COVID-19 changed everything for retail and pushed consumers online.
Earning customer loyalty is harder than ever because consumers are trying new brands and changed shopping habits. In fact, nearly two-thirds of consumers say their loyalty is more difficult for retailers to maintain than ever before.
But new data collected in the 2021 Premium Loyalty Data Study found premium loyalty program members shopped more with their favorite retailers and showed they are the most valuable.
A premium loyalty program gives members exclusive offers, cash back savings, and more benefits that make their lives easier 24/7. That’s why they are willing to pay an annual membership fee for expanded and instant benefits.
Because of the value they give to members, premium loyalty programs (and the retailers that offer them) remain top of mind to members.
Here’s why these programs have played a big role in helping retailers during the pandemic.
How COVID Pushed More People Online and Created Heightened Expectations
Last year an IBM report showed that COVID-19 accelerated the shift away from physical stores to digital shopping by about five years. This statistic helped brands with strong digital loyalty strategies, while it hurt those who didn’t employ them.
The pandemic made curbside pickup a household phrase and caused consumers to search and shop online almost exclusively. This new paradigm also impacted consumer behavior across the board, perhaps permanently.
Seventy-five percent of consumers have tried a new shopping habit since COVID-19 started in the U.S. 15 months ago.
The pandemic changed everything about your customers, how they live, how they connect, and how quickly they adapt to change.
With such an emphasis on convenience and value, with infinite options for consumers, retailers are finding it much harder to retain customer loyalty due to the pandemic.
Instant gratification has become more important to consumers now than pre-pandemic.
Consumers want everything now. And that’s where the value of premium loyalty comes into play as well.
When consumers receive instant gratification from a loyalty program, that brand remains top of mind.
Consumers Tried More Brands During the Pandemic
One of the biggest retail takeaways in the past 15 months is nearly half (49%) of consumers tried shopping with a new brand since March 2020, according to our 2021 Premium Loyalty Data Study.
The major shift to online shopping made trying new brands quite simple for consumers. This fact contributed to the harsh reality that earning customer loyalty is harder to achieve for retailers.
But when you talk about premium loyalty members, they are fiercely loyal to their favorite retailers and serve as brand advocates.
Nearly 90% of premium loyalty members would recommend a retailer to family or friends if the retailer’s premium loyalty program offers valuable benefits.
And that’s very important as brands slowly emerge from the pandemic.
Consider that nearly three-quarters (73%) of consumers shopped more with retailers whose premium loyalty programs they were part of during the pandemic, and 41% shopped significantly more with those retailers.
This kind of loyalty is exactly what retailers search for during any time.
Why the Pandemic Shows Premium Loyalty Members Are Your Most Valuable
Since the pandemic started, the biggest thing consumers have craved is convenience.
Premium loyalty programs remove inconveniences for consumers.
By removing inconveniences from the shopping experience, your premium loyalty program will remain top of mind for your members.
Your premium loyalty members enjoy benefits that remove inconveniences, including not having to wait for discounts because they’re instant, free shipping, and members-only sales.
Premium members are so devoted to their respective brands that 90% say they’re likely to choose a retailer where they’re a premium loyalty member over another one offering a lower price.
Your premium loyalty members aren’t more valuable because of the annual fee they pay to join the program. They’re more valuable because they engage with your brand more, spend more, and advocate for you with family and friends.
Consider that 51% of retailers with premium loyalty programs say members are 4x as valuable as non-members. This statistic alone shows how you can differentiate your brand with a premium loyalty program.
All Stats Point Toward Premium Loyalty
Paying members of loyalty programs can be worth several times more than non-paying members, besides revenue from membership fees themselves, according to McKinsey.
McKinsey also found that premium loyalty members are:
- 62% more likely to spend with your brand
- 60% more likely to spend more on your brand versus 30% with a free program
- 43% more likely to shop weekly
Members of CVS CarePass, the brand’s premium loyalty program, spend four times as much as non-CarePass customers.
The pandemic pushed consumers online, created more competition and urgency among retailers.
Premium loyalty members spend more, engage more, and advocate more. What more could a brand want from a loyalty program?