The increase in the cost of living, growth in e-commerce purchases, and interest in experiences are key drivers that loyalty programmes should consider when profiling the North American consumer. Currently, North Americans have a higher participation in loyalty programmes within industries they interact frequently as a higher engagement allows them to maximise the value of their spending. With growing consumer expectations that loyalty programmes must adapt and integrate novel platforms to create unique and exclusive experiences and encourage ongoing engagement, global brands must rethink their loyalty strategies.
The rise of paid subscriptions
Although loyalty programmes inherently focus on transactions, the appeal of participating in them solely for discounts or offers has decreased in recent years in North America, indicating that members now seek more engaging features. Consumers are looking for loyalty programmes that offer a lifestyle aspect, highlighting the importance of emotional loyalty, brand communities and unique experiences.
Although consumers are concerned about their spending, 56% of North Americans who participated in Euromonitor International’s Voice of the Consumer: Loyalty Survey (fielded March-April 2024) state that it is important to spend money on experiences. This trend is consistent across all regions, with all of them exceeding 50%.
To optimise reward value, brands are adopting loyalty structures that encourage member redemption. Partnerships allow businesses to expand the range of rewards beyond their core offering, while subscription-based schemes are popular among consumers who frequently use a particular brand and appreciate exclusivity and consistent rewards tied to their ongoing engagement with that player.
In 2024, 52% of North Americans pay to subscribe to a loyalty programme and 20% are not sure of how many programmes they participate in
Source: Euromonitor International
Canada stands out with the highest participation rates among respondents engaging in one or two of these paid programmes, indicating strong initial adoption. The US, on the other hand, surpasses the global average in the number of consumers participating in 3-5, and more than five such schemes. What really stands out is the significant percentage of consumers that are uncertain about the number of subscriptions to loyalty programmes they are involved in.
This uncertainty underscores a challenge: when consumers participate in many different schemes, they struggle to differentiate between them, potentially diluting loyalty and distinction among members. Consumers involved in a high number of programmes may have trouble distinguishing between them, which can weaken their loyalty. The best programmes are those that effectively highlight both transactional and experiential features, ensuring they remain relevant and memorable to consumers.
Decoding your loyalty competition
To understand the competitive landscape and identify those leading brands that successfully attract their members’ attention, examining the loyalty programme offers they use can serve as a guide for best practices and benchmarking against the industry.
To assess the competitive landscape of some of the most prominent brands, analysing users' app engagement can help determine trends and patterns in consumer retention. The recent findings from Euromonitor International’s loyalty research 2024 highlight the top three performers by industry as part of its Engagement index for Q1. Players such as booking.com, Amazon, Uber Eats and TheRealReal ranked first in their respective industries due to a balanced performance in both app average visit duration and app score, which takes into consideration daily and monthly active users. TJ Maxx and Ulta, on the other hand, lead in terms of lower bounce rate, which indicates that visitors regard these apps as more compelling, easy to navigate, and provide appealing offers and services that are aligned with their interests and preferences.
Putting the customer front and centre is vital for driving greater engagement. It is evident that the top-ranking brands deploy strong engagement strategies, which are paying dividends. Exclusive rewards, personalised offers and seamless user experience with the app are at the heart of this success, which in turn can boost retention and overall spend.
As consumers become savvier, they seek to gain higher specific value from their regular purchases and from their membership participation. As a result, brands must adapt and deliver wide-ranging rewards offerings, diverse membership status, unique experiences, and tailored services.
Learn more about how loyalty strategies evolve across multiple industries in our report, The Transformation of Customer Loyalty: A Pan-Industry View or Loyalty: Top Trends to Set to Dominate in 2024 to uncover the key loyalty trends identified by our team for 2024.