nielsen's global retail loyalty-sentiment report

G E T W I T H T H E P R O G R A MCARD-CARRYING CONSUMER PERSPECTIVES ON RETAIL LOYALTY-PROGRAM PARTICIPATION AND PERKS

NOVEMBER 2016

2 GLOBAL RETAIL LOYALTY SENTIMENT REPORT

FAITHFUL FOLLOWERS OR FAIR-WEATHER FANS?

AROUND THE WORLD• Donewell,loyaltyprogramscanhelpdrivemorefrequentvisitsandheavierpurchasing.More

thansevenin10globalrespondents(72%)agreethat,allotherfactorsequal,they’llbuyfroma

retailerwithaloyaltyprogramoveronewithout.

• Morethanhalfofgloballoyalty-programparticipants(51%)sayproductdiscountsareamong

theirthreemost-valuedloyalty-programbenefits,followedbymonetaryrewardsintheformof

rebatesorcashback(45%).Genericdeals,however,createlittledifferentiation;retailersmust

focusonconnectingwithconsumerneedsanddeliveringgreatervalue.

• Monetaryrewardsareimportanteverywhere,butnon-monetaryrewardsresonatemorestrongly

insomeAfrican/MiddleEasterncountriesthanglobally.Examplesincluderecognitionas

avaluedcustomerinMorocco,EgyptandPakistanandcharitabledonationsinEgyptand

Morocco.

• Consumerscraveflexibleloyaltyprograms.Roughlyeightin10globalloyalty-program

participantssayitissomewhatorveryappealingtobeabletoearnrewardsregardlessof

whetherapurchasewasmadeinstore,onawebsiteoronamobiledevice(81%)andtochoose

amongseveraltypesofrewards(79%).

• DigitaltoolsandfeaturesareparticularlyappealinginAsia-Pacific,wherethehighest

percentageofloyalty-programparticipantsintheworldwidestudyrateasappealingstore-

specificloyaltymobileapps(69%),integrationwithdigitalpaymentsystems(78%)and

integrationwiththird-partyappsthatconsolidateloyalty-programinformation(63%).

3Copyright © 2016 The Nielsen Company

Whenitcomestoshopping,choiceistheoperativeword.Whether

consumersshopataspecialtyretaileroramassmerchandiser,ona

computeroramobiledevice,theyhaveneverhadsomanywaysto

pleasethepalate,discoverthedealorpaythepiper.Differentiatingyour

brandinsuchacrowdedspaceisnotonlycritical,butalsomoredifficult

thanever.

Aretailloyaltyprogramcanbeaneffectivewaytocreatecompetitive

advantagebyreducingcustomers’likelihoodtoswitchstores.Indeed,

morethansevenin10loyalty-programparticipantsinNielsen’sGlobal

Loyalty-SentimentSurvey(72%)somewhatorstronglyagreethat,all

otherfactorsequal,theywillbuyfromaretailerwithaloyaltyprogram

overonewithout.Loyaltyprogramscanalsohelpdrivemorefrequent

visitsandheavierpurchasing.Nearlythree-quartersofgloballoyalty-

programparticipants(74%)agreethatloyaltyprogramsmakethem

morelikelytocontinuedoingbusinesswithacompany,andtwo-thirds

(67%)agreethattheyshopmorefrequentlyandspendmoreatretailers

withloyaltyprograms.

Brick-and-mortarretailersarenottheonlyonesbenefitingfrom

loyalty-programparticipation.Two-thirdsofglobalrespondents(66%)

agreethey’dshopmoreatonlineretailersifthesesellersprovided

loyaltybenefitssimilartothoseoftraditionalin-storeretailers.And

increasingly,loyaltyprogramsareattheleadingedgeoftechnologyas

retailersincorporateadvancedanalytics,mobileexperiencesandother

digitalsolutionsintotheirprograms.

Andmanyshoppersappeartoloveloyaltyprograms.Infact,66%of

globalrespondentssaytheybelongtooneormoreprograms.Butthere

isoftenalargegapbetweenthenumberofprogramsinwhichshoppers

areenrolledandthenumberinwhichtheyactivelyparticipate.Sowhat

distinguishesthewinnersfromtherestofthepack?Whilemanytried-

and-trueretailloyalty-programfundamentalscanbeappliedanywhere

intheworld,therealsoareuniquedifferencesbycountry.Forexample,

mobileloyaltyappsareparticularlyappealinginIndiaandChina,while

non-monetaryretailloyaltyrewardprogramsareimportantinMorocco.

Knowingwhatprogramattributesresonatebestwithyourcustomerswill

equipyoutodriveengagement.

67% AGREE THAT THEY SHOP MORE

FREQUENTLY AND SPEND MORE AT

RETAILERS WITH LOYALTY PROGRAMS.


“Loyaltyprogramsareintendedtoultimatelyincreasearetailer’sshare

oftheconsumer’swallet,”saidLouiseKeely,executivevicepresident,

NielsenGlobalRetailPractice.“Butloyaltyprogramscannotbe

designedinaone-size-fits-allmanner.Therearebigdifferencesinloyalty

programpreferencesandhabitsacrosscountries,andacrossconsumer

groupswithincountries.Thesedifferencesincludehowconsumerswant

tousetechnologytoengagewiththeirloyaltyprogram,whattangible

benefitstheyareseekingfromloyaltyprograms,andevenhowmuch

theycareaboutloyaltyprograms.Retailersneedtodetermine whothey

wanttobringintothestoreorontothewebsitemore,anddesigna

loyaltyprogramforthem.”

TheNielsenGlobalRetailLoyalty-SentimentSurveypolledmorethan

30,000onlinerespondentsin63countriestounderstandwhatdrives

consumerstoparticipateinretailloyaltyprograms.Weexaminedself-

reportedparticipationrates,therewardsorbenefitsvaluedmost,and

thefeaturesthataremostappealingintheloyaltyprogramsofthe

future.Finally,weprovideinsightintothewaystobuildandmaintaina

winningloyaltyprogram.

ABOUT THE GLOBAL SURVEY METHODOLOGY

Thefindingsinthissurveyarebasedonrespondents

withonlineaccessin63countries.Whileanonlinesurvey

methodologyallowsfortremendousscaleandglobalreach,it

providesaperspectiveonthehabitsofonlyexistinginternet

users,nottotalpopulations.Indevelopingmarketswhere

onlinepenetrationisstillgrowing,respondentsmaybe

youngerandmoreaffluentthanthegeneralpopulationofthat

country.Inaddition,surveyresponsesarebasedonclaimed

behavior,ratherthanactualmetereddata.Culturaldifferences

inreportingsentimentarelikelyfactorsintheoutlookacross

countries.Thereportedresultsdonotattempttocontrolor

correctforthesedifferences;therefore,cautionshouldbe

exercisedwhencomparingacrosscountriesandregions,

particularlyacrossregionalboundaries.


MONEY MAKES THE LOYALTY PROGRAM GO ‘ROUNDItshouldcomeasnosurprisethatforthemajorityofrespondents,financialincentivesaretheprimaryreasonforparticipatinginloyaltyprograms.Two-thirdsofglobalrespondentswhoparticipateinloyaltyprograms(67%)somewhatorstronglyagreethattheyjointheseprogramsonlytogetfreeproductsordiscounts.Whenitcomestothemost-valuedloyalty-programbenefits,monetaryincentivestopthelistineveryregion,byawidemargin.Morethanhalfofgloballoyalty-programparticipants(51%)sayproductdiscountsareamongthethreemostvaluedbenefits,anddiscountsareparticularlypopularinEurope(62%).Fewerglobalprogramparticipants(45%)sayrebatesorcashbackareamongthemost-valuedbenefits,butcashbackisslightlymorepopularthandiscountsinNorthAmerica(49%versus46%)andLatinAmerica(48%versus47%).However,creatingmeaningfuldifferentiationrequiresofferingmorethangenericdeals.

“Whiletangiblediscountsareausagedriverforloyaltyprograms,share-drivingprogramsgofarbeyondthesebenefits,”saidKeely.“Tailoringloyaltybenefitsforspecificconsumers,andusingtheloyaltyprogramengagementvehicles—beitviaanapp,email,orin-storeinteraction—allallowretailerstopersonalizetheloyaltyprogramsothatit’snotjustadiscountvehicle.Providingadvice,tailoredofferings,andotherserviceswilldelighttheloyalty-programmember.Inthisway,thereisnooneloyaltyprogram—eachshopperwillhavehisorherownversionoftheprogram,tailoredtohisorspecificneeds.”

