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The top barriers deterring consumers from joining loyalty programs are…

BY Deena M. Amato-McCoy

As consumers increasingly limit their loyalty program participation, retailers need to step up their game to attract and retain members.

Half of consumers are deterred from joining loyalty programs, according to “Loyalty in the Age of the Connected Consumer,” a study from Kobie Marketing.

According to data, consumers are most turned off by brands that ask for too much information or enrollment processes that take too long (26%). Almost one in four shoppers (22%) won’t join if it takes too long to earn and redeem points.

Rather, 86% of consumers reported that they primarily join programs to collect and redeem points for rewards. Meanwhile, 36% said they join programs specifically to redeem points for discounts and prizes.

Format simplicity is the main factor that encourages consumers to join programs. Almost one in four (22%) said they would be most willing to join a loyalty swipe card program, 15% said they would most likely sign up for store credit cards, and 11% said they would most want to join a points-based mobile app program.

However, price is a driving force in the context of customer retention. More than a third (35%) of consumers ranked price as the most significant factor in whether they would return to a brand or shop elsewhere. This indicates there are more opportunities for brands to keep customers engaged if they offer free or discounted products as part of their programs to elevate the customer experience around the point of sale, the study revealed.

Other key findings from the report include:

• More than half (51%) of consumers are actively engaged with at least three or more loyalty programs.
• Almost half (45%) of shoppers don’t want technology that they perceive as invasive and annoying when shopping with a brand.
• Two-thirds (66%) of consumers reported being most likely to make impulse purchases in-store.
• Almost 90% of consumers said that their favorite brands are communicating with them the right amount.

“Consumers now have more options at their fingertips than ever, and they want products and services whenever, wherever and however they’ve come to expect them,” said Dave Andreadakis, chief strategy officer at Kobie Marketing.

“While we found price to be a driving factor in consumers’ decision to make repeat purchases, the customer experience is paramount before, during and after the point of sale,” he said. “With this in mind, marketers should focus on engaging early and often, delivering tiered rewards with earlier, smaller redemption opportunities and encouraging simple sign-ups in the beginning.”

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Build-A-Bear Workshop forced to end store promotion after ‘unprecedented’ response

BY Marianne Wilson

Sometimes, promotions are too popular—especially ones involving furry stuffed animals.

Build-A-Bear Workshop on Thursday ended its one-day “Pay Your Age” sale much earlier than expected after its stores were flooded with customers, with long lines, in some cases, extending outside malls. The promotion allowed customers who visited a Build-A-Bear store on July 12 to pay their current age to make a stuffed animal of their choice. (The sale was open to customers of all ages, with the price topping out at $29.)

“Per local authorities, we cannot accept additional Guests at our locations due to crowds and safety concerns,” Build-A-Bear said in a statement posted to its website at 10:30 a.m. Thursday morning. “We have closed lines in our U.S. and Canada stores. We understand some Guests are disappointed and we will reach out directly as soon as possible.”

The retailer called the response to the sale “overwhelming and unprecedented” in its 21-year history. It distributed vouchers to shoppers in lines, to be redeemed for a future purchase.

Analyst Neil Saunders, managing director of GlobalData Retail, said response to the event indicates that the Build-A-Bear concept remains relevant and popular.

“But first, Build-A-Bear needs to get its alienated customers back on side,” he said. (For more analysis, click here.)

The popularity of the event was evident across the nation — and across the pond. At Syracuse’s Destiny USA center in Syracuse, New York, the line stretched from the storefront around large portions of the mall, including the food court by the carousel. People started lining up at Mall of America at 6 a.m. The BBC reported that lines “about a mile long” formed at one U.K. location.

Build-A-Bear created the one-day promotion “to kick off its new everyday celebration of birthdays.”

Build-A-Bear Workshop has more than 400 stores worldwide.

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Analyst: Build-A-Bear needs to repair damage caused by promotion snafu

With much higher than anticipated demand for its “pay your age day” promotion, Build-A-Bear Workshop has become a victim of its own success. The decision to shut stores and end the promotion early was necessary on both safety and operational grounds, but it will damage the brand.

A lot of parents are now upset that they cannot fulfill promises to their children, and many who made special trips to malls are frustrated that their efforts have come to nothing. In our view, Build-A-Bear is going to have to take some action to remedy this, maybe by offering deals and special offers to those affected. This could have a future impact on profits, although it will be helpful to sales volumes.

The good news is that the high demand indicates that the Build-A-Bear concept remains relevant and popular. While the company needs to plan future promotions far better, there is seemingly an opportunity to stimulate sales with the right deals and offers. But first, Build-A-Bear needs to get its alienated customers back on side.

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