In 2020 participation in loyalty schemes has risen once again. We have seen not only greater engagement from customers, but also the growth of mobile apps. Some of these changes were also driven by the economic lockdown. How has COVID affected loyalty schemes And what new trends can we observe?
How has COVID changed loyalty schemes? Participation in loyalty schemes in 2020
Z Loyalty Programme Monitor, According to a survey conducted by the ARC Rynek i Opinia research institute, 60% of adult Poles say they are participating in loyalty schemes this year. These programmes are most popular amongst people aged 26–35, where participation stands at as high as 73%.
Participation in loyalty schemes It also varies depending on the size of the town or city. In large urban areas, this percentage will be highest. It is estimated that in cities with a population of more than 500,000, participation in at least one programme could be as high as 71%.
The programme that saw the most dynamic growth in declared participation was Lidl Plus. Shortly after its launch, it became one of the most popular programmes among Poles, alongside Orlen Vitay and Klub Rossmann. In 2020, declared participation stood at as high as 80%, representing an increase of 8 percentage points. There were also declines, as in the case of Tesco Clubcard, which fell by 6 percentage points to a participation rate of 9%.
Mobile app development
Alongside the rise in participation in loyalty schemes, it is also worth noting the growing popularity of mobile apps. The proportion of people using this solution has increased significantly. In the 18–28 age group, it stands at 84%, whilst in the 16–35 age group it is 80%. In total, as many as 74% of loyalty programme participants say they use a dedicated mobile app.
The latest market trend points not only to the growing popularity of apps, but also to the development of features enabling payments to be made via them. This feature is found in an increasing number of leading apps and is creating a new reality that is worth considering now.
The Pay&GO feature
Payment via a mobile app is available through loyalty programmes such as Orlen Pay, Zappka Pay, Lidl Pay, Starbucks Rewards and Green Caffe Nero Wallet. These programmes verify the participant’s identity and then enable payment. Although each of them uses its own individual solutions, the result is the same: payment for purchases via the loyalty programme’s app.
With Orlen Pay, the user scans QR codes displayed on petrol pumps and then authorises the transaction using biometric authentication. With the Green Caffe Nero Wallet and Lidl Pay, the virtual card is authorised on the phone screen. Although these solutions carry certain security risks, they are undeniably innovative and functional.
COVID and loyalty schemes
The economic lockdown was felt across the whole of society. It also had an impact on the loyalty schemes market, which had to make the necessary changes to adapt to the situation and ensure the safety of participants.
One of the most noticeable changes was the simplification of the registration rules. It was no longer necessary to visit a physical location; all that was needed was a mobile phone with internet access. The organisers also dispensed with plastic cards, physical rewards and the requirement to make a purchase upon registration. All that is needed to take part in the scheme is a mobile app, which is now more important than ever. The growing importance of mobile apps is further underscored by their use in other initiatives, such as the delivery of groceries in partnership with food delivery companies.
There were also numerous campaigns by online shops that used loyalty schemes to attract new customers. Meanwhile, service providers who delivered orders with significant delays – sometimes even after several weeks – suffered losses.
During the first few weeks of the pandemic, many companies invested their resources in the fight against the virus, thereby enhancing their reputation in the eyes of their customers. Meanwhile, the organisers of loyalty schemes enabled participants to voluntarily donate their points to the fight against COVID. A similar initiative has also emerged recently, when organisers encouraged people to support the victims of the Beirut explosion in this way. The global campaign was held under the banner ‘Lebanon Disaster Relief’.
Changes have also been made to the gamification rules in café chain loyalty schemes. As the cafés remained closed during the first few weeks, members’ statuses were reset, even where the requirements regarding the frequency of visits had not been met. Conversely, some hotels allowed guests to achieve a high membership status simply by registering and staying for a short period. High point multipliers also appeared in the offers of many programmes in exchange for small purchases made at the height of the lockdown.
