Consumer Participation in Loyalty Programs Up Amidst Recession

Published in CSP Daily News

One-third find retail loyalty programs "more important" when battling tough times

CINCINNATI -- Despite the recession, U.S. consumer participation in rewards programs is on the rise across all demographic segments, according to recently released COLLOQUY research. The study reports a 19% participation growth by the general population since 2007.

Activity in desirable demographic segments is up even more. Participation by Millennials (age 18 to 25) has soared 32% since last measured in 2007. Women as a demographic are up 29% in the same time period.

Consumers are leaning on loyalty programs to stretch household budgets further by earning rewards [image-nocss] for their purchases. The retail category demonstrates the highest positive impact in reward program attitudes, with 75% of 2,152 surveyed reporting a net neutral or positive effect on their program participation as a result of the economy. The financial services sector remained relatively flat, with 52.7% reporting "no difference" in the impact of the recession on program participation.

"In spite of the dire economic news...consumers remain as engaged, if not more, with loyalty and rewards programs," said COLLOQUY editorial director Rick Ferguson. "In fact, U.S. consumers clearly see value in program participation, and continue to leverage their activity as an antidote to hard timesseeking added value and using rewards to stretch dollars."

COLLOQUY's study of loyalty perceptions, "After the Meltdown," examined trends in six consumer segments: General Population representing a statistically distributed sample of the United States overall; Affluent (heads of household with annual incomes of $125,000 or greater); Millennials or Young Adults (any respondent 18 to 25 years of age); Seniors (any respondent 60 years or older); Core Women (any female respondent age 25 to 49 with an annual income between $50,000 and $125,000); and Emerging Hispanic (any respondent age 21 or older of Hispanic origin with an annual household income of $40,000 or less.

Loyalty participation by Millennials has increased significantly since COLLOQUY's last benchmarking study in 2007. According to the study officially released today, recalled participation rates in this demographic stand at 58%, a 32% increase from two years ago.

The data reveals more intriguing information about this group and their perceptions about loyalty programs, including nearly half (46.4%) of responding Millennials rate retail rewards programs as "more important" during the recession. This outpaces the general population, at 32.3% for the same category. Some 27% of Millennials are actively seeking to enroll in new programs to help expand their budgets. Somewhat expected, but still significant, Millennials are far more likely to enjoy engaging with programs through new media channels than the General Population.

Over 55% appreciate communicating through social networking sites (39% for General Population), and 52% enjoy communication via cell phone or text message (38% for General Population).

"Millennials represent a golden opportunity in a time of economic darkness for loyalty marketers," said Kelly Hlavinka, COLLOQUY partner and co-author of the white paper. "This demographic is receptive to the wish-list of loyalty initiativeseager to join programs, eager to build relationships with their favorite brands and eager to engage with new media channels. This shows a powerful opening for loyalty marketers to build sustainable loyalty with the next generation of American consumers."

COLLOQUY comprises a collection of publishing, education and research resources devoted to the global loyalty-marketing industry.

The paper is available for a free download at www.colloquy.com/whitepapers.