Financialrewardsarethemosthighly-valuedloyalty-programbenefitsformembersofallages,butproductdiscountsandcashbackorrebatesareratedhigherbyolderrespondentsthanbytheiryoungercounterparts.Youngerloyalty-programparticipantsvalueafewnon-monetarybenefitsmorehighlythantheiroldercounterparts,thoughthepercentageswhosaytheseareamongthetopthreebenefitsareratherlow.FifteenpercentofMillennialssayhigher-priorityservice,suchasfirst-classseatingorVIPcustomerserviceisoneoftheirtopthreeloyalty-programbenefits,morethandoublethepercentageofBabyBoomersandSilentGenerationrespondents(6%ofeachgroup)whosayso.Inaddition,12%ofMillennialssaytheirmost-valuedbenefitsincludepersonalizedproductsorserviceexperiences,and10%saythesameofcharitabledonations.TheseresponseratesaremorethanthreetimeshigherthanforBabyBoomers(3%foreachtypeofbenefits)andSilentGenerationrespondents(4%and3%,respectively).

FINANCIAL INCENTIVES DRIVE LOYALTY PROGRAM PARTICIPATION

PERCENTAGE WHO SAY BENEFIT IS AMONG THEIR THREE MOST-VALUED REWARDS

PRODUCT DISCOUNTS 51%

45%

33%

32%

22%

15%

13%

12%

12%

10%

7%

REBATES OR CASH BACK

FREE PRODUCTS

FREE SHIPPING

FREQUENT FLYER POINTS

EXCLUSIVE ACCESS TO

SALES OR MERCHANDISE

DISCOUNTED SHIPPING

HIGHER PRIORITY SERVICE

RECOGNITION AS A VALUED

CUSTOMER

PERSONALIZED PRODUCTS

OR SERVICE EXPERIENCES

CHARITABLE DONATION

MONETARY NON-MONETARY

Base: All respondents who are members of retail loyalty programs Note: Respondents could select top three benefits Source: The Nielsen Global Retail Loyalty-Sentiment Survey, Q1 2016

%


MILLENNIALS RATE MANY NON-MONETARY BENEFITS MORE HIGHLY THAN BOOMERS


PRODUCT DISCOUNTS



CUSTOMER


PERSONALIZED PRODUCTS OR SERVICE

EXPERIENCES

EXCLUSIVE ACCESS TO SALES OR

MERCHANDISE

CHARITABLE DONATION


FREE PRODUCTS

FREE SHIPPING

DISCOUNTED SHIPPING

Base: All respondents who are members of retail loyalty programs Note: Respondents could select top three benefitsSource: The Nielsen Global Retail Loyalty-Sentiment Survey, Q1 2016

MO

NET

AR

YN

ON

-MO

NET

AR

Y

48%

21%

12% 10%

12%15% 14%

41% 33% 32% 17%57%

24%

3% 3%

9%6% 14%

54% 33% 34% 9%

MILLENNIALS BOOMERS

%


FLEXIBILITY IS THE FUTURE OF RETAIL LOYALTYWhenitcomestotheloyalty-programfeaturesmembersarelookingfor,

flexibilityisveryimportant.Morethaneightin10globalloyalty-program

participants(81%)sayit’ssomewhatorveryappealingtobeableto

earnrewardsregardlessofwhetherapurchasewasmadeinstore,on

awebsiteoronamobiledevice.Slightlysmallershares(79%)citethe

abilitytochooseamongseveraltypesofrewards.Morethanthree-

quartersofgloballoyalty-programmembersratetwootherbenefitsas

appealing:personalizedpromotionsbasedonpastpurchasing(77%)

andtheopportunitytoearnbonusesbydoingsomespecifiedactivity

(76%).

“Anomnichannelexperienceisthenewrealityforconsumers,”said

Keely.“Retailerscan’tthinkoftheonlinebrowsingandin-storebuying

experienceasdisparateactivities.Loyaltyprogramsandtheengagement

withmembersshouldengageholisticallyacrossbrick-and-mortarand

digitalchannelsacrosstheentirepathtopurchase,notjustatcheck

out.”

Asadoptionofnontraditionalpaymentmethodsrises,loyalty

programsalsoshouldbeflexibleintermsofpaymenttype.Two-thirds

ofgloballoyalty-programparticipants(67%)sayintegrationwitha

mobilepaymentsystemissomewhatorveryappealing,sotheycan

automaticallyearnanduserewardswhentheyuseamobilewallet.

Mobile-walletintegrationisevenmoreappealinginAsia-Pacific(78%)

andLatinAmerica(75%)thanglobally.

“Mobilepaymentsplatformswillincreasinglyprovideanopportunityfor

loyalty-programengagementwithconsumers,providingaconvenient

andpersonalizedwayforprogrammembersandretailerstoengagewith

oneanotherallalongthepathtopurchase,”saidKeely.


MAKE LOYALTY PROGRAMS FLEXIBLE, PERSONAL AND REWARDING

PERCENTAGE OF GLOBAL RESPONDENTS WHO RATE THE FEATURE VERY OR SOMEWHAT APPEALING

FLEXIBILITY

PERSONALIZATION

REWARDS

TECHNOLOGY

Base:Allrespondentswhoaremembersofretailloyaltyprograms

Source:TheNielsenGlobalRetailLoyalty-SentimentSurvey,Q12016

POINTS OR REWARDS FOR PURCHASES MADE IN STORE, ON A WEBSITE OR ON A MOBILE DEVICE

THE ABILITY TO CHOOSE AMONG SEVERAL TYPES OF REWARDS

PERSONALIZED DISCOUNTS OR PROMOTIONAL OFFERINGS

PERSONALIZED PRODUCT OR SERVICE RECOMMENDATIONS

OPPORTUNITIES TO EARN BONUSES BY DOING SOME SPECIFIED ACTIVITY

POINTS OR REWARDS FOR REFERRALS

TIERED PROGRAMS WITH EXCLUSIVE REWARDS FOR CUSTOMERS IN A PARTICULAR LEVEL OR STATUS

INTEGRATION WITH MOBILE PAYMENT SYSTEM

POINTS OR REWARDS FOR SHARING PRODUCTS AND PAGES ON SOCIAL NETWORKS

STORE-SPECIFIC LOYALTY PROGRAM MOBILE APP

INTEGRATION WITH THIRD-PARTY APPS THAT CONSOLIDATE LOYALTY PROGRAM INFORMATION

81%

79%

77%

62%

76%

67%

60%

67%

62%

60%

51%

TECHNOLOGY-BASED LOYALTY-PROGRAM FEATURES ARE MUCH MORE APPEALING TO MILLENNIALS THAN BABY BOOMERS


80%

81%

79%

69%

81%

72%

69%

76%

72%

70%

63%

79%

75%

70%

45%

65%

51%

45%

48%

40%

40%

29%

Flexiblerewards,integrationacrosschannels,andpersonalized

promotionaloffersarehighlyappealingtorespondentsofallages.

However,notsurprisingly,youngerloyalty-programmembersaremore

likelythantheiroldercounterpartstorecognizetheappealofthese

features—particularlythoseregardingmobileorsocial-mediaintegration.

Base:AllrespondentswhoaremembersofretailloyaltyprogramsSource:TheNielsenGlobalRetailLoyalty-SentimentSurvey,Q12016

TECHNOLOGY-BASED LOYALTY-PROGRAM FEATURES ARE MUCH MORE APPEALING TO MILLENNIALS THAN BABY BOOMERS

PERCENTAGE OF GLOBAL RESPONDENTS WHO RATE THE FEATURE VERY OR SOMEWHAT APPEALING

FLEXIBILITY

PERSONALIZATION

REWARDS

TECHNOLOGY












MILLENNIALS BOOMERS


REGIONAL ROUNDUP

LOYALTY LANDSCAPE

AROUND THE WORLD


ASIA-PACIFIC: AN APPETITE FOR APPSInthemore-developedmarketsofAsia-Pacific,smaller-formatstores

(conveniencestoresandmini-markets)aretheprimaryretailgrowth

engines,asurbanshoppersincreasinglyseekconvenientoptions

compatiblewiththeiron-the-golifestyles.Meanwhile,large-formatstores

areincreasinglyreliantonpromotionstomaintainsalesgrowth,creating

aviciouscyclethatcanoftenresultinadeclineinsalesovertime.To

breakthecycleandtofindgrowthinatoughretailenvironment,retailers

lookingtofindacompetitiveadvantageareusingwell-designedloyalty

programsthatproviderelevantoffersthatdrivecustomerengagementand

incrementalrevenueopportunities.

