Johannesburg – January 31, 2017 - South Africans it seems are loyalty mad. Proof of this is that of six Africa/Middle East countries surveyed in Nielsen’s latest Global Retail Loyalty Survey, South Africa had the highest number of *respondents (84%) stating that that they were currently members of a loyalty programme. The significance of this figure becomes even more apparent when one considers that only 66% of global respondents were members of one or more loyalty programmes. (*The findings in the survey were based on respondents with online access in 63 countries. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of only existing internet users, not total populations. In addition, survey responses are based on claimed behaviour, rather than actual metered data.)
Nielsen Head of Emerging Markets Thought Leadership Ailsa Wingfield says; “In Africa and the Middle East, participation in retail loyalty programmes is closely tied to the strength of modern trade. Modern trade is still in a growth phase in many countries in the region, however, the high membership rate in South Africa speaks to the relatively long history of loyalty programs and high penetration in the market.”
Bolstering this view, 62% of South African respondents in the study revealed that they belong to between two and five schemes, while 6% said between 6 and 10 schemes! In terms of how they interact with their loyalty scheme; 82% scan their card in-store, which represents one of highest usage rates of physical loyalty cards in the world. Thirty two percent enter information or log into their account on a retailer website and 28% use the retailer’s app.
Wingfield comments; “This is yet another clear indication that an omni-channel experience is the new reality for consumers. Retailers can’t think of the online browsing and in-store buying experience as disparate activities. Loyalty programs and the engagement with members should occur holistically across brick-and-mortar and digital channels during the entire path to purchase, not just at check out.”
Wingfield adds that as adoption of non-traditional payment methods rises, loyalty programs also need to be flexible in terms of payment type. “Mobile payment platforms will increasingly deliver an opportunity for loyalty-program engagement with consumers, providing a convenient and personalized way for program members and retailers to engage with one another all along the path to purchase.”
Interestingly, monetary rewards are more highly valued in South Africa than in the rest of the countries in the region. Nearly seven in 10 South African loyalty-program participants say rebates or cash back (69%) or product discounts (67%) are among their top three rewards - response rates that are 24 and 16 percentage points above the global average, respectively. Free products also score highly amongst South African respondents (43%).
In stark contrast, non-money motivators did not score highly amongst South Africans, with recognition as a valued customer at 14%, frequent flyer points at 9%, charitable donation at 8% and higher priority service at just 5%. “In the markets where modern-trade penetration is lower, loyalty-program members tend to be more affluent and more willing to give back to those in need,” explains Wingfield.
In terms of their agreement with the following statements, the highest number of Africa/Middle East respondents came from South Africa (76%) who stated that loyalty programmes are more likely to make them continue to do business with a company, while 67% said they only join loyalty programmes to get free products or discounts. Loyalty programmes also create competitive advantage by reducing customers’ likelihood to switch stores and 67% said that all things being equal, they will buy from a retailer with a loyalty programme over one without.
Looking to the future Nielsen Catalina Solutions vice president, Retail Relations Russell Mackey commented in the study; “The retail loyalty programs of the future will be precise, personal, and geared to what consumers really want. We think about loyalty programs as personalised because they appear to be relevant to the shopper, but many retailers haven’t even scratched the surface when it comes to realising their full potential.
“Big data (in conjunction with technology) and various relationships and collaborations that allow retailers to offer individualized deals based on a customer’s buying habits and purchase history will enable loyalty programs that are highly tailored to individual shoppers.”
To achieve this kind of success the report also listed key strategies for success:
The findings in this survey are based on respondents with online access in 63 countries. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of only existing internet users, not total populations. In developing markets where online penetration is still growing, respondents may be younger and more affluent than the general population of that country. In addition, survey responses are based on claimed behaviour, rather than actual metered data. Cultural differences in reporting sentiment are likely factors in the outlook across countries. The reported results do not attempt to control or correct for these differences; therefore, caution should be exercised when comparing across countries and regions, particularly across regional boundaries.
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content—video, audio and text—is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world’s population. For more information, visit www.nielsen.com.
Contact: Luise Allemann email@example.com (082) 376-6716