New Study: Australians Love Local Loyalty Programs — When They Can Find Them

In Making Loyalty Work For Small Businesses: Australia Edition, a PYMNTS and Pollinate collaboration, we discover that shopping local businesses is a bigger part of Australian consumers’ lives than in other markets studied, with 55 percent having made at least one purchase from a High Street small or medium business (SME) in the prior month.

Sounds great — until the report notes that, conversely, “only 22 percent of Australian consumers see local businesses as their primary merchants, even though many more shop from them for specific products. This signals a strong demand for high-street commerce, one that local businesses across the nation have an opportunity to use to drive even more foot traffic.”

Loyalty and rewards are key to unlocking new opportunities for Australia’s SME, as is amply illustrated by the research. PYMNTS surveyed a census-balanced panel of over 1,050 Australian consumers as part of a larger study of over 4,500 consumers in Australia, Brazil, the U.K. and the U.S., seeking insights on offerings helping bring new customers to that nation’s SMEs.

By Demos Driven

Beliefs that prompt local shopping as opposed to with mass merchants, though stronger in Australia than any other market studied except Brazil, still need a nudge to close the gap.

As for the demographic variations, “The younger their generation, the more likely Australian consumers are to say that local commerce is even more important now than it was before March 2020,” according to Making Loyalty Work For Small Businesses: Australia Edition.

It notes that 58 percent of Australian Generation Z consumers “believe shopping locally has become critical since the pandemic’s onset, compared to 43 percent of baby boomers and seniors” feeling likewise.

Their reasons for supporting local retail revolve around hometown health, as the study states that “Australian consumers stand out for being the most likely of all to believe that shopping locally is import ant because it helps keep money in their communities and reinvests in their local economies. Fifty-four percent and 51 percent of Aussies say shopping local is important for these reasons, respectively. These figures are 42 percent and 38 percent for U.K. consumers, by contrast.”

Local Loyalty Lacking Down Under

What comes through in the Australia findings is a somewhat bifurcated sense of supporting local retail for all the right reasons but wanting more in return for that loyalty.

Per Making Loyalty Work For Small Businesses: Australia Edition, “75.6 percent of Aussies use at least one loyalty and discount program, with each user being signed up for an average of 2.9 programs at any given time.” For comparison, U.K. consumers at 76.4 percent are enrolled in at least one loyalty program, with each user receiving rewards from 2.6 businesses.

The bottom line is that Aussies like and use loyalty programs when they are offered. However, they often are not, which is enriching enterprise-level merchants at SMEs’ expense.

“There are not nearly enough of the local loyalty programs Australian consumers want to meet their demands,” the Australia Edition states. “This is evident in the fact that 48 percent of the Australian consumers in our survey say they would like to use local businesses’ loyalty programs. This means there could be as many as 9 million Australian consumers who would use local businesses’ loyalty programs if the types of programs they want were offered.”