Card Holders Pick Electronics Over Home Improvement Rewards: Maritz
There has been a shift in reward preferences by American rewards card consumers who would now prefer to listen to a new iPod than repaint the garage.
Redemption for Best Buy gift certificates moved ahead of Home Depot in popularity among rewards card customers as compared to last year, according to Maritz Loyalty Marketing’s Almanac, a yearly analysis of the redemption activity of its loyalty marketing clients.
The analysis also found that gift certificates currently are the most popular reward type. Fifty-seven percent of reward card customers redeem for gift certificates; 37% redeem for in-kind rewards like lower APR, cash back and lower/no fees; 2.6% redeem for merchandise; and 2.7% redeem for travel.
“While it may appear merchandise and travel are not as popular among rewards cards clients, successful programs offer a range of rewards specifically targeted to customer segments,” said Gail Sneed, market development director, Maritz Loyalty Marketing, in a statement. “The top banks understand that to attract customers and retain those that may not spend at an elevated level, they need to offer cash back, low APRs and lower fees, as well as gift certificates that don’t take a lot of points to earn. But to build loyal customers who will stick with their card for a long time, and to appeal to higher-income earners, banks need to offer a variety of merchandise and travel rewards that customers can work towards earning, while they continue to use the card.”
Other findings of the analysis include:
- Portable MP3 players broke into the Top 10 merchandise items redeemed at No. 9, behind such items as DVD players (No. 1), Omaha Steaks (No. 3) and golf balls (No. 6).
- Electronics (video games, televisions, stereos, DVD players, etc.) received about 40% of the overall redemptions in the merchandise category
- Home goods (appliances, furniture, art, etc.) received nearly 20% of all merchandise category redemptions
- Entertainment (home video, music and magazine subscriptions) received about 14% of redemptions within the merchandise category
