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Retail Industry Updates

IRI Offers Retailers 2 Words of Advice: ‘Drive Loyalty’


The pandemic — thanks to the influx of vaccines — is waning. So where do consumers stand? They may be standing pat.

According to market researcher IRI’s “QI 2021 Consumer Connect Survey,” consumer habits formed during the pandemic may be here to stay. That means that consumers still prefer to shop at fewer stores and are less inclined to clip coupons due to the risk of hand-to-hand contact. However, apprehension about clipping coupons has not lessened consumers’ desire for a deal, with a majority of respondents reporting habits such as trying new, lower-priced brands or buying store-brand products to save money, according to IRI.

While consumer sentiment remains in recovery mode from the global health and financial crisis that started in 2020, the survey found that consumers’ self-reporting of their financial health in the first quarter is on par with pre-pandemic first quarter 2020 levels. However, there appears to be a difference between consumer sentiment and actual consumer shopping patterns.

“In 2020, we saw an economic slowdown and unprecedented shifts in consumer behavior, but there are opportunities for nimble and creative consumer packaged goods (CPG) retailers and manufacturers to drive loyalty in 2021,” said Joan Driggs, vice president of content and thought leadership for IRI. “Our 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.”

Results from the survey show that drug and grocery channels lead the retail pack in loyalty and reward adoption when segmented by income level or generation. High-income households are the most likely to hold reward memberships across most channels except for convenience and dollar stores, both of which saw more low-income household subscriptions. Results by generation fluctuate between channels, with Generation X (79%) most likely to subscribe to drug loyalty programs, Generation Z (80%) most likely to subscribe to grocery loyalty programs and millennials (68%) 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.

When asked their reasons for obtaining a shopper loyalty card or reward membership, 74% of respondents cited free sign-up as the driving factor. Other reasons given included discounts for gas (56%), the ability to spend points (55%) and cash rewards (39%). Consumers were less moved by offerings such as access to new products (13%) or a mobile checkout capability (12%).

When deciding where to shop, 51% of respondents cited shopper loyalty programs as somewhat influential, followed by 22% who said it was extremely influential. Personalization also is a key to consumer loyalty, with 85% of respondents wanting to select their own benefits and rewards, and more than 70% wanting to personalize the way they earn based on their purchases or preferences.

From easy, intuitive sign-up to delivering tangible value, loyalty programs have the potential to fulfill their mission of creating and maintaining loyalty, according to IRI. “Successful programs remain dynamic, increasing personalization while ensuring the safety and integrity of members’ personal information,” the market researcher said in the report. “Brand partners should be aligned with the program ecosystem, working together to drive more value for members as well as continually elevate the appeal of the program.”