For forward-thinking merchants eyeing new ways to keep the transactions flowing, to keep consumers opening their wallets and wielding cards, new approaches to rewards may prove most rewarding.
Consumer spending these past few months has been uneven at best, and we’re nearing the sprint (or is it a marathon?) of holiday spending in earnest.
As noted here, Black Friday and Cyber Monday sales were up high single-digit percentage points. And while those stats are encouraging against the backdrop where October retail spending was lower, savings are lower and November gauges of consumer confidence proved to be uneven (expectations are that inflation’s here to stay), retailers will need to keep incentivizing customers at the register.
In recent weeks, we’ve seen several announcements where firms and brands are tapping into loyalty programs that reinforce customer affinity for goods and services, and also help defray the cost to consumers of paying for those goods and services.
By way of example, Cracker Barrel has said its loyalty program is gaining momentum, where its each dollar spent helps accumulate points that can be redeemed for menu items. The company, like other quick-service restaurants (QSRs), are among the firms fine-tuning their efforts as PYMNTS Intelligence data show that 51% of consumers have used loyalty programs, and 34% of customers at full-service restaurants have done so.
And late last month, American Express and Amazon announced a joint effort where cash-back cardholders can now spend their Reward Dollars on Amazon. The deal, we noted, brings commerce a bit closer to offering what might be thought of as rewards “ubiquity.”
Beyond the confines of consumer/merchant payments, Comdata said last week that it has launched a rewards program with its Comdata Connect Card that — funded through bank accounts or credit cards — lets users earn points and rewards from those existing credit card.
As data collection and analysis gets ever-more granular — and real time — merchants and issuers are able to leverage receipt-level information to personalize and target their offerings. In the PYMNTS Intelligence report “Leveraging Item-Level Receipt Data: How Card-Linked Offers Drive Customer Loyalty,” via collaboration with Banyan, we found that 65% of card users shop with brands or merchants where they are members of loyalty or rewards programs. More than 40% of customers had used a card-linked offer program within the past year.
Rewards as a competitive tool/strategy are in evidence, given the fact that 50% of millennials would switch to merchants offering product-specific or merchant specific card-linked offer programs. And 60% of debit card users said they’d prefer using cards that offer personalized rewards.
And yet there is room for improvement for boosting top line momentum, as 38% of consumers who have not used card-linked offers said they had not done so because they lack familiarity with these programs.