These Consumer Trends Are Shining A Spotlight On Premium Loyalty

0aaaTom Caporaso Clarus Commerce

In this Age of the Customer, consumers seemingly have limitless options at their fingertips. Limitless options have created heightened expectations, which make it more difficult than ever for retailers to earn and retain customer loyalty.

In fact, the 2019 Premium Loyalty Data Study says that nearly 70% of consumers agree that their loyalty is more difficult for a retailer to maintain than ever before.

Consumer expectations are being influenced by factors outside of retail. And due to these factors, many retailers are rethinking their strategies around customer loyalty.


Although premium loyalty isn’t a new model with Prime launching in 2005, there is considerable buzz around it now. So, why are consumers adopting premium loyalty programs so rapidly? It’s because of these three global trends impacting all industries.

Unlimited Choice Leads To Consumer Empowerment

The first trend is a byproduct of the Age of the Customer.

Consumers have unlimited choices and resources to obtain product information and find the best price with the fastest shipping. Looking for a pair of blue running sneakers? Google returns almost six million results in a little over half a second. And even for retailers with unique products, it’s harder to differentiate on products alone when they can be copied so easily by competitors.

Just look at online mattresses. What was a novel idea a few years ago has now become a commodity with 175 online mattress companies to choose from. This is happening across every industry. Unlimited consumer choice leads to massive competition.

Seemingly infinite choice is changing the retail industry and making it even harder for brands to retain loyal customers. That’s why differentiating your brand from your competition is more important than ever.

But in this Age of the Customer, with unlimited options at consumers’ fingertips, retailers can seize a massive opportunity – An extremely engaging loyalty program. When your customers have unlimited choice, they are empowered and retaining them as members of your loyalty program is critical.

However, one-size-fits-all program that just rely on points don’t offer enough differentiation.

That’s why retailers are rethinking their strategies, identifying customer pain points, and creating offers that address them through a series of loyalty moments.

Giving your customers VIP treatment through a premium loyalty program and showing them how special they are is a powerful way to retain your loyalty customers. It’s more critical than ever to identify customers across channels, build more robust customer profiles, and create personalized experiences that result in emotional connections.

Your Customers Live In An Instant Culture

Everybody wants everything instantly today. Instant affects everything. We want instant benefits everywhere. We’ve become an instant culture. Customers expect more, including weekly benefits from a premium loyalty program.

According to the same study above, 67% of consumers said that instant discounts that can be used whenever they shop is a perk that motivates them to invest in a premium loyalty program. Benefits from traditional loyalty programs are not instant. They work very slowly and were more effective in a world where consumers didn’t have as many choices.

Points are great and consumers enjoy earning them. But waiting for points doesn’t sit well with most consumers in the instant culture they expect.

More loyalty programs should consider the impact of this trend and look at factors that affect consumers that are experiential in nature. We know that experiential benefits create the deepest emotional engagement with customers.

Take CVS CarePass, for example. For $5 per month or $48 per year, members get instant transactional benefits like free one- to two-day delivery on eligible items and prescription drug orders and a 20% discount on certain CVS Health brand products. They also get exclusive experiential benefits like 24/7 access to a live pharmacist. And the program did so well in test markets that CVS Health decided to roll it out nationwide ahead of schedule.

From Movies to Clothes to Meals, People Love Subscriptions

Everything seems to be a subscription now. Subscription programs have become universal. The concept of ownership has changed. Your customers are now comfortable paying as they go for the things they value. And this just doesn’t apply to media anymore.

Just look at Birchbox, Stitch Fix and Dollar Shave Club. Whether it’s clothes or music, people raise their hands to join subscriptions that they value. Loyalty is no different.

Amazon Prime eclipsed 100 million members last year even after raising the annual membership fee. But you can’t just charge for the program and call it a premium loyalty program. All you have then is a traditional loyalty program that costs your consumers money.

While a subscription program doesn’t equate to a retail premium loyalty program, the thought process behind both are similar: Provide a service/benefits/experiences that a consumer will pay a recurring fee for because it is valuable.

Successful subscriptions are two-way commitments and premium loyalty programs need to act that way as well. Subscription is redefining industries because it gives all the power to consumers. That’s why retailers can persevere in the retention department with the right loyalty program.

Retailers Should Strategize Around These Consumer Trends

Given the booming popularity of subscription services and the allure of premium loyalty programs for your best customers, retailers should strategize around these three trends.

Remember, your customers are empowered and have more choices. They expect instant. And they are extremely comfortable with subscriptions.

Keep these trends in mind when you’re thinking about your own loyalty program. After all, these trends don’t just apply to one industry. This is how your consumers are living their lives.


Tom Caporaso is CEO of Clarus Commerce, the only company specializing in building, managing and optimizing premium loyalty programs. He first joined the company in 2009, serving as its president and COO. In addition to overseeing strategic direction of the company, Caporaso also serves as the fearless leader of Clarus’ award-winning culture. He currently has a 100% CEO approval rating on Glassdoor and has helped the company earn the Connecticut Top Workplaces award every year since 2013. A solidified thought leader in the loyalty, retail and marketing industries, Caporaso’s commentary can be found in national business publications, including U.S. News & World Report, Reuters and CNBC, and top trade publications like Retail Dive, Martech Today and Internet Retailer.

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