Shoppers Boost Holiday Purchasing Power through Customer Loyalty Programs
November 21 2017 - 10:30AM
Business Wire
Citi Retail Services Study Shows Rewards
Shoppers Expect to Save $149 this Season
A new nationwide study commissioned by Citi Retail Services has
discovered that more than two-thirds of Americans who participate
in rewards programs expect to save money this holiday shopping
season through their redemptions. While the average customer
expects to save $149, one in three expect to save $200 or more. The
survey also found that aptly named “loyalty programs” are very
effective with 86% of customers saying they are more loyal to the
brands where they participate in rewards programs.
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Shoppers Boost Holiday Purchasing Power
Through Loyalty Programs (Graphic: Business Wire)
“In a world where everyone is talking about immediate
gratification and flash sales, customers are taking proactive means
to plan out their spending and stretch their budgets in a strategic
way. We found that two-thirds of consumers join a rewards program
even if it did not result in instant savings,” said Leslie
McNamara, Managing Director, Business and Market Development for
Citi Retail Services. “Customers are taking a holistic approach to
their holiday shopping by researching their purchases, joining
rewards programs and consolidating their spending at specific
retailers or on designated payment products to achieve hard dollar
savings during the holiday season. In fact, 72% of rewards users
told us they think they’re smarter holiday shoppers than their
peers and 67% of shoppers said they have already taken extra steps
to accrue or redeem rewards.”
Rewards are a New Currency
Shoppers are treating their rewards like a separate currency,
accruing and spending strategically to boost their holiday
purchasing power and stay on budget. Citi Retail Services’ survey
found that shoppers:
- Use rewards to buy more gifts than they
would otherwise (50%)
- Use rewards to buy gifts for someone
they wouldn’t otherwise (26%)
But some shoppers are saving those rewards for themselves: 41%
of shoppers said they plan to use their rewards treat themselves to
purchases they otherwise wouldn’t make. The average shopper
participates in four rewards programs and nearly 90% of shoppers
plan to utilize those programs during the holidays to either
accumulate points or redeem existing ones.
“We are seeing a general trend, but especially during the
holidays, of customers making concerted efforts to be strategic
about how and when they use their rewards,” said Terry O’Neill,
Managing Director, Head of Product, Marketing and Analytics at Citi
Retail Services. “It’s not just about leveraging rewards as a
'bonus', but rather seeing it as a new type of currency that has a
genuine impact on purchasing decisions and extends their wallet.
While loyalty programs continue to evolve to include experiences,
many shoppers are still drawn to the hard dollar value and are
tapping into their accumulated rewards during the holidays to
extend their purchasing power.”
Shoppers are Serious about their Rewards
Citi Retail Services found that some savvy shoppers are taking
steps to maximize their rewards programs. Survey findings indicated
that some shoppers are consciously spending with the purpose of
getting more in return – especially when bonus rewards or points
promotions are underway. In order to accomplish this, shoppers buy
more of something, like the common practice of buying in bulk
(42%), or shop at odd times to take advantage of flash sales, such
as very late at night (25%). And there is good reason to be serious
about rewards – while there is no central repository of information
on just how much of this “currency” exists nationally, estimates
put the value of the total rewards market at more than $320
billion, projected to grow to $500 billion by 2019.
Rewards Appeal to Everyone
Shoppers across the country, in all regions, participate in
rewards programs at high rates, with eight in ten consumers
belonging to at least one rewards program. On top of that, each
part of the country boasts a significant number of "very active
rewards users," with Northeasterners (36%), Southerners (24%),
Midwesterners (27%) and Westerners (27%), participating in 5 or
more rewards programs. Nationwide, shoppers are concentrating their
spending on fewer brands, getting more bang for their buck.
Rewards programs are also popular among all age groups with
Millennials as the most avid reward seekers (83%). Generation X
closely follows (73%), with approximately one in two Boomers (54%)
participating in rewards programs.
“Rewards programs continue to be a bright spot and clearly
resonate with consumers across the country, regardless of age,”
added McNamara. “There’s an emotional element to redeeming rewards
during the holiday season so we can buy thoughtful gifts for our
loved ones without experiencing financial stress. This is a
remarkable experience for many shoppers that deepens their
relationship with a brand all through the year.”
Rewarding Loyalty
“The holidays are a time when retailers give back to their most
loyal customers through special deals and incentives,” says
McNamara. “Loyalty program members can look forward to added value
when they redeem or earn new rewards from retailers that are
committed to strengthening ties with their most dedicated
shoppers.”
About Citi
Citi, the leading global bank, has approximately 200 million
customer accounts and does business in more than 160 countries and
jurisdictions. Citi provides consumers, corporations, governments
and institutions with a broad range of financial products and
services, including consumer banking and credit, corporate and
investment banking, securities brokerage, transaction services, and
wealth management.
Additional information may be found
at www.citigroup.com | Twitter: @Citi |
YouTube: www.youtube.com/citi |
Blog: http://blog.citigroup.com |
Facebook: www.facebook.com/citi |
LinkedIn: www.linkedin.com/company/citi.
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CitiDeirdre Leahy, 212-559-3296deirdre.leahy@citi.com
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