RetailloyaltyprogramsarewellestablishedinSoutheastAsia,thePacific

andChina,datingbacktothemid-tolate1990s;inIndia,theywere

introducedinthelate2000s.Giventheirlonghistory,it’snosurprisethat

onlinerespondentsintheregionareavidloyalty-programmembers.More

thansevenin10consumerswithonlineaccessinIndiaandSoutheastAsia

saytheyparticipateinoneormoreretailloyaltyprograms(74%and72%,

respectively).Vietnam,NewZealandandAustraliahavethehighestself-

reportedratesofloyalty-programparticipationintheregion(84%,84%

and83%,respectively),followedcloselybyJapan(80%),Korea(77%)and

Malaysia(77%).ParticipationislowerinGreaterChina(61%),butChinese

retailersarenowfocusingmoreonloyaltyprogramsforseveralreasons.

First,e-commerceisgrowingfast,andoff-lineretailersareunderintense

pressuretoprotecttheirshare.Inaddition,slowingeconomicgrowth

ishurtingfast-movingconsumergoods(FMCG)retailers.Finally,more

Chineseconsumersarepayinggreaterattentiontothequalityofproducts

andtheoverallshoppingexperience.

Howdoloyalty-programparticipantsindicatethey’reamemberofthe

program?Itvariesbymarket.Presentingamembershipcardtobescanned

instoreisthemostcommonmethodinseveralofthemostmatureloyalty

markets,includingNewZealand(85%),Australia(81%)andJapan(62%).

DigitalmethodsaremorecommonlyusedinAsia.Lookinguptheaccount

byprovidinganassociatedphonenumberoremailaddressinstoreismost

commoninTaiwan(60%),Vietnam(60%)andIndia(52%),whilelogging

intoaretailerwebsiteisthemostcommonmethodinChina(51%)and

Indonesia(47%).Inafewmarkets,mobilehasemergedasthechannelof

choice.Usingaretailer’smobileappisthemostcommonlycitedmethod

inThailand(49%)andKorea(40%,tiedwithscanningthecardinstore).

China(47%)andIndia(45%)alsoexceedtheglobalaveragewhenit

comestotheuseofaretailer’smobileapp,aswellasthird-partyappsthat

consolidateprograminformation(39%and36%,respectively)andmobile

paymentsystems(38%and38%,respectively).

VIETNAM, NEW ZEALAND AND AUSTRALIA HAVE THE HIGHEST SELF-REPORTED RATES OF LOYALTY-PROGRAM PARTICIPATION IN ASIA-PACIFIC.


DIGITAL MEMBERSHIP METHODS ARE POPULAR IN EMERGING ASIAN MARKETS

HOW DO YOU INDICATE THAT YOU’RE A LOYALTY-PROGRAM MEMBER?

Scan card in store

Look up account by providing phone number, email address or other personal information in store

Enter information or log into account on retailer website

Use retailer's mobile app

Enter and store loyalty program information in a third-party app that allows me to store multiple reward cards in one place

Enter and store loyalty program information into digital payment system

TaiwanVietnam

IndiaIndonesia

ChinaThailand

Hong KongMalaysia

SingaporeSouth Korea

PhilippinesNew Zealand

VietnamChina

MalaysiaIndonesiaSingapore

ThailandIndia

PhilippinesHong Kong

TaiwanJapan

South Korea

ThailandChinaIndia

South KoreaVietnam

IndonesiaPhilippines

Hong KongSingapore

MalaysiaTaiwanJapan

AustraliaNew Zealand

China India

Vietnam South Korea

Indonesia Thailand Malaysia

Philippines Singapore

Taiwan Hong Kong

Australia Japan

New Zealand

China India

Thailand Indonesia Vietnam

Philippines Malaysia

Singapore Hong Kong

South Korea Taiwan

Australia Japan

New Zealand

0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100%

New Zealand Australia

Japan Philippines

Malaysia Singapore

Taiwan Vietnam

India China

South Korea Hong Kong

AustraliaJapan

New ZealandAustralia

IndonesiaThailand

Global Average Global Average Global Average


Note:MarketclassificationbasedonIMFdefinitions

Base:Allrespondentswhoaremembersofretailloyaltyprograms

Source:TheNielsenGlobalRetailLoyalty-SentimentSurvey,Q12016

OLD

ER M

ETH

OD

SN

EWER

MET

HO

DS

46%

42%

43%

32% 32%

45%

REGIONAL AVERAGE ADVANCED ECONOMIES DEVELOPING/EMERGING ECONOMIES


Digitalloyalty-programattributesorfeaturesareparticularlyappealing

intheregion.Asia-Pacifichasthehighestpercentageofloyalty-program

participantsintheworldwidestudywhosaystore-specificloyaltymobile

appsaresomewhatorveryappealing(69%versus60%globally).

MobileappsareparticularlyattractiveinIndia(80%),Thailand(78%)

andChina(74%).Integrationwithdigitalpaymentsystems(78%)and

withthird-partyappsthatconsolidateloyalty-programinformation

(63%)alsoaremoreappealingintheregionthanglobally(67%and

51%,respectively),withIndia,ChinaandThailandthemostenthusiastic

supporters.

Infact,mobilefeaturesaresohighlydesirablethatmorethantwo-thirds

ofloyalty-programmembersinAsia-Pacific(69%)somewhatorstrongly

agreethey’remorelikelytoparticipateinaloyaltyprogramifamobile

appisavailable,comparedwith56%globally.

“Undoubtedly,digitalstrategiesmustbeacorepartofanyretailer

loyaltyprograminAsia-Pacific,andweexpecttoseemoreinteractive

marketingwithcross-sellbyretailpartnersandincentivesbasedupon

physicallocation,”saidAlexMorgan,executivedirectorofgloballoyalty,

NielsenAsia-Pacific.

Withrespecttothemost-valuedbenefits,productdiscounts(51%)and

rebatesorcashback(45%)topthelistinnearlyallcountriesinthe

region.Theonlyexceptions:JapanandIndonesia,wherefreeshipping

(51%and45%,respectively)issecondbehindproductdiscounts(59%

and64%,respectively),andKorea,wherediscountsandfrequent-flier

pointsarevaluedequally(60%foreachbenefit).

OF LOYALTY-PROGRAM MEMBERS AGREE THAT THEY’RE MORE LIKELY TO PARTICIPATE IN A LOYALTY PROGRAM IF A MOBILE APP IS AVAILABLE.

69%


78%

81%

69%

73%

68%

71%

69%

63%


TECHNOLOGY-BASED FEATURES ARE HIGHLY DESIRABLE IN ASIA

PERCENTAGE WHO RATE THE LOYALTY PROGRAM FEATURE VERY OR SOMEWHAT APPEALING

FLEXIBILITY

PERSONALIZATION

TECHNOLOGY



TOP COUNTRIES IN THE REGION WHERE THIS

ATTRIBUTE IS APPEALING









TIERED PROGRAMS WITH EXCLUSIVE REWARDS FOR CUSTOMERS IN A PARTICULAR

LEVEL OR STATUS





CHINA 89%PHILIPPINES 86%INDIA 84%SINGAPORE 83%THAILAND 83%VIETNAM 83%

INDIA 86%THAILAND 86%PHILIPPINES 85%CHINA 83%TAIWAN 82%

CHINA 85%PHILIPPINES 85%INDIA 84%THAILAND 84%MALAYSIA 80%

BONUSES/STATUS

83%

79%

79%



INDIA 85%CHINA 84%THAILAND 80%PHILIPPINES 76%INDONESIA 75%


MONETARY LOYALTY REWARDS ARE HIGHLY VALUED IN ASIA-PACIFIC


PRODUCT DISCOUNTS

TOP COUNTRIES FOR SELECTED MONETARY

MOTIVATORS

PRODUCT DISCOUNTS


FREE SHIPPING

FREE PRODUCTS



EXCLUSIVE ACCESS TO SALES OR MERCHANDISE

RECOGNITION AS A VALUED CUSTOMER

TOP COUNTRIES FOR SELECTED NON-

MONETARY MOTIVATORS49%

44%

34%

29%

25%

16%

16%

15%

13%

13%

8%



EXCLUSIVE ACCESS TO


DISCOUNTED SHIPPING



CUSTOMER



CHARITABLE DONATION

FREE PRODUCTS

FREE SHIPPING

Base:AllrespondentswhoaremembersofretailloyaltyprogramsNote:RespondentscouldselecttopthreebenefitsSource:TheNielsenGlobalRetailLoyalty-SentimentSurvey,Q12016

INDONESIA 64%MALAYSIA 63%SINGAPORE 62%SOUTH KOREA 60%JAPAN 59%

TAIWAN 73%SINGAPORE 67%HONG KONG 61%MALAYSIA 60%CHINA 52%PHILIPPINES 52%

JAPAN 51%INDONESIA 45%VIETNAM 37%INDIA 36%SOUTH KOREA 36%

PHILIPPINES 45%INDONESIA 43%NEW ZEALAND 41%MALAYSIA 40%THAILAND 37%

SOUTH KOREA 60%AUSTRALIA 37%CHINA 32%JAPAN 27%VIETNAM 26%

VIETNAM 21%INDIA 20%INDONESIA 19%CHINA 17%PHILIPPINES 17%

JAPAN 26%SOUTH KOREA 24%TAIWAN 23%THAILAND 18%SINGAPORE 16%

NEW ZEALAND 20%INDIA 18%PHILIPPINES 18%VIETNAM 16%AUSTRALIA 13%SINGAPORE 13%


%

TECHNOLOGY-BASED FEATURES ARE HIGHLY DESIRABLE IN ASIA


EUROPE: NAVIGATING A LONG-STANDING LOYALTY LABYRINTHLoyaltyprogramsarewellestablishedinEurope,andprogramscanbe

quitecomplex.Someretailersofferstand-aloneprograms,whileothers

arepartofcoalitionprogramsthatspanmultipleretailers.Someeven

offermultipleprograms,providingtime-limitedpromotionsinaddition

totheirownprogramsorparticipationinaloyaltycoalition.

