Loyalty programs support mobile-assisted retail


A recent PYMNTS report examining consumers’ digital shopping habits in six countries – Australia, Brazil, Mexico, the United Arab Emirates (UAE), the United Kingdom and the United States – found that consumers Britons are 16% less likely than average to use their smartphones anytime and for any reason during their shopping journey, whether online, offline or a mix of both.

Read the report: 2022 Global Digital Shopping Playbook: UK Edition

When it comes to in-store shopping, Britons are the least likely to use their phones to compare prices, find product information, read product reviews, locate products in-store, confirm if something is in stock or view product reviews. .

In a category of smartphone-assisted in-store shopping, however, UK consumers are bucking the trend. When asked if they use mobile devices to collect loyalty rewards, 9.2% of UK respondents said yes, putting the country firmly in the middle of the table.

This finding is in line with previous research by PYMNTS, which found that UK shoppers are avid users of loyalty programs, particularly in grocery stores. Sixty-three percent said they use at least one grocer loyalty program and 44% said they spend more at supermarkets that offer one.

Read more: What UK consumers expect from their grocery experiences

Read together, the findings of both reports suggest that loyalty programs present an opportunity in the UK retail ecosystem that could encourage shoppers to pick up their phones more often.

25 years of the Tesco Club Card

One of the country’s largest supermarket chains, Tesco, offers an example of how loyalty programs can boost smartphone-assisted in-store retailing.

Tesco was the first major supermarket in the UK to offer a loyalty card scheme when it introduced the Tesco Clubcard in 1995. Unlike previous stamp-based loyalty schemes, Clubcards enabled Tesco to collect data on what people were buying, giving the retailer better insight into their customers’ buying habits.

While Tesco was something of a pioneer in the field of supermarket data analysis, the concept is now associated more with digital technologies than the relatively low-tech magnetic stripe Clubcards of the 90s.

This is the reason why since 2010 the Clubcard functionality has been available to buyers via a mobile application.

While early Clubcard apps only offered one feature – the ability to identify each Clubcard account at checkout using a mobile device instead of a card or key fob – the range of features has since expanded. Now the Tesco Clubcard app can be used to view current offers, access rewards and apply discounts.

For Tesco, the Clubcard app has reached the point where it offers clear advantages over a physical loyalty card.

Additionally, since 2020 the benefits of being a Clubcard holder, through the app or otherwise, have increased significantly. As well as being able to collect loyalty points which can be redeemed for rewards, Tesco now operates a two-tier pricing scheme, which offers Clubcard users discounts of up to 50% on hundreds of items.

Related: For restaurant customers, loyalty rewards and subscription programs go hand in hand

After aggressively promoting its “Clubcard Prices” program last year, according to a Reuters report reportthe Clubcard app attracted 1.9 million users between October and December 2021. This means that of the more than 20 million members of the Tesco loyalty program, 8.5 million of them now access it via the application.

While Tesco pushes for mobile-first loyalty schemes, shoppers and merchants still have a long way to go in the digital transformation of UK retail. Despite the popularity of the Clubcard app, the figures above suggest that more than half of Tesco shoppers still use a physical loyalty card, despite the benefits of the mobile equivalent.

What’s next for loyalty apps?

Besides Tesco, other loyalty programs in the UK are also emphasizing smartphone-assisted in-store shopping. The country’s second most downloaded loyalty app, Nectar, last year launched My Nectar Prices, which provides shoppers with personalized offers based on their purchase history.

Drawing on strategic retail partnerships, Nectar – rival Tesco Sainsbury’s loyalty program – also allows customers to collect points from a range of other online and physical retailers. This means that it generates user data on multiple brands and combines a dozen or more loyalty programs into a single offer.

With all these brands hosting their loyalty programs under one roof, the Nectar app has the potential to become a great loyalty app.

See also: The Super App Shift: How Consumers Want to Save, Buy and Spend in the Connected Economy

And as customers increasingly demand more convenient and frictionless user experiences, an app that combines multiple retailers’ loyalty programs and integrates with popular mobile wallets could be exactly what will drive UK shoppers to further adopt their smartphones.

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About: Results from PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, UK and USA. and showed strong demand for one super multi-functional app rather than using dozens of individual apps.


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