The Truth & BrandMapp Loyalty Whitepaper 2023/4 is a comprehensive annual snapshot of the loyalty habits of over 35,000 South African adults with a gross monthly household income of R10,000 or more. According to the white paper, 76% of South African consumers use loyalty programmes, up by 3 percentage points from 2022.
This doesn’t change much across income and gender but younger consumers (U25s) are still using loyalty programmes less. Most consumers are using loyalty programmes more this year, up by approximately 30%.
For the second time, there is additional insight into the loyalty behaviour of South Africa’s mass market consumer from MoyaApp included in the loyalty white paper. MoyaApp has researched 11,500 consumers with a household income of R10,000 per month or less. The loyalty white paper is written and released by Truth, a Cape Town based consultancy firm specialising in customer loyalty.
This year, Checkers Xtra Savings takes first place as the most used loyalty programme for economically active consumers with 78% usage. They are marginally ahead of Clicks ClubCard (by 0.4%), which had the title of most used loyalty programme in four out of the previous seven white papers. For mass market consumers, Shoprite Xtra Savings regains its place in first position as the most used loyalty programme.
In a quote from Meredith Allen, Head of Rewards and Personalisation from ShopriteX episode 428, Let’s Talk Loyalty – September 2023: ‘Xtra Savings is operated in two of Shoprite’s banners: Checkers and Shoprite. They experience approximately 80% sales coverage through Xtra Savings, which is comparable, if not better, than the world’s best loyalty programmes.”
There are no other changes in terms of top 10 positions for economically active consumers and FNB eBucks remains the only non-retail loyalty programme within the top 10 most used loyalty programmes.
In terms of the loyalty programmes which South Africans claim they can’t live without, 37% of economically active consumers’ state that Discovery Vitality is their number one loyalty brand of choice. There is a change to the mass market segment this year as 41% of mass market consumers say they can’t live without the Capitec Live Better programme. This is up by 4 percentage points compared to last year.
Benefits Most Enjoyed By Consumers
Over the years, we have seen that cashback is consumers’ number one loyalty benefit and the 2023/4 study is not very different. For the economically active consumers, cash is still king. The top three benefits enjoyed by economically active consumers are related to cashback or points converted into cash. Interestingly, when it comes to the most preferred benefit for mass market consumers, it is airtime and data, followed by cashback and points converted into cash.
Industry To Watch: Fuel
Fuel is one industry sector which has seen an explosion of loyalty programmes in the past 24 months. Previously, the fuel industry in South Africa rewarded its customers for fuel brand choice via partnerships only. Legislation restricts the direct discounting of fuel and hence the partnership model enabled fuel brands to drive potential increased sales via partnership programmes. The biggest of these is Engen, in partnership with FNB eBucks and Clicks ClubCard. All fuel brands are using the partnership model. We now see four proprietary fuel programmes in the market. Shell V+ launched first in December 2019, Sasol Rewards in April 2022, Total Energies Club in April 2023 and Astron Energy Rewards later in 2023.
Key Take Outs
• 30% or more South Africans claim they are using loyalty more than last year.
• Wealthier consumers use 9.4 loyalty programmes, whereas mass market consumers use 4.8 programmes each.
• The main reason consumers don’t use programmes at all is not being able to earn rewards due to spend capacity.
• Some consumers prefer to build up rewards and some prefer instant gratification. However, this group isn’t mutually exclusive ; 47% of economically active consumers like to do both and are the most savvy and demanding loyalty members.
• There is a strong dislike of points expiry and minimal enthusiasm for programme tiering.
• Consumers are claiming that loyalty programmes influence their choice of brands across all industries, with grocery stores and fuel forecourts being the most influenced.
• Swiping a card remains the wealthier consumers’ preferred loyalty identifier and providing a cellphone number remains the identifier of choice for mass market consumers.
To view the full 2023/4 Truth & BrandMapp Loyalty Whitepaper, click here.
TRUTH
www.truth.co.za
