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Loyalty program members are confident they will save money this holiday season, according to a new study commissioned by Citi Retail Services.
More than two-thirds of Americans who participate in rewards programs expect to save money this holiday shopping season through their redemptions, the study notes. While the average customer expects to save $149, one in three expects to save $200 or more. What’s more, 86 percent of customers indicated that they are more loyal to the brands where they participate in rewards programs.
“In a world where everyone is talking about immediate gratification and flash sales, customers are taking proactive means to plan out their spending and stretch their budgets in a strategic way,” said Leslie McNamara, Managing Director, Business and Market Development for Citi Retail Services. “We found that two-thirds of consumers join a rewards program even if it did not result in instant savings. Customers are taking a holistic approach to their holiday shopping by researching their purchases, joining rewards programs, and consolidating their spending at specific retailers or on designated payment products to achieve hard dollar savings during the holiday season. In fact, 72 percent of rewards users told us they think they’re smarter holiday shoppers than their peers and 67 percent of shoppers said they have already taken extra steps to accrue or redeem rewards.”
Interestingly, the study shows that some shoppers are consciously spending with the expectation of receiving more in return–especially when bonus rewards or points promotions are underway.
As a result, shoppers buy more of something, such as the common practice of buying in bulk (42 percent), or shop at odd times to take advantage of flash sales, such as very late at night (25 percent), the study notes.
“The holidays are a time when retailers give back to their most loyal customers through special deals and incentives,” added McNamara. “Loyalty program members can look forward to added value when they redeem or earn new rewards from retailers that are committed to strengthening ties with their most dedicated shoppers.”
Shoppers are treating their rewards like a separate currency, accruing, and spending strategically to boost their holiday purchasing power and stay on budget. The study revealed that shoppers:
Use rewards to buy more gifts than they would otherwise (50 percent)
Use rewards to buy gifts for someone they wouldn’t otherwise (26 percent)
But some shoppers are saving those rewards for themselves: 41 percent of shoppers said they plan to use their rewards treat themselves to purchases they otherwise wouldn’t make. The average shopper participates in four rewards programs and nearly 90 percent of shoppers plan to use those programs during the holidays to either accumulate points or redeem existing ones.
“We are seeing a general trend, but especially during the holidays, of customers making concerted efforts to be strategic about how and when they use their rewards,” said Terry O’Neill, Managing Director, Head of Product, Marketing and Analytics at Citi Retail Services. “It’s not just about leveraging rewards as a ‘bonus,’ but rather seeing it as a new type of currency that has a genuine impact on purchasing decisions and extends their wallet. While loyalty programs continue to evolve to include experiences, many shoppers are still drawn to the hard dollar value and are tapping into their accumulated rewards during the holidays to extend their purchasing power.”
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