Loyalty programs | “Canadians expect a lot more than they actually get”

Nearly two-thirds of Canadians say they are willing to “sacrifice some of their privacy” to join a loyalty program, in exchange for discounts of up to 15% on their grocery, restaurant or prepared meal bills , reveals a study conducted by Dalhousie University.

Nathaelle Morissette
The Press

However, in reality, consumers agree to reveal their data for much less generous reductions. Cards and applications intended to accumulate points in supermarkets – and not in other types of businesses – allow customers on average to benefit from around 5% discounts, according to Hans Laroche, partner at R3 Marketing.

“Canadians expect a lot more than they actually get,” recognizes Sylvain Charlebois, director of the Laboratory of Analytical Sciences in Agrifood at Dalhousie University, whose report will be made public on Wednesday.

Nearly 90% of consumers in the country join at least one rewards program. “Consent is almost implicit,” he adds. According to the LoyauT 2021 study, carried out by R3 Marketing and Léger, nearly 13.5 programs occupy Canadians’ wallets or smartphones, compared to 8.9 in 2017. In everyday life, they use 7.1, compared to 5.9 four years ago.

This way of saving is becoming increasingly popular in an inflationary environment. Thus, retailers, if they want to survive, cannot help but set up a rewards program, say the experts consulted.

What the Dalhousie University report says

Domestically, consumers are willing to give personal information if cards and apps offering loyalty programs offer “deep discounts” on food purchases, the researchers found. Nearly 65% ​​of people surveyed are open to the idea of ​​revealing personal data in exchange for a discount of up to 15% on groceries, restaurants or the purchase of prepared meals. By comparison, 43% of respondents would do so for a 10% discount. “Essentially, beyond the legal obligations of food companies, Canadians are negotiable, but they must see the value,” the report read.

A win-win agreement

According to Hans Laroche, the members of the various programs are aware that they will derive benefits in exchange for their data. That’s why they’re in on the game. “People increasingly understand that being identified with a loyalty card or a mobile application is a process of exchange,” he says. Yes, I reveal my data to you, but come back to me with offers and relevant content. »

“If you’re a Best Buy loyalty program customer and 90% of the products you buy are photography equipment, you won’t be interested in an email saying the dishwashers are on. promotion, he says. Value comes from two things: discounts and content. Don’t send me deals on newborn diapers if I’m in my 60s and no longer have kids at home,” he also gives as an example.

A necessity for retailers

While membership in loyalty programs is growing in popularity with consumers looking to save, these are also becoming a necessity for retailers. “It has become an obligation,” says Jean-Maximilien Voisine, founding president of Milesopedia, an information and reference site on the various loyalty programs.

“It’s a way of being close to your customers, not necessarily to know their whole personal life, but to be able to adapt to inventory management, for example. It would be a bit old school not to go in that direction. »

“You can’t be a retailer and not know your customers,” adds Hans Laroche. That’s over. There aren’t many businesses that can survive without knowing their customers. More and more, programs are using data, not just to sell, but to create engagement, to increase the frequency of interaction with the brand. »

“It was written in the sky that IGA would land from Air Miles, he recalls. People no longer saw the value of Air Miles. It took months and years before you could accumulate. And the retailer did not have access to the data. »

At the beginning of the month, IGA customers learned that they would no longer accumulate points on their Air Miles card while shopping for groceries. Empire, IGA’s parent company, has acquired Stage+ with Scotiabank, marking the end of a 20-year relationship with Air Miles.

The best strategy for the consumer

For customers who want to reduce their grocery bill, what is the best strategy to use? “My advice is not to keep your points like RRSPs. They must be used frequently, believes Mr. Voisine. Do not keep your points for 10 years. It’s no use. It’s like keeping money in your checking account and not growing it. »

“The best strategy for the consumer is to see where he makes the most purchases and to join the programs of these retailers,” suggests Hans Laroche.

Is there a danger?

In 2019, Tim Hortons’ mobile app update introduced a new feature to track users’ movements without them knowing. This notably allowed the chain of donut and coffee restaurants to know the different places frequented by customers. Following an investigation, federal and provincial privacy commissioners concluded that there was a “massive breach” of privacy. Although there is reason to be wary, Hans Laroche insists that a “serious retailer” will not misuse personal data. “Few big brands are going to afford to do unethical things with data,” he says. The danger for any manager who has a loyalty program, he acknowledges, however, is to have his data stolen. »