Some things never seem to change. People appreciate being recognized for what they do and achieve, and even as Canadians become more digital when it comes to their finances and how they purchase and pay for products and services, they still like to be rewarded for their loyalty to brands, retailers and payment providers.
Loyalty rewards is a big business.
Latest figures from Statistics Canada show that the average Canadian loyalty program member was enrolled in 12.2 programs out of which 7.3 programs were actively used. The average enrollment figure has increased steadily from 7.9 in 2014 to the current 12.2 in 2017.
According to a report on major trends in the payment industry by Accenture Consulting, consumers want more rewards.
Consumer spending on rewards cards has skyrocketed since the Great Recession. In 2016 consumers received $15 billion in rewards value through cash back, miles and points. According to the report 48 per cent of consumers say they would switch their primary rewards card to get more value for their purchases and 42 per cent would switch for a large up-front sign-up bonus.
The report found the number one reason Baby Boomers, millennials and Gen Z consumers witched their primary rewards card in the last year was for higher value of rewards in terms of points or value per purchase. For Gen Zers, the number one reason to switch cards was for lower interest rates.
Convenience and personalized rewards are other major factors in the heated competition for consumers’ rewards business.
Seventy six per cent of respondents in the Accenture survey said they want to redeem deals tied to their cards when swiping them at the point of sale. Google’s Smart Tap technology already makes it possible to pay and redeem a loyalty card at once.
And half of people surveyed said they are interested in or could be convinced with the right incentives to share their personal information to get more relevant offers.
While rewards are an important component of the increasing move to digital finances and payments, consumers still want a satisfying experience which will be made up of a number of factors including speed, convenience, human interaction and rewards.
“It is a hybrid function,” says Robert Vokes, managing director, financial services with Accenture Canada. “There has to be a confluence of forces that all come together at once.”
Existing rewards models have reached a peak. Providers are competing to offer as much as possible to their customers and will have to find new ways to offer value if they want to become the provider of choice.
“Rewards will go beyond the card as consumer partner companies partner with payments providers to digitize their coupons and offers,” the report says. “In essence, tomorrow’s rewards will move beyond payments and become more experienced based. They will reflect consumers’ lifestyle needs and will be delivered seamlessly in real time.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.