty habits of more than 33,000 South African adults with a gross monthly household income of R10,000 or more.
Clicks ClubCard showed up as the most used loyalty programme (79% of consumers) in the country for the fourth year since the whitepaper series began in 2015.
Speaking at the recent Leaders in Loyalty Summit, Melanie van Rooy, the head of marketing at Clicks, noted that meaningful and personal customer relationships had become key to the modern retail environment.
“The war of the wallet and mind space of the consumer is more fiercely contested. This has propelled us to really rethink our loyalty programme and the way that we interact with our customers through traditional relationships.”
The success of Clicks ClubCard — one of the oldest retail loyalty programmes in SA, with more than 9.7 million active members — is rooted in its convenience, value and differentiation proposition. Van Rooy says in the past 12 months alone, it has paid out more than R600-million in cashback rewards to members and since its inception, it has seen more than R5.5-billion in cashback spend.
Outside the retail sector, FNB eBucks and the Spur Family Card retain their top positions as the most used financial services and restaurant loyalty programmes, respectively.
Both Discovery Vitality and Standard Bank UCount were voted as the loyalty programmes that South Africans can’t live without.
Amanda Cromhout, the chief executive of Truth (a strategy consultancy), notes that South Africa has a mature loyalty market, with an explosion in the volume of programmes used over the past eight years moving from an average of 3.6 programmes per person to 9.2 programmes this year.
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Cashback from points remains the number one loyalty benefit of choice; all ages, incomes and genders vote for cashback. When it came to the redemption of loyalty points, consumers fell into three groups: those who wish to save points for a bigger reward, those who wish to be instantly rewarded and those who want both. Surprisingly, consumers still prefer to swipe a loyalty card over using an app or a digital card.
A parallel loyalty study by MoyaApp, reaching consumers with a household income of R10,000 or less, showed that 82% of this market use loyalty programmes and these programmes strongly influence their choice of shopping and banking brands.
Shoprite Xtra Savings is the most used loyalty programme for lower-income consumers, followed by Pick n Pay Smart Shopper.
Neil Schreuder, chief of strategy and innovation at ShopriteX, says that last year the programme gave back R9.4-billion in Xtra savings instant discounts. Over and above that, each consumer is mailed personal discounts based on their shopping behaviour.
“We’re investing quite heavily in hyper-personalisation, with consumers receiving personal discounts on the channel they use most, such as the Checkers Sixty60 app, on Whatsapp or on Moya, which is a competitive data-free app. For example, if you usually shop at 10 on a Saturday morning, we will send you your targeted personal discount offers an hour before that,” he says.
The most used financial services brand is Capitec Live Better, which is only 18 months old. Kelly Goldsworthy of Capitec Live Better says it has 9.5 million registered users with more than 35,000 registrations a day.
“Our target is to get all 19 million Capitec clients registered before the end of this financial year. We’ve seen that five million users are saving money for a rainy day, using the Live Better rewards programme. Financial education and literacy are crucial to growing the economy, and we’ve seen definite behaviour changes,” she says. DM/BM