Shoppers seem to have hit a rewards program slump.
Sure, we’re signing up for more rewards programs than ever. CNBC.com got an exclusive early look at the 2015 Colloquy Loyalty Census, which found that the average household has 29 different memberships, up from 22 in 2013. But shoppers are active in just 12 of those, a 4.5 percent decline over the same period. “Active use” is also a pretty low bar, indicating someone uses the program to earn or redeem at least once a year.
“That should be alarming for most businesses,” said study author Jeff Berry, research director at Colloquy. After all, the trend runs counter to the entire point of having loyalty rewards. “These programs are designed around, how do you get a customer to buy with you more frequently?” he said. “It’s an indication of how generic loyalty programs are these days.”
Still, some programs are seeing an upswing—because, researchers say, they’re offering something a little different. Three to make sure you join:
Memberships are up 88 percent since 2012 to 268 million, making them the second-fastest-growing category in the Colloquy study. Part of that stems from the launch of health-focused programs such as Walgreens‘ Balance Rewards and Rite Aid‘s Wellness65+, which appeal to shoppers looking to make the most of out-of-pocket health-care costs, said Berry. Couponers have also come to find drugstore deals among the best buys, said Teri Gault, founder of TheGroceryGame.com. “Each week, there’s usually one to three items that are free after a rebate, at each of the big chains,” she said. Shoppers also will find personalized offers based on past spending, and even freebies like gift cards for spending above a set amount.
Online travel sites
New and expanded reward programs from sites such as Expedia, Orbitz and Priceline have cut into airline loyalty, which is down 4 percent, reports Colloquy. The benefit here? Shoppers can often stack rewards, earning from the booking site as well as the airline or hotel. (Expedia and Orbitz have also launched new credit cards in the past year, offering another layer of rewards.) “The points they’re giving could be used at any airline or hotel,” said Berry. “You’re not stuck with one particular program, and there’s a real power in that. It gives consumers choice.”
Consumers have been digging into these fast-growing programs, where membership is up 107 percent from 2012, according to Colloquy. It’s less a matter of innovative programs than numbers, with more restaurants taking advantage of inexpensive technology. (Dunkin’ Donuts, for example, launched a program in early 2014, and apps like Perka and Belly have made it easy for independent locales to offer rewards, too.) Most are still the digital equivalent of the buy 10, get 1 free punch cards, said independent restaurant consultant Aaron Allen. “They’re really trying to figure out the financial model,” he said.
In the meantime, you can benefit from free meals and menu items at places you frequent.