Retailers Simplify Loyalty Programs to Increase Consumer Frequency

Consumers want loyalty rewards, but not if it means having to work their way through a complicated digital interface.

Retailers including Albertsons and PetSmart are updating their programs to meet this demand for streamlined experiences.

Albertsons announced Wednesday (April 3) the debut of a streamlined loyalty experience, shifting to a single points-based system, enabling automatic rewards redemption and more.

“Our loyal for U members are at the heart of our business, and we are continuously working to help them bring more to the table and foster lifelong customer relationships,” Sean Barrett, the grocer’s chief marketing officer, said in a statement, adding that the refreshed program is designed to be “easier and more convenient than ever.”

PetSmart, meanwhile, is updating its loyalty program to make it “simplified and more flexible,” with a three-tiered model based on annual spending and with more personalized offers, Quartz reported Tuesday (April 2).

Earlier this year, CVS Pharmacy streamlined its ExtraCare loyalty program, consolidating the program into a single membership with two tiers, simplifying the experience for CVS Pharmacy customers.

“We heard from some of our members that they found value in our loyalty programs, but that the multiple programs could be hard to manage,” said Zach Dennett, vice president of loyalty, omnichannel and Hispanic formats at CVS Health in an interview with PYMNTS. “So, we’ve been on a journey to combine what was at one point four different programs into a single program with two tiers.”

Streamlined experiences can be key to customer loyalty. The PYMNTS Intelligence report “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” which drew from a survey of more than 3,500 U.S. consumers, found that 40% of shoppers said they consider how easy to navigate a merchant’s online store is when selecting where to make purchases online.

Overall, as retailers innovate on their loyalty programs, the bar is being raised, as Len Covello, chief technology officer of Engage People, told PYMNTS in an interview in February. He noted that merchants are going to continue to need to fine-tune, and in some cases overhaul, their rewards offerings.

“Consumers have higher expectations of what they’re going to get, ultimately, from loyalty programs,” he said.

The majority of retail shoppers want to be offered rewards programs, according to PYMNTS Intelligence’s study “2024 Global Digital Shopping Index: The Rise of the Click-and-Mortar Shopper and What It Means for Merchants,” commissioned by Visa Acceptance Solutions. The report, which drew from a survey of nearly 14,000 consumers across seven countries, found that 72% want omnichannel rewards or loyalty programs.

Yet it is not enough to have such a program; it is important to continually refresh and innovate.

“You can’t just launch a loyalty program and then let it be,” MoneyLion Chief Marketing Officer Cynthia Kleinbaum Milner told PYMNTS in an interview last month. “You always have to be adding new benefits, and those benefits have to be developed based on what you learn from the users.”

Loyalty programs are an area where many retailers fall short, as suggested findings from the “U.S. Edition” of the 2024 Global Digital Shopping Index study, which drew from a survey of more than 2,400 U.S. consumers. The report noted that 28% of consumers cannot find reward or loyalty programs when they look for them, making them one of the features where merchants are most likely to fall short of shoppers’ expectations.

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