The adoption of loyalty and reward programmes has increased in the UK over the last few years. Amidst inflation and rising interest rates, many shoppers have turned to loyalty programmes as they look for deals and discounts. This trend is projected to continue further in 2024, subsequently driving the adoption of loyalty programs over the medium term.
With the rising demand, new entrants are planning to launch loyalty and reward programmes which, in turn, is expected to aid the competitive landscape and innovation in the loyalty programmes market.
According to a YouGov survey, commissioned by Commerce tools, 66 per cent of consumers were planning to utilise loyalty programmes to save on their purchases. The trend is much higher among millennial consumers, whereas consumers aged 55 and above were least likely to use their reward accounts for purchases. In response to the growing demand for loyalty programmes, especially among young generation shoppers, many businesses are expected to increase their investment in loyalty programmes to add personalised offers.
The Competition and Markets Authority (CMA) has launched an investigation to review loyalty scheme prices offered by supermarkets. Loyalty scheme offerings have proved highly successful for supermarkets. Supermarkets like Tesco have reported strong growth in sales volume by offering products at a visibly lower rate to their members.
The Competition and Market Authority said that the growing usage of loyalty schemes meant that discounts were available only to members. The review will consider whether it is fair to offer cheaper product prices only to loyalty card holders or not.
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