The Deloitte report notes that digital rewards programs also give retailers a source of valuable data on their customers. When Apple launched stricter privacy rules on iOS in 2021, it hampered traditional media networks' ability to track consumers. This created an opportunity for retailers wanting to sell their customers' data to advertisers, though it raised questions about privacy.
Around 2 in 3 American consumers already belong to somewhere between 1 in 5 loyalty programs. Deloitte estimates most consumers use half or even fewer of their memberships. The challenge many retailers face is not signing up consumers but rather creating benefits and shopping experiences attractive enough for their existing consumers to use the memberships and stick around.
One potential source of silver lining is that customers are not solely focused on price. A different study, , asked both company executives and consumers what they thought caused consumers to leave a company. Some 37% of executives surveyed said they believed customers left following price increases or the cessation of discounts. Yet only 17% of consumers polled agreed. Consumers were more than twice as likely to say a bad experience with their products or services would make them leave a brand.
In a time of prolonged inflation, companies might not have much more room to adjust their prices. This suggests companies can do well by focusing on quality over making painful decisions about prices.
Story editing by Mary Reardon. Copy editing by Paris Close.
This story originally appeared on Task Group and was produced and distributed in partnership with Stacker Studio.