The advertising is hard to miss. “Ten percent off your next purchase” – that’s what major retail chains are drumming up these days on all channels for their apps and their own bonus and loyalty programs.
The aim is to lure customers and bind them more firmly. The dealers resort to a trick. “More and more special offers can only be used if you register for the retailer app and are willing to provide your data. If not, you’re out of luck,” says Carsten Kortum, professor at the Baden-Württemberg Cooperative State University Heilbronn.
In the apps, customers and retailers enter into an exchange transaction: customers receive exclusive benefits. Sometimes there are additional items on offer, sometimes there is an extra discount on reduced products.
Special offers have become more important
In the best case scenario, retailers receive more loyal customers and their data. They help you understand what buyers want. You can better respond to their preferences and influence their purchasing behavior. According to a survey by the retail research institute IFH, more than four out of five customers in Germany use retailers’ own bonus programs or payback.
Loyalty programs are not new. The Swedish furniture retailer Ikea was one of the first to introduce the “Family Card” in 1984. Aldi is the only large retail company that does not have a benefit program. The fact that they are in demand is also due to the fact that not only many foods have recently become more expensive. Special offers have become more important. Price-sensitive customers take advantage of every opportunity to save. The competition between retailers is correspondingly fierce.
Bonus program users often buy more
Many customers obviously don’t take loyalty very seriously. The market researchers at NIQ see a trend towards shop hopping, i.e. towards several smaller purchases spread across different stores. Fewer and fewer people do their large weekly shopping exclusively in a store. This only accounts for a fifth of sales. It is said that loyalty to retailers is declining overall.
Nevertheless, bonus programs have an effect. According to the IFH survey, 56 percent of users buy more often from a retailer, and one in three spends more money. Many customers have four or more different shopping apps on their cell phones, but don’t use all of them regularly. There is a need for lasting added value and incentive, says the managing director of IFH Media Analytics, Andreas Riekötter. If this is not the case, the apps will be deleted again.
The managing director of the price comparison portal Smhaggle, Sven Reuter, considers the benefits of the bonus programs to be manageable. The average savings across providers is only one percent, he says. “By specifically purchasing special offers and changing retailers, you can save more conveniently and significantly more.”
Consumer advocates warn
A lot is likely to happen with the advantage programs in the future. Artificial intelligence is likely to play a major role in this. Retail expert Kortum expects that retailers will soon be able to serve customers in a much more targeted manner. He cites the streaming provider Spotify as a role model. In the app, users can put together their own playlists tailored to their tastes.
According to Kortum, there is one main reason why not all customers take advantage of apps and loyalty programs. “Many people are afraid because they don’t know what will happen to their data.” Consumer advocates are critical of the apps. Consumers should read the data protection regulations carefully and change settings if necessary, says Simone Bueb from the Bavarian Consumer Center. (dpa)