Cost-Of-Living Crisis Emphasises Importance Of Loyalty Programmes To UK Consumers
IAG Loyalty are delighted to share our new thought-leadership report examining the importance of loyalty in a cost-of-living crisis
- UK-wide study suggests 92% of consumers are turning to loyalty programmes for everyday spending to make their money stretch during the economic downturn.
- Half of those surveyed said they’re searching for new ways to build their points to spend on treats they’d otherwise write off.
- Following the global pandemic, consumers say they’re keen to prioritise treats and holidays abroad if they can.
LONDON, United Kingdom – As the cost-of-living crisis continues across the United Kingdom this winter, a behavioural science study by IAG Loyalty, owners of the global loyalty currency Avios, has revealed the important part loyalty programmes are playing to help consumers during this challenging time, with inflation at its highest rate in 40 years.
According to the study of 1,000 people, 92% of Brits are relying on loyalty programmes to give an extra boost to their everyday spending during the cost-of-living crisis. More than 50% said they’re actively looking for new ways to collect points and maximise the return when they spend money, with 20% saying they were inclined to spend more with brands with loyalty programmes.
When asked to select three things they would want to prioritise during this crisis, 65% of respondents chose treats, followed by their annual summer/winter holiday (53%), then birthdays (42%), streaming services (40%) and live entertainment (34%).
When spending loyalty points, 80% of people consider themselves rational decision makers and 20% emotional decision makers, with the latter (38% of 18–24-year-old’s and 31% of 25–34-year-old’s) likely to choose luxury rewards.
Rob McDonald, Chief Commercial Officer of IAG Loyalty, says: “As household budgets tighten, people are looking for help to stretch their income and save for the experiences that can feel out of reach, and brands are responding by moving loyalty programmes to the top of their business strategy.
“We’re seeing more and more brands using the loyalty lever – from coffee to trainers, from the high street to streaming services – all competing in the same space. In these challenging times when money is tighter than ever, brands are in a unique position to demonstrate the value they can offer by making customers’ money go further. Brands have a wealth of information on their loyal customers which gives them unique insight to create rewarding offers and experiences that ensure those customers get the most from their spend.”
IAG Loyalty’s Chief Strategy & Proposition Officer, Silvia Espinosa de los Monteros, is unsurprised the lure of holidays and other treats remain strong.
“Offers and discounts are important but treats and holidays are emotional, making them harder to give up. We know that some people can’t get away right now, but with Avios, consumers can make their money go that bit further by earning on their everyday, essential spending. It means that over time consumers can get closer to the rewarding experience that means the most to them.”
As the owner and operator of the global loyalty currency Avios, IAG Loyalty is growing its list of strategic partners to give Avios’ 40 million collectors the ability to collect and redeem from their everyday spending. With partners that include American Express, Uber, Nectar, and Barclays, IAG Loyalty is developing new products and partnerships that match the changing needs of consumers.
The official press release in PDF format can be downloaded/viewed here.