When the rewards are tangible, such as saving money off the final bill, consumer concerns about privacy go right out the window. But the industry needs to do a better job of selling the benefits and convincing customers that sharing both personal and sales data will build a relationship between the marketer and the consumer.
Nearly three out of five consumers that hold reward cards don’t mind sharing their purchase information with retailers. Even among those that don’t use them, privacy concerns about personal information rank fairly low as reasons they don’t, according to a survey by Quadstone Inc., a Boston-based predictive software firm.
Among shoppers that use retail card programs, an overwhelming majority (85%) said that saving money on their bill was the primary motivator for using them. Earning air miles, receiving information about special events or promotions or earning points for restaurants, movies and other entertainment lag far behind as the most important reason to do so.
Regardless of whether or not they actually use them, four out of five consumers think retailers that track and analyze their purchasing behavior are more likely to be in touch with what their customers really want. Many cited the perceived benefits to the retailer: 37% said that swiping a reward card allowed marketers to collect information about their purchases and another 7% indicated that reward cards allowed retailers to encourage consumers to shop more.
Additionally, when both users and non-users are considered, just under half said that reward programs indicate a heightened level of care for customers by a retailer – the same amount that said that it didn’t. And more felt that a reward program was no guarantee that a retailer wouldn’t "rip off" a customer (56%) than felt that it was (37%).
Naturally, the consumers that actually use the cards perceive more benefits. Nearly three in four said that the information collected allows retailers to mass-design future rewards that will be even more appealing while 59% said the data would allow marketers to personalize mailings and offers to reflect individual customer tastes. Nearly the same amount said that analyzing such shopping cart activity would allow the retailer to group products together in stores to make shopping easier.
For retailers that want to expand their programs, there is room to grow. Just under half of all consumers surveyed said they held at least one card, although among households with incomes in excess of $100,000 this jumped to 62%. Northeastern U.S. residents were also more likely (59%) to use them. Among age segments, individuals between 35 and 44 were the highest users of such cards, with nearly six in ten doing so.
The survey was conducted among 1,022 consumers, aged 18 and older, throughout the United States. Responses were gathered between June 22 and June 25. The survey was conducted by Weber Shandwick Worldwide on behalf of Quadstone.
