Loyalty needs to modernise to attract younger shoppers, says survey

Over 90% of UK consumers are signed up to a loyalty scheme, swiping their cards at the checkout around three times a week. But a research from Ecrebo reported a generation gap in how younger users view loyalty programmes.

While 91% of UK customers are members of loyalty schemes, this figure drops to 83% of 16-24 year olds. And 36% of 16-24 year olds find traditional loyalty schemes too complicated, compared to 27% of shoppers over 25.

Nearly a third of younger shoppers also find the sign-up process for loyalty schemes too long.

According to the report, this generation of shoppers are looking for more than just points: 74% want personalised rewards, 89% want them to be quick and easy to use, and 49% want cardless schemes.

In 2015, M&S launched a reward scheme, called Sparks, to engage with customers. The scheme attempted to change the way customers thought about loyalty by offering personalised experiences and bonus rewards instead of monetary value for points accrued.

"We understand customers’ frustrations and lack of interest with traditional loyalty schemes, and that’s why we set out with Sparks to offer our customers a more personalised experience," said Harry Bullard, head of pricing and promotions at the retailer.

He added: "We take the time to get to know the things our customers like, and then reward them with money-off offers exclusive to them, priority access to new product launches and sales, and exclusive invitations to money-can’t-buy experiences."

While the scheme offers personalised promotions, it still revolves around the use of a physical card, which younger customers no longer want cluttering up their wallets.

Sir Keith Mills, founder of Air Miles and Nectar card, said: "Younger demographics are increasingly running their lives digitally so we need to make sure we can deliver fast, high volume and relevant rewards and offers to consumers through digital channels.”

Andrew Mann, VP insight, pricing and digital CRM at Asda, agreed. He said: "Traditional card-based, points-based loyalty schemes add complexity. Loyalty creation of the future will be based around creating value in a frictionless digital experience."

Dr. Hassan Hajji, co-founder and CEO of Ecrebo, added: "In a marketplace which remains more competitive than ever, it is crucial that retailers continually reassess their loyalty offer, consider new and different ways of engaging customers and stay ahead of changing expectations and needs.”