We recommend reading the PDF version of the report.
Shopper behavior evolves over time, and (perhaps you’ve heard?) 2020 rapidly accelerated that change. With online shopping increasing a full 60% in 2020, an important shift is likely top of mind for retailers. Shoppers are prioritizing, over all else, what online shopping enables—instant access, options for a wider assortment of products, and competitive pricing.
Nearly 40% of consumers shop with more brands than they did a year ago, and 46% of shoppers report that they’re less loyal even to the brands they love, according to a revealing report from Quibit. When it takes just a new tab on desktop or another tap on mobile to enter another ecommerce store or marketplace, shopping simultaneously across multiple brands becomes simple and quick. Today, it’s the default behavior for most shoppers, creating the next wave of shoppers who want what they want, when they want—and it matters less who they get it from.
Retention for the next wave of shoppers is as challenging as ever because loyalty is as fleeting as ever. When shoppers invest their loyalty in a brand, they expect the brand to invest back in them. 70% of shoppers report that loyalty is influenced by a company’s understanding of their needs and 71% of shoppers feel frustrated when their shopping experience isn’t personalized.
The good news? This challenge provides new opportunities for retailers to implement a personalized, customer-centric strategy in order to build loyalty with the next wave of shoppers.
Bolt commissioned a survey among US shoppers to identify how and why they participate in loyalty programs, how they measure the value of rewards, and how their engagement with loyalty programs shifted across 2020. The result is this Bolt Consumer Report that takes a deep dive into the dramatic survey findings and aims to provide actionable insights to retailers so they can build a winning loyalty strategy for the next wave of shoppers in 2021 and beyond.
Growth across the board for ecommerce loyalty programs
Shoppers reported more participation in loyalty programs in 2020. Over one third of respondents earned and redeemed more rewards in 2020 vs. 2019, and 16% of shoppers signed up for new programs. Those numbers of course correlate with the overall growth of ecommerce sales, which were most influenced by changing shopper behavior (more time at home) and retailers’ day-to-day (less or no traffic in brick and mortar stores).
Room for even more growth
Most shoppers (84%) participate in loyalty programs, and there’s no small appetite for engagement. Half of respondents (50%) report that, when shopping online, they’re more likely than not to join a loyalty program. Furthermore, 58% of shoppers say there is no limit to or they aren’t sure what their limit is to joining loyalty programs, indicating that shoppers aren’t saturated. That could be good news for retailers trying to get more customers to join a new program.
Why shoppers join (and why they stick around): it’s the bottom line.
Whether it’s member pricing, coupons, or the ability to redeem points toward a purchase, shoppers report that paying less than the sticker price is the #1 value add of loyalty programs (followed by free shipping and free products). Discounts are the top reason why shoppers would join a new program and the most important value-add that causes them to stick around.
It’s not exactly a surprise that the results are almost unanimous. Exclusive in-store events and other white glove perks might have been on the rise, but temporary or permanent store closures over the course of 2020 put a damper on those perks.
To shoppers, loyalty must be worth it
The respondents have spoken, and the next wave of shoppers does not care for fees. The top reason why 70% shoppers would not join a new program is if they have to pay for it. The top reason why they’d cancel an existing program is because “it costs too much.” Valuing paid loyalty programs like Amazon Prime are the exception, not the rule.
Loyalty attracts loyalty and encourages more purchases
Consistent, loyal behavior encourages more loyal behavior. Over half of shoppers (51%) are likely to join a program only if they plan to shop with a retailer on a regular basis. And loyal behavior generates more revenue; 58% of shoppers are more likely to make additional, incremental purchases if they’re part of a loyalty program. It’s a virtuous cycle when done right.
Opportunities for furniture, kitchen, and gardening retailers
With ‘work from home’ jobs expected to double this year, it’s safe to say that retailers selling items for around the house will see an increase in repeat purchases. However, shoppers report the least loyalty program engagement with those types of businesses; sellers of office, furniture/home decor, gardening, and kitchen products are at the bottom of the list [see the next slide]. As we confirm the value of loyalty programs in 2021 and beyond, it’s a chance for new industries to take note—and perhaps roll out new loyalty programs of their own.
A survey of 1281 randomly selected U.S. adults was conducted on January 25-26, to determine how shoppers perceive retailer loyalty programs. Respondents, who are representative of all US adults (aged 18+), were asked 15 questions about perceived value, perks, and changing behavior in 2020 vs. previous years, among others.
The survey was commissioned by Bolt and executed by YouGov.
Bolt is building a network of millions of happy shoppers by making online buying fast, safe and easy. Our Checkout Experience Platform connects shoppers with retailers in a unified cross-brand network. Bolt tackles the problems retailers face through optimizing conversions at checkout, managing hundreds of integrations and the rising risk of fraud. Bolt is a future-proof solution that increases conversions by 60% through our network of shoppers.
Bolt is a lightweight layer that can be implemented with all of the major platforms.
For more information visit bolt.com and follow @bolt on Twitter.