Loyalty Program Members Demand More Personalized Experiences - eMarketer

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Loyalty Program Members Demand More Personalized Experiences

Retailers turn to data and analytics to link consumer information

January 29, 2014

Membership in US retail loyalty programs has grown to more than 1 billion, up from less than half that figure in 2006. As their experience with such programs deepens, consumers have begun to expect more personalized offers and services—not just blanket discounts—in return for their participation. Thanks to the increasing sophistication of behavioral and demographic data that digitally enabled loyalty programs provide, retailers can satisfy those desires while also addressing their own data needs, according to a new eMarketer report, “Loyalty Marketing 2014: Lessons from the Drugstore Chains.”

Merchants have gotten the message about relevance in growing numbers. In April 2013, RIS News found that retailers in North America were eyeing up increased investment in a host of loyalty marketing-related areas. Many of those efforts would occur in data integration and analysis.

The relationship between loyalty programs and customer and sales data is synergistic. As much as loyalty programs need data to personalize messages, they also serve as a key source and connector of consumer behavior across different sales channels.

Most consumers realize that they need to trade some private information to receive more relevant offers. According to September 2013 research by Forbes Insights, more than three-quarters of US business-to-consumer customers saw the benefit of trading personal information for more relevant discounts and offers, and 62% were willing to do so in return for personalized offers.

Collecting customer data is only part of the challenge that retailers face. There’s a huge leap from gathering data—whether it’s data collected from retail operations, demographic information volunteered by customers or data sold by aggregators—to having data organized and filtered finely enough to provide personalized and individualized recommendations that enhance the customer experience.

Loyalty programs, though, are a relatively straightforward way to link behavior across multiple channels.

The full report, “Loyalty Marketing 2014: Lessons from the Drugstore Chains,” also answers these key questions:

  • What is the growth rate for loyalty program membership?
  • Why are consumers attracted to loyalty programs?
  • How are companies using data to improve loyalty programs?
  • What lessons can retailers in general learn from the loyalty programs of the big drug chains?
  • Are loyalty programs the answer for every company?

This report is available to eMarketer corporate subscription clients only. eMarketer clients, log in and view the report now.


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