GET WITH THE PROGRAM - Worldwide | Nielsen

1 GET with THE PROGRAMCARD-CARRYING consumer PERSPECTIVES ON retail LOYALTY- PROGRAM PARTICIPATION AND PERKSNOVEMBER 20162 GLOBAL retail LOYALTY SENTIMENT REPORTFAITHFUL FOLLOWERS OR FAIR-WEATHER FANS?AROUND THE WORLD Done well, loyalty programs can help drive more frequent visits and heavier purchasing. More than seven in 10 global respondents (72%) agree that, all other factors equal, they ll buy from a retailer with a loyalty PROGRAM over one without. More than half of global loyalty- PROGRAM participants (51%) say product discounts are among their three most-valued loyalty- PROGRAM benefits, followed by monetary rewards in the form of rebates or cash back (45%).

2 Generic deals, however, create little differentiation; retailers must focus on connecting with consumer needs and delivering greater value. Monetary rewards are important everywhere, but non-monetary rewards resonate more strongly in some African/Middle Eastern countries than globally. Examples include recognition as a valued customer in Morocco, Egypt and Pakistan and charitable donations in Egypt and Morocco. Consumers crave flexible loyalty programs . Roughly eight in 10 global loyalty- PROGRAM participants say it is somewhat or very appealing to be able to earn rewards regardless of whether a purchase was made in store, on a website or on a mobile device (81%) and to choose among several types of rewards (79%).

3 Digital tools and features are particularly appealing in Asia-Pacific, where the highest percentage of loyalty- PROGRAM participants in the Worldwide study rate as appealing store-specific loyalty mobile apps (69%), integration with digital payment systems (78%) and integration with third-party apps that consolidate loyalty- PROGRAM information (63%).3 Copyright 2016 The Nielsen CompanyWhen it comes to shopping, choice is the operative word. Whether consumers shop at a specialty retailer or a mass merchandiser, on a computer or a mobile device, they have never had so many ways to please the palate, discover the deal or pay the piper.

4 Differentiating your brand in such a crowded space is not only critical, but also more difficult than retail loyalty PROGRAM can be an effective way to create competitive advantage by reducing customers likelihood to switch stores. Indeed, more than seven in 10 loyalty- PROGRAM participants in Nielsen s Global Loyalty-Sentiment Survey (72%) somewhat or strongly agree that, all other factors equal, they will buy from a retailer with a loyalty PROGRAM over one without. Loyalty programs can also help drive more frequent visits and heavier purchasing.

5 Nearly three-quarters of global loyalty- PROGRAM participants (74%) agree that loyalty programs make them more likely to continue doing business with a company, and two-thirds (67%) agree that they shop more frequently and spend more at retailers with loyalty retailers are not the only ones benefiting from loyalty- PROGRAM participation. Two-thirds of global respondents (66%) agree they d shop more at online retailers if these sellers provided loyalty benefits similar to those of traditional in-store retailers.

6 And increasingly, loyalty programs are at the leading edge of technology as retailers incorporate advanced analytics, mobile experiences and other digital solutions into their many shoppers appear to love loyalty programs . In fact, 66% of global respondents say they belong to one or more programs . But there is often a large gap between the number of programs in which shoppers are enrolled and the number in which they actively participate. So what distinguishes the winners from the rest of the pack?

7 While many tried-and-true retail loyalty- PROGRAM fundamentals can be applied anywhere in the world, there also are unique differences by country. For example, mobile loyalty apps are particularly appealing in India and China, while non-monetary retail loyalty reward programs are important in Morocco. Knowing what PROGRAM attributes resonate best with your customers will equip you to drive AGREE THAT THEY SHOP MORE FREQUENTLY AND SPEND MORE AT RETAILERS with LOYALTY retail LOYALTY SENTIMENT REPORT Loyalty programs are intended to ultimately increase a retailer s share of the consumer s wallet, said Louise Keely, executive vice president, Nielsen Global retail Practice.

8 But loyalty programs cannot be designed in a one-size-fits-all manner. There are big differences in loyalty PROGRAM preferences and habits across countries, and across consumer groups within countries. These differences include how consumers want to use technology to engage with their loyalty PROGRAM , what tangible benefits they are seeking from loyalty programs , and even how much they care about loyalty programs . Retailers need to determine who they want to bring into the store or onto the website more, and design a loyalty PROGRAM for them.

9 The Nielsen Global retail Loyalty-Sentiment Survey polled more than 30,000 online respondents in 63 countries to understand what drives consumers to participate in retail loyalty programs . We examined self-reported participation rates, the rewards or benefits valued most, and the features that are most appealing in the loyalty programs of the future. Finally, we provide insight into the ways to build and maintain a winning loyalty THE GLOBAL SURVEY METHODOLOGYThe findings in this survey are based on respondents with online access in 63 countries.

10 While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of only existing internet users, not total populations. In developing markets where online penetration is still growing, respondents may be younger and more affluent than the general population of that country. In addition, survey responses are based on claimed behavior, rather than actual metered data. Cultural differences in reporting sentiment are likely factors in the outlook across countries.