Business Maverick


Cash is king as consumers favour loyalty programmes offering immediate relief at till point

Cash is king as consumers favour loyalty programmes offering immediate relief at till point
FNB, Clicks, Capitec and Shoprite loyalty reward programmes. (Photo: Supplied)

Three-quarters of consumers in South Africa are now using loyalty schemes but those that operate on a points system are not as popular as cashback in their pockets

The latest Truth & BrandMapp Loyalty White Paper indicates that 76% of consumers use loyalty programmes, which is 3% more than in 2022. While there’s little change across income and gender, younger consumers under the age of 25 are less likely to use loyalty programmes, although that is very much linked to economic status: 72% of mass market youth are actively using such programmes, which suggests lower-income consumers are more reliant on these to get by, irrespective of age.

This year, consumers are more reliant than ever on loyalty programmes, with use rising sharply by 30%.

On average, wealthier consumers use 9.4 loyalty programmes, while mass-market consumers use 4.8 programmes each.

The whitepaper is based predominantly on the results from the BrandMapp-WhyFive Insights study, combined with insights from one of the world’s leading loyalty consultancies, Truth. The data is further enriched by insights from the free-to-use MoyaApp super app, helping the study to represent consumer responses ranging from high earners to Sassa grant recipients.

Now in its tenth year, the BrandMapp consumer landscape study surveys 35,000 “economically active” respondents and reflects the needs, perceptions and behaviour of about 13 million South Africans living in homes with a monthly household income of R10,000 or more.

Within this base, the group is segmented into “middle market” (the 10 million consumers earning a monthly household income of R10,000-R40,000) and the “top end” — three million earning more than R40,000 household income per month.

To supplement the consumer landscape study, data from MoyaApp is included for a second year. MoyaApp is an all-in-one super app with data-free messaging/chat, content services, and MoyaPay. Users can chat and text message in the app, which is data-free in South Africa. They can also apply for Sassa grants and check on their grant status, also data-free.

The app reaches 11,500 “mass market” consumers with a household income of R10,000 per month or less: 51% of them are unemployed, 13% students, 13% self-employed, 12% part-time and 11% full-time employed.

These are the most popular loyalty programmes, listed alphabetically:

Absa Rewards, Capitec Live Better, Checkers Xtra Savings, Clicks ClubCard, Discovery Vitality, FNB eBucks, Old Mutual Rewards, Pick n Pay Smart Shopper, Shell V+, Shoprite Xtra Savings and Standard Bank UCount.

The Shoprite Group is this year’s clear winner with both economically active and mass-market consumers. In the economically active band, Checkers Xtra Savings is the most used programme, with 78% usage, beating Clicks ClubCard by a hair (0.4%). Clicks’ popular loyalty programme has won four times in seven reports as the most used loyalty programme. For mass market consumers, Shoprite Xtra Savings is the most used loyalty programme.

Read more in Daily Maverick: Loyalty programmes on the rise as consumers battle cost-of-living crisis

Meredith Allen, head of Rewards and Personalisation from ShopriteX, is quoted in the report as saying that Xtra Savings, which operates under both Checkers and Shoprite, covers about 80% of all sales coverage — “comparable, if not better than the world’s best loyalty programmes”.

Grocery delivery apps are helping to drive customer loyalty. Checkers Sixty60 has almost tripled its footprint in the past 24 months, the report notes. About 31% of economically active consumers use Sixty60 at least once a month. Its competitors are also noting increasing usage but volumes are sharply lower: 15%, 8% and 4% use Pick n Pay ASAP, Woolies Dash and Spar 2U, respectively at least once per month.

Cashback is the preferred benefit of all consumers, but the mass market also values airtime and/or data.

Wealthier consumers prefer to swipe a card, while lower-income consumers would rather offer their cellphone number.

If there can only be one, 37% of wealthier consumers would choose Discovery Vitality and 41% of mass market consumers would select Capitec Live Better.

FNB eBucks is the only non-retail loyalty programme within the top 10 most used loyalty programmes.

Fuel sector loyalty programmes have been highlighted as ones to watch, noting that there has been an “explosion” of such programmes in the past 24 months. “Previously, the fuel industry in South Africa rewarded its customers for fuel brand choice via partnerships only. Legislation restricts the direct discounting of fuel and hence the partnership model enabled fuel brands to drive potential increased sales via partnership programmes,” the report notes.

The biggest of the fuel loyalty programmes is Engen (a partnership with FNB eBucks and Clicks ClubCard).

Four proprietary fuel programmes in the market include Shell V+, Sasol Rewards, Total Energies Club and Astron Energy Rewards, which launched last year.

Most of those who don’t use loyalty programmes don’t believe it is worth their while. Twenty per cent of higher-income earners say they don’t spend enough to earn decent rewards and 26% of mass market consumers believe the same. Fourteen per cent of wealthier consumers say it takes too long to earn rewards, a feeling shared by 13% of mass market consumers, who also have concerns about their personal data security (20%).

Loyalty programmes change consumer behaviour — particularly among economically active consumers. It affects where they shop for groceries, where they buy fuel and where they bank. DM


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