A high percentage of shoppers (77%) hold loyalty cards, but only 40% utilize store-issued credit cards, primarily due to concerns over interest rates and privacy. 82% of loyalty cardholders seek discounts and savings, yet a significant number of non-adopters cite insufficient rewards and lack of loyalty to justify sign-ups. To enhance customer satisfaction and retention, businesses should survey customers on their perceptions and ensure that rewards are perceived as valuable.

1. TrendTruth: Store Credit 77% of all shoppers hold a loyalty card –but just 40% use a store-issued credit card. Why the discrepancy? FGI investigates.

2. More businesses than ever offer rewards for loyalty.

3. Grocery (Food Lion MVP, Harris Teeter VIC…) Big-box (Target, etc…) Bookstores Pharmacy Airlines Hotels And more…

4. Who are the Leaders? 88% of shoppers hold a loyalty card for grocery 59% hold one for pharmacy 31% hold a card for a bookstore 25% hold a card for office supply For big-box retailers, department stores, restaurants, hotels, and airlines, the number is lower (15-18%)

5. “ At which stores do you hold a customer loyalty card? Check all that apply.”

6. How many loyalty cards? Most who report holding a loyalty card have more than one (92%) A quarter hold two cards (22%) One fifth carry three (20%) A handful have more than 7 (17%)

7. Why get a loyalty card?

8. “ What are the advantages of signing up for a customer loyalty card?”

9. 82% want discounts, rebates and savings 41% want to get bonus points 39% want personalized coupons 38% want access to special sales Others want gas rewards, pharmacy rewards, discounts at partner companies

10. Fewer shoppers pursue store-issued credit.

11. 40% of shoppers hold a store-issued credit card, fewer than those enrolled in non-credit loyalty programs Discouraged primarily by expensive interest rates (46%), annual fees (32%), and financing percentages (31%) Also worried about privacy and credit risks

12. What about the non-adopters?

13. Some do not shop often enough at any store offering rewards to justify signing up 43% for traditional loyalty cards 33% for store-issued credit cards With loyalty cards, many worry about privacy 40% don’t want information given to third parties 27% don’t want their purchasing habits tracked 23% simply don’t want to issue personal info

14. Enough rewards? A third of shoppers think loyalty cards do not offer enough rewards to justify signing up Nearly 1 in 5 think the same of store-issued credit cards Again, many feel they are not “loyal” enough to any particular business to justify signing up

15. Actionable Insights Most shoppers are in some kind of loyalty or customer rewards program, but about 1 in 4 are non-adopters More shoppers enrolled in traditional loyalty programs than credit programs Non-users might adopt if they felt secure and believed the rewards were enough Some shoppers do not shop often enough at any one store to adopt

16. Next Steps Use an awareness/usage study to assess whether and why your customers use the cards –and, if not, why not. Survey your customers on their feelings about loyalty and credit cards to help you pinpoint what program would best serve your retention strategy. Ongoing satisfaction tracking ensures that customers feel their cards offer enough rewards and promise enough perceived benefits to justify enrolling.

17. How do we know this?

18. Survey Methods Date of Survey: July 19-22, 2010 Respondents: 400 Sample Source: FGI SmartPanel This nationally-representative sample consists of adults aged 18 and up and is balanced to the US population using recent census data. One can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.

19. Why FGI Custom online panels Branded online communities SmartPanel: 100,000+ panelists SmartPanel Community Human experts who handle each step of the process with you and your customers in mind

20. FGI Research: custom panels, research experts, dynamic approach.

21. This TrendTruth is produced by FGI Research. Learn more about the market trends online at our TrendTruth blog… … or follow us on Twitter! @TrendTruth fgiresearch.com/trendtruth