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Retailers split on loyalty
The retail sector is highly polarised when it comes to loyalty scheme penetration in the UK, according to the latest research from data analysts GI Insight.
The study found that the number of loyalty schemes operating in the UK overall has increased two and a half times in the last ten years, with over two fifths (41.2%) of top companies now operating a loyalty scheme.But, the retail sector is parti
In contrast, Fashion/Department Stores show the lowest loyalty scheme penetration rate at 12.7%. However, we can expect this to change. Longer-established schemes - for instance at GAP or Bonmarché, have produced provable hard commercial results. One case study talks of analysis, using data gathered through the loyalty scheme, which identified that 20% of the customers produced over 50% of the revenue, and the resulting strategies were then able to improve mailing campaign return on investment by between 80% and 140%.
Andy Wood, MD, GI Insight, comments: “There are now more loyalty schemes in operation than ever before. If growth continues at current rates we predict that an overall majority of top consumer companies will have a loyalty scheme by 2013. Companies have recognised the fundamental importance of information captured by loyalty schemes for business strategy and planning, and now regard them as a strategic asset rather than a financial burden. This growth in loyalty activity is, we feel, the result of increased competition as consumer marketplaces become more crowded and saturated. Successful companies over the next five years will be those that understand their customers better and appeal to their real tastes and preferences.”
Tagged as: loyalty
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