Nearlytwo-thirdsofonlinerespondentsinEurope(66%)saythey

belongtooneormoreloyaltyprograms.Participationratesvarywidely,

however.WhileEuropehassomeofthehighestself-reportedratesin

theworldwidestudy,italsohassomeofthelowest.Ninety-fourpercent

ofrespondentsinFinland,90%intheU.K.and89%inLithuania

andSloveniasaytheyparticipateinaloyaltyprogram,thehighest

percentagesinthestudy.However,fewerthanhalfofrespondentsin

Kazakhstan(41%)andDenmark(49%)saytheybelongtooneormore

programs.Andparticipationisn’tmuchhigherinRussia(53%),Turkey

(54%),theNetherlands(54%)orUkraine(55%).

Whenitcomestothemethodsloyalty-programparticipantsuseto

indicatemembership,scanningacardinastore—citedby69%of

Europeanrespondents—isthemostcommonmethodusedinevery

countryintheregion.Butit’sparticularlydominantinsomemarkets,

suchasFinland,wherethismethodiscitedby93%ofloyalty-program

participants,followedbyIreland(84%),Latvia(84%),theU.K.(82%),

theCzechRepublic(80%)andAustria(80%).However,in-storecard

scanningisthemainmethodusedbyminoritiesofloyalty-program

participantsinothercountries,includingTurkey(49%),Spain(45%)and

Israel(41%).InTurkey,nearlyasmanyrespondents(48%)saytheway

theyindicatethey’realoyalty-programmemberisbyprovidingpersonal

informationinstore;inIsrael,usingaretailer’smobileappisaclose

second(40%).InSpain,nearlyone-third(31%)saytheirusualmethodis

loggingintoanaccountonline.


Mobile-basedusagemethodsareconsiderablylesscommoninmost

Europeancountries.Thisfindingisconsistentwithfindingsabout

otherconsumerbehaviors:Mature-marketconsumersaregenerally

slowertoadoptnewdigitaltechnologiesforpayments,onlineshopping,

andsocialmedia.Lessthanone-fifthofEuropeanloyalty-program

participants(18%)saytheyusearetailer’smobileapptoindicatethey’re

aprogrammember,andlessthanone-tenthsaytheystoremembership

informationinthird-partyappsormobilewallets(7%each),thelowest

levelsglobally.Retailermobileappsaremorepopularintwoofthe

marketswiththelowestuseofphysicalcards:Israel(40%)andTurkey

(38%).Turkeyalsohasthehighestself-reporteduseofthird-partyapps

inEurope(17%),followedbyIreland(14%)andRomania(13%).

“Loyaltyprogramsmustembracechanneldiversity,sincetheycanbe

avitalenablerinpreventingthebasket-splittingbehaviorsthatare

affectingretailrevenues,”saidAdrianBaker,retailproductleader,

Nielsen.“Customersareshoppingonline,usingmobileapps,and

benefitingfromdeliveryoptions,suchasclickandcollect,allactivities

wheretheirloyaltycardcanbeautomaticallylinkedtotheaccount.

Ofcourse,thedistinctionbetweendigitalandin-personshoppingis

importanttounderstand,butretailersreallyneedtodeterminethe

driversofthatchangeinordertosetstrategiestowininthiscrucial

battleground.Thisiswheretheuniqueidentifierforeachmemberofa

loyaltyschemeplayssuchanimportantrole.”


OLD-SCHOOL METHODS DOMINATE IN EUROPE


Scan card in store Use retailer's mobile app

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% FinlandIreland

LithuaniaUnited Kingdom

AustriaCzech Republic

ItalyCroatia

Latvia Belgium

NetherlandsGermanyHungarySwedenSlovenia

DenmarkEstonia

SwitzerlandSlovakiaNorway

Portugal Belarus Greece

Romania Ukraine

Russia Serbia

France Poland

Bulgaria Kazakhstan

Turkey Spain Israel

Global Average Global Average

Israel Turkey

Portugal Norway

Serbia Switzerland

Romania Bulgaria

Spain Greece Croatia Russia

Slovenia Austria

Ukraine Belarus

Kazakhstan Poland

Netherlands Sweden

United Kingdom Denmark

Italy Slovakia

Germany Czech Republic

Finland France

Belgium Ireland

Hungary Lithuania

Latvia Estonia

OLDER METHODS NEWER METHODS

Note:MarketclassificationbasedonIMFdefinitionsBase:AllrespondentswhoaremembersofretailloyaltyprogramsSource:TheNielsenGlobalRetailLoyalty-SentimentSurvey,Q12016

REGIONAL AVERAGE ADVANCED ECONOMIES DEVELOPING/EMERGING ECONOMIES


Enter and store loyalty program information in a third-party app that allowsme to store multiple reward cards in one place



REGIONALAVERAGE

REGIONALAVERAGE

GLOBALAVERAGE

GLOBALAVERAGE

24% 7%

29% 7%

36% 23%

39% 23%

69% 18%


Monetaryrewards,particularlyproductdiscounts,arequiteenticing

forEuropeanloyalty-programparticipants.Sixty-twopercentofloyalty-

programmembersintheregionsayproductdiscountsareamong

theirthreemostvaluedbenefits,thehighestpercentageinthestudy

byawidemargin(thenext-highestpercentageis49%inAsia-Pacific).

Productdiscountsarethemost-preferredbenefitinthemajorityof

countriesinEuropewithafewexceptions:Rebatesorcashbackare

preferredinGreece(68%),Hungary(68%)andtheScandinavian

countriesofFinland(70%),Norway(59%),Sweden(58%)andDenmark

(55%).RespondentsinItalyandSwitzerlandhaveequalpreferences

forproductdiscountsandrebatesorcashback(58%foreachtypeof

benefitinItalyand56%inSwitzerland).

Acrosstheregionasawhole,fewloyalty-programparticipantsinclude

non-monetarybenefitsamongtheirtopincentives,butthesebenefits

areimportantinsomemarkets.Whileonly14%ofEuropeanparticipants

sayexclusiveaccesstosalesormerchandiseisamongtheirmost-valued

benefits,thisbenefitisamongthemostvaluedfor55%ofrespondents

inFinland,37%inPortugal,31%inUkraine,28%inBelarusand27%

inRussia.Recognitionasavaluedcustomerismorehighlyvaluedin

Ireland(20%)andtheU.K.(20%)thaninEuropeasawhole(10%).

Likewise,only6%ofEuropeanrespondentssayhigher-priorityservice

isamongtheirtopthreebenefits,butthepercentageplacingitinthe

topthreeistriplethatnumberinTurkey(18%)andatleastdoublein

Kazakhstan(16%),Ukraine(15%)andIsrael(12%).


MONETARY PERKS DOMINATE IN EUROPE


PRODUCT DISCOUNTS


MOTIVATORS

PRODUCT DISCOUNTS


FREE SHIPPING

FREE PRODUCTS







46%

38%

25%

17%

14%

10%

9%

6%

6%

5%


FREE PRODUCTS

FREE SHIPPING


EXCLUSIVE ACCESS TO


% DISCOUNTED SHIPPING



CHARITABLE DONATION


CUSTOMER



UKRAINE 87%RUSSIA 85%BELARUS 82%KAZAKHSTAN 82%CZECH REPUBLIC 79%ESTONIA 79%CROATIA 79%

FINLAND 75%GREECE 68%HUNGARY 68%SLOVENIA 67%AUSTRIA 63%GERMANY 63%

AUSTRIA 40%SPAIN 39%ROMANIA 39%SLOVAKIA 38%TURKEY 37%BELARUS 37%

CROATIA 57%NETHERLANDS 52%POLAND 49%BELGIUM 47%SPAIN 44%ITALY 44%

DENMARK 47%GREECE 45%FRANCE 44%ESTONIA 43%SWEDEN 41%

TURKEY 18%KAZAKHSTAN 16%UKRAINE 15%ISRAEL 12%BULGARIA 9%

FINLAND 55%PORTUGAL 37%UKRAINE 31%BELARUS 28%RUSSIA 27%

UNITED KINGDOM 20%IRELAND 20%NETHERLANDS 15%TURKEY 15%SWITZERLAND 13%SERBIA 13%KAZAKHSTAN 13%



Likemostloyalty-programparticipantsaroundtheworld,themajority

ofEuropeanmemberswanttoearnrewardsacrosschannelsand

chooseamongseveralredemptionoptions.Three-quartersofEuropean

loyalty-programparticipantsrateeachofthesefeatures(75%and74%,

respectively)assomewhatorhighlyappealing.Alsohighlyratedare

personalizedpromotionaloffers(citedby72%)andbonusopportunities

(71%).

