RILA: U.S. households save about $1,500 a year through retail loyalty programs
With affordability top of mind, consumers are increasingly relying on retail loyalty programs to stretch their budgets and make essential purchases, according to new research that reveals how important such programs have become to consumers in household budgeting.
Three-quarters (74%) of consumers consider retail affordability their top concern, and 85% say loyalty programs help them get more value from shopping they were already planning to do, revealed a study commissioned by the Retail Industry Leaders Association and conducted by Circana.
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The average household saves approximately $1,500 annually through retail loyalty and discount programs, representing more than $180 billion in estimated annual savings nationwide. The benefits are especially important for families: 78% of households with children say loyalty programs help them stay within their budget.
“At a time when affordability is front and center for families, saving roughly $1,500 a year can make a real difference,” said RILA president Brian Dodge. “These findings should be an important part of any conversation about how loyalty programs and other data-driven discounts work and the value they provide consumers.”
The study found that consumers are pretty clear-eyed about the data they're exchanging for discounts. Three in four (75% ) say loyalty programs provide shoppers a fair exchange of value, compared to 25% who believe shoppers give up more information than the benefits are worth. And 77% say they're comfortable sharing some shopping information in exchange for discounts, rewards or other benefits.
Other highlights from the research are below.
•Nearly three quarters (74%) prefer offers on products they typically buy and 63% are extremely comfortable receiving personalized offers based on their shopping history.
•Three-quarters consider member-only loyalty programs and discounts fair while a majority consider dynamic or surge pricing as unfair.
•Among households with children, 84% say loyalty programs help them get more value for their purchases, compared to 77% of other households. And 42% say they would experience a significant impact if loyalty programs disappeared, compared with 45% of other households.
“Consumers are being increasingly deliberate about where and how they spend, and loyalty programs have become an important tool for households looking to maximize the value of those dollars,” said Kiara Barrett, global head of thought leadership at Circana. “What stands out in this research is that consumers understand how these programs work and see a clear benefit from participating. They are making an intentional value exchange that helps them manage everyday expenses.”
Read the full study here.
