Loyalty programs are certainly one of the 2014’s top retail trends. Whole Foods was one of the latest chains to introduce loyalty programs with discount rewards in order to shed its image as a whole paycheck. The average US household has 18 memberships to loyalty programs and L2’s Insight Report on Loyalty Programs finds that retail is the category most eager to take advantage of this trend. Retail loyalty programs increased by 53% between 2008 and 2012, from 677 to 1,035. Of retail sub-categories, Department Stores experienced the most growth (109%) in loyalty programs in the past four years.
But as the number of loyalty programs increases, so does the need to differentiate. Basic plans have demonstrated a high turnover rate, despite the fact that investors tend to reward companies them hoping they will bring profit in the near future. Mobile apps, data-driven offer segmentation, and email communications are particularly valuable tools for brands to use. For more on how brands are updating their rewards strategy, download a segment of the L2 report.