“PersonalizationisthefutureofloyaltyprogramsinEurope,anditwill

beapowerfultoolforbreakingthepromotion-dependencycyclethatis

soprevalentintheregion,”saidPetrKriklan,directorofretailanalytics,

CentralandEasternEurope,Nielsen.“Personalizationisstillinits

nascentstages,however,andmanyretailershaven’tfullydetermined

howtobestusetheirdatatoensurethey’rereachingtheright

customers.Rather,theyexecutesimplemass-segmentstrategiesthat

aren’treflectiveofindividualneedsandpreferences.Tomoveloyalty

programsforward,retailersneedtoadvancetheiranalyticscapabilities

byimprovingtheirinternalcapabilitiesandpartneringwithexperts

whocanprovideevenricherdataandpowerfultoolsthatenabletrue

customization.”

Tieredprogramsandmobilefeaturesaresignificantlylessenticing

inEuropethanglobally.LessthanhalfofEuropeanloyalty-program

participantssaytieredprogramswithexclusiverewardsforcustomers

who’veachievedaparticularlevelorstatusareappealing(47%).Similar

percentagessayastore-specificmobileapp(47%)orintegrationwith

amobilepaymentsystem(49%)isappealing.Butthereareclear

exceptionstotheregionaltrend.

Mobileappsareextremelyappealinginseveraloftheemerging

Europeanmarkets,includingUkraine(81%),Russia(80%),Kazakhstan

(74%)andTurkey(73%).Mobile-walletintegrationisalsoratedmore

favorablyinthesemarketsandafewothers.Eightypercentofloyalty-

programparticipantsinTurkey,72%inKazakhstan,67%inSerbiaand

Greece,65%inBelarusandRussia,and64%inUkrainesayintegration

withamobilepaymentsystemisappealing.

Integrationwithathird-partyappthatconsolidatesloyalty-program

informationhasverylimitedappealinEurope;only28%saythisfeature

isappealing.Likeretailerappsandmobilewallets,however,thisfeature

ismoreattractiveinTurkey(62%),Serbia(41%),Romania(38%)and

Greece(37%).Bulgaria(37%)alsoexceedstheregionalaverage.


49%

74%

55%

47%

47%

44%

28%


TECHNOLOGY-BASED FEATURES HAVE ROOM TO GROW IN EUROPE


FLEXIBILITY

PERSONALIZATION

TECHNOLOGY














LEVEL OR STATUS





CROATIA 83%TURKEY 83%SERBIA 83%GREECE 81%HUNGARY 80%ROMANIA 80%BELARUS 80%KAZAKHSTAN 80%

TURKEY 87%CROATIA 84%ISRAEL 81%PORTUGAL 81%SERBIA 81%

BELARUS 88%RUSSIA 87%UKRAINE 87%SERBIA 87%KAZAKHSTAN 85%

BONUSES/STATUS

71%



TURKEY 80%KAZAKHSTAN 72%GREECE 67%SERBIA 67%RUSSIA 65%BELARUS 65%

75%

49%

72%


AFRICA/MIDDLE EAST: FINDING VALUE IN PERSONALIZED PERKSJustoverhalfofonlinerespondentsinthesixcountriessurveyedinAfrica/

MiddleEast(55%)saytheybelongtooneormoreloyaltyprograms,but

participationratesvarydramatically.ParticipationishighestinSouth

AfricaandtheUnitedArabEmirates,wheremorethanthree-quartersof

respondentssaythey’remembersofretailloyaltyprograms(84%and77%,

respectively).InEgyptandPakistan,however,lessthanhalf(45%and38%,

respectively)saytheyparticipateinaretailloyaltyprogram.

“InAfricaandtheMiddleEast,participationinretailloyaltyprogramsis

closelytiedtothestrengthofmoderntrade,”saidCraigHenry,managing

director,RetailerVertical,AfricaandMiddleEast,Nielsen.“Moderntrade

isstillinagrowthphase,withveryearly-stagedevelopmentinmany

countriesintheregion.ThehighmembershiprateinSouthAfricaspeaks

totherelativelylonghistoryofloyaltyprogramsandhighpenetrationin

themarket.InEgypt,however,loyaltyprogramsandmoderntradearestill

intheirinfancy,andpenetrationislowerduetohigherratesofshoppingat

traditionaltradeoutletsandpressureonconsumerspending.”

Justasdiversearethewaysloyalty-programparticipantsindicatethey’re

members.SouthAfricahasoneofthehighestincidencesofphysicalcard

useintheworld(82%),whileEgypthasoneofthelowestrates(26%).

Roughlyone-thirdofloyalty-programparticipantsineverycountryin

theregionlookuptheiraccountbyprovidingaphonenumberoremail

addressinstore,andit’sthemostcommonlyusedmethodinEgypt(35%).

Inaddition,morethanthreein10programmembersineverycountry

intheregionexceptSouthAfricasaytheyenterinformationorloginto

theiraccountonaretailerwebsite.Infact,that’sthemostcommonly

usedmethodinMoroccoandSaudiArabia,citedby39%and36%of

respondents,respectively.InSouthAfrica,only21%saytheylookuptheir

accountinstorebyprovidingpersonalinformation.

Theuseofaretailer’smobileappismorecommoninPakistan(33%)than

theothercountriesintheregion(25%onaverage).Fewerthanone-fifth

ofAfrica/MiddleEasternloyalty-programparticipantshaveenteredtheir

programinformationinamobilewallet(19%)orthird-partyapp(16%),


buttheuseofmobilewalletsisnotablyhigherinMorocco(25%),which

alongwiththeUnitedArabEmiratesalsohasabove-averageuseofthird-

partyapps(21%and25%,respectively).

“Technologyadoptionratesandtheageoftheloyaltyprogrampossibly

playaroleinthewayinwhichretailersengagewithshoppers,”said

Henry.“Thenewertheprogram,thelesslikelyitistobecardbased.”

A MIX OF OLD AND NEW METHODS ARE USED IN AFRICA/MIDDLE EAST


NEW

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Base:Allrespondentswhoaremembersofretailloyaltyprograms Source:TheNielsenGlobalRetailLoyalty-SentimentSurvey,Q12016

53%

25%

23%

Scan card in store






0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

South Africa United

Arab EmiratesUnited

Arab Emirates

UnitedArab Emirates

UnitedArab Emirates

Pakistan

Saudi Arabia

Egypt

Morocco

Global Average

Morocco

Saudi Arabia

Pakistan

Egypt

South Africa

Global Average

Egypt

Pakistan

Saudi Arabia

United Arab Emirates

South Africa

Morocco

Global Average

Pakistan

South Africa

Morocco

Egypt

Saudi Arabia Global Average

21%

17%

16%

14%

13%

Morocco

Saudi Arabia

Pakistan

Egypt

South Africa Global Average

Morocco

Pakistan

Egypt

Saudi Arabia

South Africa Global Average

UnitedArab Emirates

46%

25%

31%

16%

33%

19%

REGIONAL AVERAGE


MonetaryrewardsaremorehighlyvaluedinSouthAfricathaninthe

restofthecountriesintheregion.Nearlysevenin10SouthAfrican

loyalty-programparticipantssayrebatesorcashback(69%)orproduct

discounts(67%)areamongtheirtopthreerewards—responseratesthat

are24and16percentagepointsabovetheglobalaverage,respectively.

Whilefinancialincentivesareimportanteverywhere,non-monetary

rewardsareimportanttoanotableportionofrespondentsinthe

region.Recognitionasavaluedcustomerismoreimportantin

Morocco,EgyptandPakistanthanglobally.Infact,inMoroccothis

attributeislistedasthethirdmostvaluedbenefit,citedby26%of

loyalty-programparticipants,thehighestpercentageglobally.Twenty-

onepercentinEgyptand20%inPakistansayrecognitionisamong

thetopthreerewardsvaluedmost.Moroccoalsohasthelargest

percentageofrespondentsinthestudywhosaypersonalizedproducts

andexperiencesareamongthemost-valuedbenefits(18%versus10%

globally),andithasthesecond-highestpercentageofrespondentswho

saycharitabledonationsareamongthemost-preferredrewards(19%),

trailingonlyEgypt(21%).Higher-priorityservicealsoisvaluedmorein

Moroccothanglobally(18%versus12%,respectively).

