Chicago, IL—Consumer sentiment is on the rebound after a difficult 2020 impacted by dual health and financial crises. That’s a top takeaway from the IRI’s Q1 2021 Consumer Connect survey. Still, IRI reports, consumer sentiment and actual consumer shopping patterns are not in tune. IRI explains that despite a positive outlook, consumer habits formed during the past year during the COVID-19 pandemic may be here to stay; consumers are reporting they still prefer to shop at fewer stores and are less inclined to clip coupons due to the risk of hand-to-hand contact.
What consumers do still want, though, is a good deal. The majority of respondents in IRI’s survey reported money-saving habits such as trying new, lower-priced brands or buying store-brand products.
Joan Driggs, Vice President of Content and Thought Leadership, IRI, outlines what this means for retailers: “In 2020, we saw an economic slowdown and unprecedented shifts in consumer behavior, but there are opportunities for nimble and creative CPG retailers and manufacturers to drive loyalty in 2021. Our Q1 2021 Consumer Connect survey focuses on loyalty programs, and we found that retailers and manufacturers that embrace and enhance loyalty programs as well as continue giving consumers multiple options for making purchases, such as online ordering or click-and-collect, can improve their chances of capturing consumers’ attention and allegiance.”
Looking at what drives consumer loyalty, IRI reports that, according to the survey, drug and grocery channels are the leaders with loyalty and reward adoption when segmented by income level or generation. Taking a closer look:
- Income: High-income households are the most likely to hold reward memberships across most channels except for convenience and dollar stores, which both have more low-income household subscriptions.
- Generational differences: Gen Xers lead in loyalty program adoption and use, followed by Millennials: Gen X (79%) is most likely to subscribe to drug loyalty programs; Gen Z (80%) is most likely to subscribe to grocery loyalty programs; Millennials (68%) are most likely to subscribe to an online loyalty program with an annual fee. Across most channels, seniors and baby boomers were less likely to subscribe to a loyalty program.
- Motivating factors: 74% of respondents said free sign-up was their driving factor for obtaining a shopper loyalty card or reward membership. Additional reasons given: discounts for gas (56%); ability to spend points (55%); and cash rewards (39%). And lower on the list of motivating factors: access to new products (13%); mobile checkout capability (12%).
In the report, IRI outlines 7 essential design principles around which a loyalty ecosystem should be centered. These include: Personalization (leverage the full stack of consumer data across brands to offer personalized messages, offers and experiences); brand synergy (every brand must provide value to that ecosystem through its products and/or services); diversity of products and services; seamless consumer experience; all-in brand commitment; aligned strategies and goals; data and tech focused on connectivity. Access the full survey report here for more insights and action-steps to help ensure success.
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