Loyalty Programs: Another Key To Retailers’ Online Success

According to Larry Freed, CEO of ForeSee Results, there were three drivers of retailers’ online success this past holiday season: 1) free shipping; 2) product reviews; and 3) promotional emails.

He missed one: Rewards programs.

According to research that Epsilon has done on the influences of consumers’ holiday season purchases, consumers that are members of retailers’ loyalty programs were not only unusually loyal to those firms, but were avid shoppers on their Web sites.

Some of the relevant data points:

  • 57% of loyalty program members said that program membership influenced which firms they purchased from. And among those with income greater than $50k, half said that they used their loyalty cards frequently or with every purchase.
  • 84% of the loyalty program members of the electronic firms we asked about purchased from those firms this past holiday season. Other types of retailers, like department stores and booksellers, saw impressive loyalty from their reward program members, as well.
  • 32% of consumers who belong to three or more retailers’ reward programs shopped at all of the firms whose program they’re enrolled in.
  • 63% of the consumers that belong to rewards programs shopped online this past holiday season. In contrast, of the consumers that don’t belong to any loyalty programs, just 35% shopped online.

One last point for retailers to keep in mind: While many of these valuable customers purchased online, direct mail was cited as a bigger influence on where they shopped than interactive media like banner ads on Web sites.

I’ll be publishing a white paper on this research shortly, and will update this post when it’s available on the Epsilon site.

Update: Get the white paper here.

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2 thoughts on “Loyalty Programs: Another Key To Retailers’ Online Success

  1. Interesting data – do you have any insight as to how much more customers with loyatly cards spend online with these stores?

    the 4th point bothers me a little. 63% of people who are in reward programs shopped online vs. just 35% of those who weren’t members suggests to me demographic differences. How much of this difference was because this group had access to different resources and how much was because they wern’t loyal? Do you have data on this. It would be very powerful if demographics weren’t the driver.

  2. Pingback: Analytical Engine » How can a Retailer Exploit Loyalty Program Data

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