“Inthemarketswheremodern-tradepenetrationislower,loyalty-

programmemberstendtobemoreaffluentandmorewillingtogive

backtothoseinneed,”saidHenry.“InAfricanandMiddleEastern

countrieswhereMuslimpopulationsaremoreprevalent,wefind

retailershaveloyaltyprogramsthatpromotecharitablegiving,whichis

coretoIslamicvalues.”

OF LOYALTY-PROGRAM PARTICIPANTS IN MOROCCO SAY RECOGNITION AS A VALUED CUSTOMER IS AMONG THEIR THREE MOST VALUED REWARDS, THE HIGHEST PERCENTAGE GLOBALLY.

26%


%

NON-MONETARY REWARDS ARE IMPORTANT TO A NOTABLEPERCENTAGE IN AFRICA/MIDDLE EAST



MOTIVATORS

PRODUCT DISCOUNTS

FREE PRODUCTS



41%

38%

27%

18%

14%

13%

12%

11%

11%

10%

FREE PRODUCTS

FREE SHIPPING

DISCOUNTED SHIPPING




CHARITABLE DONATION

PRODUCT DISCOUNTS


EXCLUSIVE ACCESS TO




CUSTOMER


SOUTH AFRICA 67%PAKISTAN 45%UNITED ARAB EMIRATES 42%SAUDI ARABIA 38%EGYPT 23%MOROCCO 18%


SOUTH AFRICA 69%UNITED ARAB EMIRATES 45%SAUDI ARABIA 38%EGYPT 35%MOROCCO 29%PAKISTAN 19%

FREE SHIPPING

PAKISTAN 39%EGYPT 33%SAUDI ARABIA 29%MOROCCO 25%UNITED ARAB EMIRATES 20%SOUTH AFRICA 17%

SOUTH AFRICA 43%EGYPT 41%UNITED ARAB EMIRATES 38%PAKISTAN 38%MOROCCO 33%SAUDI ARABIA 29%


UNITED ARAB EMIRATES 28%SAUDI ARABIA 16%MOROCCO 16%EGYPT 13%PAKISTAN 13%SOUTH AFRICA 9%


MOROCCO 18%PAKISTAN 15%SAUDI ARABIA 12%UNITED ARAB EMIRATES 11%EGYPT 10%SOUTH AFRICA 5%

CHARITABLE DONATION

EGYPT 21%MOROCCO 19%SAUDI ARABIA 13%UNITED ARAB EMIRATES 8%SOUTH AFRICA 8%PAKISTAN 6%


MOROCCO 26%EGYPT 21%PAKISTAN 20%SAUDI ARABIA 14%SOUTH AFRICA 14%UNITED ARAB EMIRATES 13%



Theappealofvariousloyalty-programfeaturesinAfrica/MiddleEast

largelymirrorsthegloballist.Cross-channelintegrationandflexible

rewardsaremostenticing(73%each),whilepersonalizedpromotional

offers(72%)andtheopportunitytoearnbonusesbycompletinga

specifiedactivity(71%)followcloselybehind.Sentimentissimilar

acrossthesixcountriessurveyedintheregion.

73%

63%

65%

58%

61%

58%

48%


A WELL-MIXED BALANCE OF FEATURES IS IMPORTANT IN AFRICA/MIDDLE EAST


FLEXIBILITY

PERSONALIZATION

BONUSES/STATUS

TECHNOLOGY
















LEVEL OR STATUS





SOUTH AFRICA 84%UNITED ARAB EMIRATES 72%EGYPT 72%PAKISTAN 70%SAUDI ARABIA 68%MOROCCO 58%

SOUTH AFRICA 81%PAKISTAN 78%UNITED ARAB EMIRATES 72%SAUDI ARABIA 72%EGYPT 69%MOROCCO 56%

SOUTH AFRICA 78%PAKISTAN 77%UNITED ARAB EMIRATES 72%EGYPT 68%SAUDI ARABIA 67%MOROCCO 61%

SOUTH AFRICA 71%PAKISTAN 69%SAUDI ARABIA 67%EGYPT 65%UNITED ARAB EMIRATES 63%MOROCCO 56%

66%

71%

72%

73%


LATIN AMERICA: ROOM FOR LOYALTY-PROGRAM GROWTHLatinAmericahasthelowestself-reportedloyalty-programparticipation

ratesinthesurvey.LessthanhalfofLatinAmericanonlinerespondents

(44%)saytheybelongtooneormoreloyaltyprograms.Participation

ishighestinBrazil(53%)andlowestinArgentina(32%),Mexico(32%)

andVenezuela(33%).Thelowerincidenceisdueinparttothestrength

oftraditionaltradeintheregion,whichaccountsformorethanhalfof

retailsales.Loyaltyprogramsaremostcommoninlarge-formatgrocery

stores(hyper-andsupermarkets)anddepartmentstores.Stand-alone

retailer-specificprogramsarecommon,whilemultiformatretailersallow

shopperstocollectandredeempointsinanyoftheirformats.Stillother

retailersparticipateincoalitionloyaltyprogramsthatspanmultiple

brands.

“Themainretailersineverycountryhavealoyaltyprogram,butthere

isroomforsignificantgrowthintheregion,”saidGiovannaMarquez,

RetailAnalyticsleader,NielsenLatinAmerica.“Moreandmoreretailers

arebuildingloyaltyprograms,andsomeareintegratingpayment

systemsintotheirloyaltyprogramswiththeirowncreditcards,giving

memberstheabilitytoearnadditionalpointsandreceivespecialoffers

whentheyusetheretailer’scard.”

Themostcommonwayloyalty-programparticipantsindicatethey’re

membersisbyenteringinformationorloggingintoanaccountona

retailerwebsite,citedby42%ofLatinAmericanrespondents.Theone

exceptionisMexico,wherethemostcommonmethodisscanninga

cardinastore.Scanningacard—citedby34%ofLatinAmericanloyalty-

programmembers,wellbelowtheglobalaverageof53%—isthesecond

mostcommonmethodintheregion.Aboutthreein10respondentssay

theylookuptheiraccountbyprovidingatelephonenumberoremail

addressatthepointofsale(29%)orusearetailer’smobileapp(28%).

Theuseofthird-partyappsandmobilewalletstostoreloyalty-program

informationisbelowtheglobalaverageinnearlyeverycountryinthe

region,withparticularlylowuseforbothmethodsinArgentina(10%

and8%,respectively).However,theuseofmobilewalletsexceedsthe

globalaverageinVenezuela(25%).


SIGNIFICANT ROOM FOR LOYALTY PROGRAM GROWTH IN LATIN AMERICA


Scan card in store






Chile Venezuela

Peru

Colombia

Brazil

Argentina

Mexico

Argentina Venezuela

Brazil

Colombia

Chile

Peru

Mexico

Peru Mexico

Venezuela Brazil

Chile

Colombia

Argentina

Venezuela Brazil

Colombia Mexico

Peru

Argentina

Chile

Venezuela Brazil Peru Chile

Mexico

Colombia

Argentina

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

Mexico Brazil

Argentina

Colombia

Peru

Chile

Venezuela Global Average Global Average Global Average


NEW

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34%

28%

29%

14%

42%

16%

REGIONAL AVERAGE


Whileuseofthird-partyappsandmobilewalletstoindicateloyalty-

programmembershipiscurrentlybelowtheglobalaverageintheregion,

thesetoolswilllikelybeveryimportantindrivingloyalty-programgrowthin

thefuture.Indeed,interestinthesefeaturesinLatinAmericaisamongthe

highestinthestudy.Technology-basedfeaturesareparticularlyappealing

inVenezuela,MexicoandBrazil.Eighty-fourpercentofVenezuelanloyalty-

programparticipantssaymobile-paymentintegrationissomewhator

veryappealing,and76%ofMexicanandBrazilianrespondentsand73%

ofColombianrespondentsrateitasappealing.Thesesamecountries

alsostandoutwithrespecttostore-specificmobileapps.Three-quarters

ofVenezuelan(75%)and69%ofMexicanandBrazilianloyalty-program

membersratetheseappsasappealing.Inaddition,sixin10Brazilian,

MexicanandVenezuelanrespondents(60%,59%and59%,respectively)

sayintegrationwiththird-partyappsthatconsolidateloyalty-program

informationisappealing.


