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June, 2024

Aussies reluctant to hand data to retail loyalty programs: new report from Power Retail and ALA

A new report from Power Retail and the Australian Loyalty Association (ALA) has revealed that nearly 60% of Australians are reluctant to share their data with retailers.

The report, based on a survey of over 2,800 shoppers and an exploration of 44 retail-specific loyalty programs, was released on Wednesday 19th June 2024. It delves into consumer rewards program preferences and highlights the challenges brands face, including the discomfort shoppers feel in sharing their data with retailers.

Increased consumer awareness around data security, following multiple recent data breaches from prominent Australian companies, has driven this sentiment. The report found that consumers overwhelmingly prefer email communications from retailers (81%), while SMS marketing has fallen out of favour due to concerns around data scams.

Popular loyalty programs include Woolworths Everyday Rewards and Coles Flybuys, which offer discounts on spending, full payment of reward items using points, and cashback on spending. The report suggests a significant opportunity for retailers to reward customer loyalty and invest in long-term customer relationships by understanding and adapting to their ever-changing needs.

“Whilst data security is a major concern for consumers, it offers a key opportunity for retailers to adapt and re-build trust with their customers. An up-front approach that communicates clearly with consumers about where and how they use their data and the measures they take to protect customer data, can go a long way to building consumer trust and create opportunities for more personalisation, enhancing loyalty programs in ways that most benefit their customers,” said Rosalea Catterson, Editor of Power Retail.

“Retailers that help shoppers easily earn, access and use rewards incentives to ease financial strains stand themselves in a strong place to gain favour with shoppers and achieve long-term loyalty. To achieve this, retailers need to focus on the most reported satisfaction drivers: easy-to-understand schemes, easy-to-use apps and website tools, as well as strong clear customer communication, all of which help to build trust and brand loyalty,” said Grant Arnott, CEO and Founder of Power Retail.

The report found that 67% of Gen Z respondents believed that loyalty programs provided a high level of value and had the highest engagement with loyalty programs out of any generation surveyed. The top-ranked loyalty programs across all retail categories surveyed include Woolworths Everyday Rewards, Coles Flybuys, MYER One, Amazon Prime, Priceline Sister Club, MECCA Beauty Loop, and Sephora Beauty Pass among others.

“Loyalty is a game-changer for retail, a means to create substantially and more value for customers. These insights show that while the appetite for loyalty from consumers is strong, there is substantial opportunity for growth and improvement for retailers who are prepared to invest in the right strategies and technology to deliver loyalty excellence,” said Arnott.