Since the pandemic started in the U.S. two years ago, earning and retaining customer loyalty has been crucial for brands to be successful and differentiate themselves from their competition.
Now it’s even more important.
According to our recently released 2022 Customer Loyalty Data Study: What Are the True Drivers of Loyalty in the Minds of Consumers?, nearly 70% of respondents say their favorite brands are part of who they are.
Also, 24% of those respondents strongly believe their favorite brands impact their respective identities.
This is a massive opportunity for brands to strengthen their customer relationships because, as the data study shows, when consumers are loyal to your brand, they take it very seriously.
From a loyalty perspective, in the fourth third quarter we saw:
- Brands use early product access as a loyalty program benefit.
- Kroger launch a pilot two-tiered premium loyalty program.
- Dick’s Sporting Goods and Nike integrate their loyalty programs.
- McDonald’s surpass 21 million members in its MyMcDonald’s Rewards program.
Early Product Access Is Now a Key Loyalty Program Perk for Brands
As brands face increased competition amid heightened consumer expectations, a key loyalty program perk that’s become quite popular is early product access.
During the fourth quarter, Walmart announced that Walmart+ members would have earlier access to Black Friday deals over non-members. Walmart+ members received four extra hours to shop its online Black Friday events throughout November — including deals on brands like Samsung, Reebok, Apple, and Keurig, among others.
Similarly, Best Buy’s launch of its new membership program, TotalTech, which costs $199 and will offer members exclusive shopping windows, as well as year-round tech support.
Our CEO Tom Caporaso wasn’t surprised by the moves from Walmart and Best Buy.
He explained in an interview with Modern Retail, “This [TotalTech] could be a huge motivator for initial enrollees that want to get their hands on premium items before the anticipated ‘out of stock’ labels hit”.
It’s a great way to showcase these two premium loyalty programs.
For retailers looking to market their premium loyalty programs, the more perks the better. “All these perks show that the program can pay for itself quickly,” Tom said.
Kroger Launched a New Premium Loyalty Program that Gives Customers What They Want
Kroger officials hope their pilot premium loyalty program, Boost by Kroger Plus, will retain more loyal customers to its brand.
The two-tiered premium loyalty program costs $59.99 annually and members can receive delivery of online orders within 24 hours. For the $99.99 annual cost tier, members receive delivery of online orders within two hours.
Also, the program offers members perks such as double fuel points and a welcome kit worth more than $100 at sign-up.
Our CEO explained why Kroger’s new loyalty program offers an intriguing pricing model in a recent Chain Store Age article.
“The Kroger Boost program pilot has great timing, especially as gas prices continue to soar to high levels,” Tom explained. “According to Clarus research, 41% of consumers said that they would be willing to pay for a premium loyalty program that provided gas perks, and Kroger’s extra points can help reduce some of those growing gas bills. This seems to be an unprecedented choice, as most brands either offer a traditionally free loyalty program or one price tagged premium option, like Walmart+, Amazon Prime or Best Buy Total Tech.”
Dick’s and Nike Show Why Loyalty Program Partnerships Could Be the Future
Dick’s Sporting Goods and Nike integrated their loyalty programs during the fourth quarter.
Nike’s loyalty program links to Dick’s membership allowing consumers to shop for exclusive Nike shoes and apparel on Dick’s website. This partnership will grow over time to include in-person workout events at Dick’s locations.
Sarah Mensah, VP and General Manager of Nike’s North America division said: “We have a very diverse set of consumers at Nike, and we need to be able to serve that diverse group of consumers. We really believe that it represents the future of retail … and this is really what partnership means — to the next level.”
Last March Dick’s launched its own men’s athleisure line called VRST, which continued a trend that saw more investments in its own private-label brands.
Dick’s CEO Lauren Hobart said the partnership would “unlock a whole new tier for us. “It will continue to drive that brand relevance that Dick’s has some of the best shoes in the marketplace. … We’re now partnering on this longer-term road map with Nike.”
Strategic loyalty program partnerships will become more popular because they benefit both brands and expand the frequency and variety of rewards for their respective members.
These partnerships serve customers better and add more potential benefits.
McDonald’s Eclipsed 21 Million Loyalty Program Members
McDonald’s launched its MyMcDonald’s Rewards loyalty program in July 2021 and has surpassed 21 million members.
The program awards members 100 points for every dollar spent. When a member reaches 1,500 points, he or she can redeem them for a hash brown, a vanilla cone, a cheeseburger, or a McChicken sandwich. At 3,000 points, members can earn a member medium order of french fries, a sausage burrito, a large iced coffee, or a six-piece Chicken McNuggets.
It marked the company’s first loyalty program in its 66-year history. The launch came amid company efforts to focus on technology and implementing digital menu boards and self-order kiosks across its storefronts.
The program also offers menu item suggestions and deals at order kiosks, the mobile app, and digital menu boards at the drive-thru. Members will even be referred to by name when entering the drive-thru lane.
Brands Launch Loyalty Programs Offering Convenience and Value
Unlike 2020 when retailers lived in a more reactive mode, 2021 saw them more proactive regarding customer loyalty.
Seventy-five percent of consumers tried a new shopping habit since COVID-19 started in the U.S. in March 2020. Retailers realize that engaging and valuable loyalty programs can be a key point of differentiation among their competitors.
McDonald’s is 66 years old, but that’s not too old to launch its first-ever loyalty program.
Gap launched a new integrated rewards program in the U.S. and Puerto Rico to simplify and streamline how members can earn and redeem their rewards among the company’s four brands. It also creates opportunities for members to give back by donating to one of the company’s five charitable funds.
Taco Bell is testing a new subscription-based service for loyal customers while David’s Bridal launched an industry-first loyalty program that is having great success in its early stages.
Consumers have spoken and retailers have responded by launching or revamping loyalty programs that are simple and offer convenience and value.