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Loyalty Cards Could Spur Private Label Purchases

August 28, 2012
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New research done exclusively for PLBuyer finds that loyalty cards could entice some customers to buy more private label products.

Loyalty cards could entice customers to buy more private label products, according to new research done exclusively for PLBuyer by Consumer Science, a Dallas/Ft. Worth-based consumer research firm.

More than 40 percent of respondents to a July Consumer Science survey said they would buy a little more private label products if they received loyalty card discounts on the items, while a quarter said they would buy a lot more products.

Respondents came from Consumer Science’s 400-member U.S. online panel.

Respondents with household incomes over $50,000 said they were more likely to buy a lot more private label products tied to loyalty card discounts (32 percent) than those in lower incomes (17 percent).

In addition, 58 percent of respondents said they would choose a particular retailer if it offered loyalty cards catering to their private label needs. Fewer than 20 percent said tying loyalty cards to private label products would not sway their decision of a retailer.

As for the amount of promotions, nearly 90 percent of those responding said they saw the same or more private label promotions tied to loyalty cards today than in the past. Nearly 45 percent said they saw more promotions.

The survey showed that more than two-thirds of those surveyed were frequent loyalty card users, with women and higher-income shoppers more frequent card users in the group. Of the group, 71 percent of the women polled said they were frequent users, as opposed to 59 percent of men.

Households with more than $50,000 annual income reported that 71 percent were frequent users, as opposed to 58 percent below that level.

The report says respondents overall saw use of loyalty cards the same or increasing today than in the past.

“For those that said more, the typical reason given was to get the discounts,” the report says. “For those that said less, the typical reasons given were their local store had stopped using cards or they now shopped at stores that don’t use loyalty cards.”

Among the stores cited that stopped loyalty card programs was Albertsons, while stores cited that did not have loyalty card programs included Walmart.

Three-quarters of respondents said they used between one and three loyalty cards, while 11 percent said they used five or more.

“The older age groups used more cards than the younger,” the report says, with 3 percent of the 18-34 group using five or more cards as compared with 16 percent of those over 35.

Overall satisfaction ratings for loyalty cards were high. More than two-thirds of respondents (68 percent) gave above average or better grades to the programs, with the best ratings given for discounts offered (70 percent).

Of the additional features most desired by shoppers, the top answers included cash back or discounts on the overall shopping total rather than specific products; discounts on gas, prescriptions or fresh foods; and smart cards or phone apps to keep shoppers from having to carry multiple physical cards.

“A number of people mentioned the benefit of being able to provide their telephone number rather than using a physical card,” the report says.

Finally, the majority of respondents said loyalty card programs provided benefits to both retailers and their customers, with nearly 60 percent choosing that option. An additional 30 percent said the retailer alone benefitted from the loyalty card programs.

 

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Consumer Science specializes in primary consumer research.  It utilizes a broad range of techniques and technology to customize research that delivers each customer the most value.

A qualified staff of researchers and moderators provide turnkey research, including study design, respondent recruitment and customized analysis and reporting. The offerings, combining traditional interviewing techniques and the latest technology, include intercepts, one-on-one, dyads, triads, focus groups, large sensory panels, in-home test, surveys, social media monitoring, video analytics and Web analytics.

www.mmiconsumerscience.com

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