75%

86%

68%

80%

63%

73%

66%

54%


A COMBINATION OF LOYALTY-PROGRAM FEATURESIS APPEALING IN LATIN AMERICA


FLEXIBILITY

PERSONALIZATION

TECHNOLOGY














LEVEL OR STATUS





MEXICO 90%CHILE 87%VENEZUELA 87%BRAZIL 86%COLOMBIA 84%ARGENTINA 82%PERU 80%

BRAZIL 86%COLOMBIA 84%MEXICO 84%VENEZUELA 84%PERU 84%CHILE 82%ARGENTINA 81%

VENEZUELA 90%BRAZIL 86%COLOMBIA 86%MEXICO 85%PERU 81%CHILE 78%ARGENTINA 67%

BONUSES/STATUS

86%

85%

84%



VENEZUELA 84%MEXICO 76%BRAZIL 76%PERU 75%COLOMBIA 73%CHILE 69%ARGENTINA 62%


LatinAmericanretailersofferavarietyofrewards,fromearning

pointsthatcanberedeemedorusedasmoneytospecialpricesand

discountdaysforloyalty-programmembers.Some,especiallyhigh-end

retailers,arealsoofferingnon-monetaryincentivesinadditiontothe

typicalpointsprogram.Sowhichrewardsaremosthighlyvaluedby

consumers?

Asineveryotherregion,thefavoritesarerebatesorcashback(48%)

andproductdiscounts(47%).Rebatesorcashbackareparticularlywell

receivedinColombia(56%)andMexico(53%),butproductdiscounts

arelessprizedinMexico(40%)thanintheregionasawhole.Fourin10

loyalty-programparticipantsinLatinAmerica(40%)sayfreeproducts

areamongthetopthreebenefits,thehighestpercentageglobally,but

freeproductsarelesshighlyvaluedinVenezuela(27%)thanelsewhere

intheregion.Justoverone-thirdofLatinAmericanrespondents(34%)

sayfreeshippingisamongtheirthreemostvaluedbenefits,withthe

highestpercentagesinBrazil(39%)andChile(37%).

Afewnon-monetaryrewardsarevaluedmorehighlyinselectedmarkets

thanintheregionasawhole.Roughlythreein10loyalty-program

participantsinMexico(32%),Chile(29%),Venezuela(29%)andPeru

(28%)sayexclusiveaccesstosalesormerchandiseisamongthemost-

valuedbenefits.Inaddition,recognitionasavaluedcustomercangoa

longwayinVenezuela,where24%ofrespondentssayit’samongtheir

topthreebenefits,thesecond-highestpercentageglobally.Finally,14%

ofBrazilianrespondentssaycharitabledonationsareamongtheirmost-

valuedbenefits,doubletheglobalaverage(7%).

4 IN 10 LOYALTY-PROGRAM PARTICIPANTS IN LATIN AMERICA SAY FREE PRODUCTS ARE AMONG THEIR MOST VALUED BENEFITS, THE HIGHEST PERCENTAGE GLOBALLY.


MONETARY REWARDS ARE HIGHLY VALUED IN LATIN AMERICA


PRODUCT DISCOUNTS


MOTIVATORS

PRODUCT DISCOUNTS






47%

40%

34%

21%

10%

9%

8%

7%

7%


FREE PRODUCTS

FREE SHIPPING


EXCLUSIVE ACCESS TO




CHARITABLE DONATION

% DISCOUNTED SHIPPING


CUSTOMER



ARGENTINA 51%BRAZIL 49%VENEZUELA 49%COLOMBIA 47%CHILE 47%PERU 44%MEXICO 40%

COLOMBIA 56%MEXICO 53%ARGENTINA 49%CHILE 48%PERU 47%BRAZIL 45%VENEZUELA 41%

FREE SHIPPING

BRAZIL 39%CHILE 37%VENEZUELA 31%MEXICO 30%ARGENTINA 28%PERU 28%COLOMBIA 26%

FREE PRODUCTS

ARGENTINA 46%BRAZIL 41%COLOMBIA 41%MEXICO 41%CHILE 39%PERU 35%VENEZUELA 27%

ARGENTINA 24%BRAZIL 24%PERU 20%CHILE 19%COLOMBIA 17%VENEZUELA 17%MEXICO 15%

CHARITABLE DONATION

BRAZIL 14%VENEZUELA 11%MEXICO 9%ARGENTINA 7%COLOMBIA 6%PERU 5%CHILE 4%


MEXICO 32%CHILE 29%VENEZUELA 29%PERU 28%COLOMBIA 26%ARGENTINA 21%BRAZIL 8%

VENEZUELA 24%PERU 15%COLOMBIA 11%ARGENTINA 10%CHILE 9%BRAZIL 7%MEXICO 7%


18%


NORTH AMERICA: AWASH IN LOYALTY PROGRAMSNorthAmericahashadloyaltyprogramsacrossretailfordecades,soit

shouldcomeasnosurprisethattheregionhasthehighestself-reported

ratesofprogramparticipationinthestudy.Morethaneightin10Canadian

andU.S.respondents(85%and84%,respectively)saytheybelongtoone

ormoreretailloyaltyprograms.

Aswe’veseeninothermaturemarkets,scanningacardinstoreisby

farthemostcommonwayshoppersindicatetheyareloyalty-program

members,thoughthismethodismorecommoninCanada(79%)than

theU.S.(62%).U.S.membersaremorelikelythantheirCanadian

counterpartstolookuptheiraccountbyprovidingtheirphonenumberor

emailaddressinstore(34%versus19%)orbyloggingintotheiraccount

online(34%versus26%).Inbothcountries,respondentsindicatelowuse

ofretailerorthird-partymobileappsandmobilewallets.


OLDER METHODS DOMINATE IN NORTH AMERICA


Scan card in store






0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

Canada

United States

United States

Canada

United States

Canada

United States

Canada

United States

Canada

United States

Canada


Global Average Global Average Global AverageNEW

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64%

23% 17% 13%

32% 33%

REGIONAL AVERAGE


MONETARY PERKS ARE STRONGLY PREFERRED IN NORTH AMERICA




MOTIVATORS

PRODUCT DISCOUNTS




MONETARY MOTIVATORS

49%

46%

35%

35%

20%

16%

13%

9%

8%

5%

4%

PRODUCT DISCOUNTS

FREE PRODUCTS

FREE SHIPPING


EXCLUSIVE ACCESS TO


DISCOUNTED SHIPPING


CUSTOMER


CHARITABLE DONATION




FREE SHIPPING

FREE PRODUCTS




CANADA 55%UNITED STATES 48%



UNITED STATES 37%CANADA 21%






%


Rebatesorcashbackarethemost-valuedloyalty-programrewardin

bothCanadaandtheU.S.(55%and48%,respectively).Freeproducts

areaclosesecondinCanada(54%),whileproductdiscountstake

secondplaceintheU.S.(46%).U.S.membersalsovaluefreeshipping

morethantheirCanadiancounterparts(37%versus21%,respectively).

Flexiblerewardsandtheabilitytoreceivepointsacrosschannelsare

widelyappealinginboththeU.S.andCanada.Roughlyeightin10U.S.

andCanadianrespondentsidentifyeachofthesebenefitsassomewhat

orveryappealing:82%and78%,respectively,saysoabouttheability

tochooseamongseveraltypesofrewards,and81%and78%sayso

aboutpointsawardedforpurchasesregardlessofwheretheywere

made.Personalizeddiscountsorpromotionalofferingsbasedonpast

purchasingalsoareappealinginbothcountries(76%intheU.S.and

70%inCanada).

Mobilefeaturesandsocial-mediaintegrationhavenarrowerappealin

NorthAmerica.However,they’reratedmorefavorablyintheU.S.than

inCanada.Roughlyhalfofloyalty-programparticipantsintheU.S.and

fourin10inCanadasayastore-specificmobileapp(47%and38%,

respectively)orintegrationwithamobilepaymentsystem(49%and

39%,respectively)isappealing.Roughlyfourin10U.S.respondents

(38%)andthreein10Canadianrespondents(28%)sayintegration

withthird-partyappsthatconsolidateloyalty-programinformationis

appealing.Whilemobilefeaturesmayhavesomewhatlimitedappeal

currently,it’slikelythatthey’lldramaticallyshapetheloyaltyprogramsof

thefuture.

“Theretailloyaltyprogramsofthefuturewillbeprecise,personal,

andgearedtowhatconsumersreallywant,”saidRussellMackey,vice

president,RetailRelations,NielsenCatalinaSolutions.“Wethinkabout

loyaltyprogramsaspersonalizedbecausetheyappeartoberelevant

totheshopper,butmanyretailershaven’tevenscratchedthesurface

whenitcomestorealizingtheirfullpotential.Bigdata(inconjunction

withtechnology)andvariousrelationshipsandcollaborationsthatallow

retailerstoofferindividualizeddealsbasedonacustomer’sbuying

habitsandpurchasehistorywillenableloyaltyprogramsthatarehighly

tailoredtoindividualshoppers.”



