The 2024 Loyalty Insights Report reveals Aussies are shopping with value in mind, but fashion loyalty programs have lots of room for improvement.
Power Retail’s extensive retail industry knowledge and insights has been combined with expert loyalty knowledge from the Australian Loyalty Association (ALA) to produce The 2024 Loyalty Insights Report, a comprehensive 40-page report detailing the Australian loyalty landscape, and what consumers think of it.
In developing this report, Power Retail and the ALA surveyed 2,811 engaged Australian shoppers, of which 2,486 were active members of loyalty and rewards programs.
The study includes data and opinions surrounding 44 retail-specific loyalty programs with shopper demographics covering all Australian states and generational age ranges.
The research reveals that 73 percent of Australians are members of fashion and department store loyalty programs. It's a competitive market for fashion retail loyalty as the average number of fashion and department store loyalty programs these members actively participate in is just two.
Only 15 percent of shoppers have a preferred brand, whereas 57 percent consider two to three brands when shopping for fashion.
Seventy one percent of shoppers say loyalty programs in the fashion & department store category are important to their purchase decision.
Cotton On & Co.’s Cotton On Perks loyalty program is the most popular in the fashion category, with 14.7 percent of all respondents active members. Its popular amongst all age groups, ranking as the fifth most popular overall loyalty program for Gen Z (following Everyday Rewards, Flybuys, Mecca Beauty Loop, and My Dan’s), seventh overall for Millennials, eighth place for Gen X, and ranking twelfth for Baby Boomers.
Rebel Active, Bonds & Me, and Country Road’s loyalty program all ranked highly among the most popular fashion loyalty programs.
“Our report reveals that a promising 84 percent of Australians are members of a retail loyalty program, with 63 percent expressing satisfaction with their membership,” said David Fear, Head of Data at Power Retail. “However, despite these positive membership and satisfaction rates, the average Net Promoter Score (NPS) stands at just 9, indicating that many retail loyalty programs still face significant challenges in generating excitement and strong advocacy among Australian consumers.”
Overall, the net promoter score (NPS), an indicator of how likely a consumer is to recommend a company, product, or service to a friend or colleague, reached +9 across all loyalty programs. The fashion category has the lowest NPS score among loyalty programs with a shocking -8 points.
These metrics suggest an incredible opportunity for retailers to engage customers through loyalty programs while creating a meaningful point of difference from the competition. Particularly in this category where nearly a third of shoppers have no brand preference, retailers can engage shoppers with value-driven rewards programs that drive long-term customer loyalty.
“Our analysis explores the pivotal roles that brand, product, and loyalty programs play in cultivating consumer loyalty and fostering lasting relationships,” says Sarah Richardson, CEO, Australian Loyalty Association.
“Our goal is to equip decision-makers with critical insights into what matters most to their customers and to establish essential benchmarks that are often missing. Through this report, we aim to provide our members with an impartial understanding of consumer perspectives on loyalty programs within the Australian market, empowering them to devise bold strategies and agile solutions for acquiring and retaining their most valuable customers.”
The report reveals the following advice for retailers looking to refine their strategy:
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Help shoppers make tangible savings on frequently purchased items.
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Understand your customers and their generational preferences.
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Leverage rewards programs to gain brand preference.
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Use loyalty programs to increase AOV and acquisition.
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Create trust through clear communication.
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Help shoppers get more from their rewards.
“Loyalty is a game-changer for retail, a means to create substantially more value for and from customers,” said Grant Arnott, CEO & Founder of Power Retail. “These insights show that while the appetite for loyalty from consumers is strong, there is substantial opportunity for growth and improvement for retailers prepared to invest in the right strategies and technologies to deliver loyalty excellence.”
For more advice, data, and insights from real shoppers, download The 2024 Loyalty Insights Report here.