NORTH AMERICAN LOYALTY-PROGRAM MEMBERS CRAVE FLEXIBILITY


81%













82%

81%

75%

53%

66%

56%

51%

48%

46%

46%

37%

FLEXIBILITY

PERSONALIZATION

TECHNOLOGY












BONUSES/STATUS


STRATEGIES FOR SUCCESS: DATA IS AT THE HEART OF ANY WINNING LOYALTY PROGRAMTheultimategoalofanyloyaltyprogramistoprovideacompellingvalue

propositionthatkeepsconsumerscomingbacktimeaftertime.How

canretailerscreatevaluable,differentiatedloyaltyprograms?Strategies

shouldbedrivenbyadeepunderstandingofyourconsumers’shopping

decisionprocess,andthenprogramscandesignedtobringthemback

againandagain.

Measure and monitor performance.Loyaltyprogramscanbeusedto

drivebetterbusinessdecisions,aswellastorefineprogramoffers.But

todoboth,loyaltyprogramdatamustbetoolsforretailerlearning.

Researchcostspreventmanyretailersfromfullyassessingwhethertheir

programsmeettheobjectiveofincreasingconsumershareofwallet,but

theimportanceofdatacannotbeoverstatedandwillonlycontinueto

grow.Thefutureliesinintegration—combininggranular,internalloyalty

datawithrichcontextualmediaandmarketdatatomakemoreinsightful

decisions.

Use segmentation tools.Understandwhichconsumergroupsloyalty

programsreallymattertoandwhy.Theexecutionofanyloyalty

programshouldallowforpersonalizationanddynamiclearning,butthe

initialdesignshouldbegearedtowardservingtheconsumerswhose

behaviorwillbemostinfluenced,andasegmentationanalysiswillhelp

identifythoseconsumers.

Personalize the shopping experience.Winningloyaltyprograms

understandthateverycustomerisanindividualandthatsuccesscomes

fromgivingcustomerswhattheywant,notwhattheretailerwants.

Programoffersthatareuniquetotheshoppinghabitsofeachconsumer

cannotonlydrivebrandaffinity,buttheycanalsosendasignalto

thecustomerthattheyarevaluedpatrons.Infact,personalization

deepenstheshopper-retailerrelationship,enhancingengagementand

encouragingshopperstoreturnagainandagaintoredeem theiroffers.


Provide offers customers value. Retailersneedtousethebreadthofdataavailablethroughtheirloyaltyprogramsandpredictiveanalyticsto

identifythepromotionstowhichashopperismostlikelytorespondand

toestablishaone-to-onecommunicationschannel,providingshoppers

offerstheycaremostaboutinthechanneltheymostprefer.While

biggerfamiliesmaybeenticedbybuy-one-get-one-freedealsorstock-up

offerings,oldercustomersmaypreferspecialsavingsdayswhenstore

trafficislighter.

Differentiate your offering.Howisyourloyaltyprogramdifferentthan

yourcompetitors’?Giveshoppersacompellingreasontovisityourstore

ratherthananother.Considerexclusiverewardsandin-storeexperiences

thatareuniquetoyourlocationorbrandpositioningandmakeit

engagingandfuntoparticipateforallgenerationsofconsumers.

Leverage technology wisely.Advancementsintechnologyandthe

proliferationofmobiledevicesallowretailerstoprovidemorerelevant,

timelyoffersthaneverbefore,andmanyconsumersareenthusiastic

aboutintegratingtheirdigitaldeviceswithloyaltyprograms.Buta“build

itandtheywillcome”approachtodigitalintegrationisn’tthatsimple.

Retailersmustleveragedigitaltoolsthatcreatevalueforconsumers,

anddigitalinteractionsmustbealignedwithhowmuchorhowlittle

consumerswanttobecontacted.Consideranopt-inprogram,whereby

consumersindicatetheleveloffrequencytheywishtoreceivedigital

communications.

Consider non-monetary rewards.Financialincentivesareamust-have,

butnon-monetaryincentivesarethedifferentiatorofloyaltyprograms,

andcanbuildtherelationshipbetweenretailersandshoppers.Retailers

lookingforwaystoengageinmoredirectinteractionswithconsumers

couldtryrewardingmembersforreferralsorinteractingwiththebrand

onsocialmedia.Evenbetter,retailerscouldusetheirloyaltyprograms

forbrandbuilding,incentivizingactivitiesthatfitwiththeirbrandimage

orexpertise.Forexample,brandsthatwanttoestablishorcementa

reputationasaleaderinthehealth-and-wellnessspacecouldreward

consumersformeetingexerciseorhealthgoals,whilethosethatwant

tosolidifythemselvesassociallyresponsiblecouldconsiderrewarding

consumersforvolunteering,makingcharitabledonationsorchoosing

moreenvironmentallyfriendlyoptions.Aboveall,programsshouldbe

alignedwiththemoreimportantprioritiesandvaluesofconsumers.


COUNTRIES IN THE GLOBAL SURVEY

MARKET INTERNET PENETRATION

Australia 93%

China 52%

HongKong 80%

India 37%

Indonesia 34%

Japan 91%

Malaysia 68%

NewZealand 94%

Philippines 53%

Singapore 81%

South Korea 92%

Taiwan 84%

Thailand 60%

Vietnam 52%

ASIA-PACIFIC


Egypt 37%

Morocco 61%

Pakistan 18%

SaudiArabia 65%

SouthAfrica 49%

UnitedArabEmirates

92%

AFRICA/MIDDLE EAST


Canada 93%

UnitedStates 87%

NORTH AMERICA

EUROPE


Austria 83%

Belarus 59%

Belgium 85%

Bulgaria 57%

Croatia 75%

CzechRepublic 80%

Denmark 96%

Estonia 84%

Finland 94%

France 84%

Germany 88%

Greece 63%

Hungary 76%

Ireland 83%

Israel 73%

Italy 62%

Kazakhstan 54%

Latvia 82%

Lithuania 82%

Netherlands 96%

Norway 96%

Poland 68%

Portugal 68%

Romania 56%

Russia 71%

Serbia 66%

Slovakia 83%

Slovenia 73%

Spain 77%

Sweden 95%

Switzerland 87%

Turkey 60%

UnitedKingdom 92%

Ukraine 43%


LATIN AMERICA

Argentina 79%

Brazil 68%

Chile 80%

Colombia 59%

Mexico 56%

Peru 59%

Venezuela 62%

Source:MiniwattsMarketing,Internet World Stats,June30,2016(EuropeisupdatedthroughNov.30,2015),www.internetworldstats.com


ABOUT THE NIELSEN GLOBAL SURVEYTheNielsenGlobalLoyalty-SentimentSurveywasconductedMarch1-23,

2016,andpolledmorethan30,000onlineconsumersin63countries

throughoutAsia-Pacific,Europe,LatinAmerica,theMiddleEast/Africa

andNorthAmerica.Thesampleincludesinternetuserswhoagreed

toparticipateinthissurveyandhasquotasbasedonageandsexfor

eachcountry.Itisweightedtoberepresentativeofinternetconsumers

bycountry.Becausethesampleisbasedonthosewhoagreedto

participate,noestimatesoftheoreticalsamplingerrorcanbecalculated.

However,aprobabilitysampleofequivalentsizewouldhaveamargin

oferrorof±0.6%atthegloballevel.ThisNielsensurveyisbasedonly

onthebehaviorofrespondentswithonlineaccess.Internetpenetration

ratesvarybycountry.Nielsenusesaminimumreportingstandard

of60%internetpenetrationoranonlinepopulationof10millionfor

surveyinclusion.

ABOUT NIELSENNielsenHoldingsplc(NYSE:NLSN)isaglobalperformancemanagement

companythatprovidesacomprehensiveunderstandingofwhatconsumers

watchandbuy.Nielsen’sWatchsegmentprovidesmediaandadvertising

clientswithTotalAudiencemeasurementservicesforalldevicesonwhich

content—video,audioandtext—isconsumed.TheBuysegmentoffers

consumerpackagedgoodsmanufacturersandretailerstheindustry’sonly

globalviewofretailperformancemeasurement.Byintegratinginformation

fromitsWatchandBuysegmentsandotherdatasources,Nielsenalso

providesitsclientswithanalyticsthathelpimproveperformance.Nielsen,

anS&P500company,hasoperationsinover100countries,coveringmore

than90%oftheworld’spopulation.

Formoreinformation,visitwww.nielsen.com.

Copyright©2016TheNielsenCompany.Allrightsreserved.Nielsenand

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Trademarks,L.L.C.Otherproductandservicenamesaretrademarksor

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nielsen's global retail loyalty-sentiment report

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