CONSUMER CONNECT: LOYALTY SNAPSHOT - Q1 2021 Joan Driggs Vice President, Content and Thought Leadership - IRI
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Q1 2021 CONSUMER CONNECT: LOYALTY SNAPSHOT Joan Driggs Vice President, Content and Thought Leadership March 2021
Executive Summary
Despite the turmoil of 2020 due to COVID-19, consumers’ attitudes toward their
household financial health remains similar in 2021.
Consumer sentiment took a tumble among the dual health and financial crises of 2020
but is showing strong signs of recovery in early 2021.
As seen throughout 2020, consumers report they prefer to shop fewer stores and are
less inclined to clip coupons. Their desire to shop deals remains strong.
Among subscription service vendors, Amazon Prime holds the strongest lead, followed
by Chewy for pet products, and Walmart+.
Drug and grocery channels lead in loyalty/reward adoption, with high-income households
most likely to hold reward memberships across the most channels.
Consumers are interested in personalizing their loyalty experience.
Benefits influence membership and membership influences which stores to shop.
Consumers want to see new benefits and experiences as a reward for loyalty.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 2Consumer Sentiment Is Trending Back Up From Dismal 2020
Consumer Sentiment Index
February 2021
105
100 98.4
96.8
96.0
95 92.9
91.8
90
87.3
85
81.5
80
2015 2016 2017 2018 2019 2020 2021
Source: IRI, based on University of Michigan; Moody’s Analytics Forecasted 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 3Consumers’ Financial Health Remains
Fairly Consistent to Year-Ago Levels
Despite Higher Unemployment and Economic Challenges
Household's Financial Situation
43%
My household is making sacrifices
to make ends meet
46%
40%
My household's financial
health is strained
41%
25%
My household is having difficulty
affording needed groceries
24%
Q1 2021 Q1 2020
Agree With Statement Much More/Somewhat More
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 4Consumers Shopping Fewer Stores to Seek Deals
and Show Less Interest in Clipping Coupons
Consumer Grocery Shopping Behavior
Total Population
Make an effort to purchase my needed groceries 86%
when they are “on sale” or on deal 87%
82%
Buy store brand products to save money
83%
Make additional or unplanned purchases 81%
if in-store deals are good 82%
72%
Try new, lower priced brands to save money
71%
57%
Visit multiple retailers to keep my grocery bill lower
60%
52%
Clip coupons from circulars/newspapers
60%
31%
Order online and pick up in store
27%
27%
Order online for home delivery
26%
Q1 2021 Q1 2020
Frequently/Occasionally Summary
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 5Good Value, Convenient Store Location and Strong Loyalty Card
Discount Programs Are Key Drivers in Choosing Where to Shop
Consumer Grocery Shopping Behavior
Total Population
95%
Good sale prices
94%
94%
Lowest everyday prices
94%
94%
Convenient store location
95%
Allows me to fill my basic needs 92%
at the lowest possible cost 92%
91%
Quick and easy in-and-out
90%
87%
Assortment that allows for one-stop shopping
86%
74%
Strong loyalty card discount program
76%
Q1 2021 Q1 2020
Very/Somewhat Important Summary
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 6Amazon Prime, Chewy and Walmart+ Are the
Top Subscription Services Among Consumers
Subscription Services
Total Population
Amazon Prime 51%
Chewy
7%
Walmart+ 4%
Dollar Shave Club 3%
Instacart Express
2%
Dollar Shave Club
Shipt 2%
HelloFresh 2%
Grove Collaborative 1%
BarkBox 1%
Thrive Market 1%
None of these 43%
Source: IRI_SubscriptionServices_January'21_Omnibus
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 7Drug, Grocery and Online Paid Programs Are
Top Shopper Loyalty/Rewards Membership Choices
Shopper Loyalty Card/Rewards Membership
Total Population
Drug (such as CVS, Walgreens) 74%
Grocery (such as Kroger, Safeway) 69%
Online with annual fee (such as
56%
Amazon Prime, Walmart+, Shipt, Instacart)
Club (such as BJ’s, Costco) 51%
Food/Beverage Restaurant
43%
(such as Starbucks, Dunkinʼ)
Mass/Supercenter (such as Walmart, Target) 35%
Specialty Beauty (such as Ulta, Sephora) 27%
Convenience (such as 7-Eleven, Circle K) 26%
Dollar (such as Dollar General, Family Dollar) 16%
Q1 2021
I have a shopper loyalty card/rewards membership Summary
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 8High-Income Group More Likely to Have Shopper
Loyalty/Rewards Membership Across Most Channels
Shopper Loyalty Card/Rewards Membership Shopper Loyalty Card/Rewards Membership
By Income By Generation
66% 55%
Drug 74% Drug 70% 79%
78% 76%
81% 63% 80%
62% 66%
Grocery 71% Grocery
69% 71%
70%
80% 67%
49% 64%
55% 68%
Online with annual fee 59% Online with annual fee 60%
70% 32% 51%
31% 29% 52%
Club 43%
60% Club 52%
51%
64% 47%
35% 46% 61%
39%
Food/Beverage Restaurant 44% Food/Beverage Restaurant 50%
32%
55% 15%
29% 60%
37% 51%
Mass/Supercenter 37% Mass/Supercenter 36%
44% 17% 28%
19% 53%
21% 41%
Specialty Beauty 30% Specialty Beauty 32%
35% 15% 10%
30% 20%
28% 36%
Convenience 28% Convenience 34%
22% 19%
5%
23% 35%
18% 25%
Dollar Dollar
9%
14% 11% 16%
3%
< $35K $35K-$54.9K $55K-$99.9K > $100K Gen Z Millennials Gen X Boomers Seniors
Agree With Statement
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 9Free Membership, Gas Discount and Ability to Spend Points Are
Main Reasons Consumers Subscribe to Shopper Loyalty Programs
Reasons For Obtaining Shopper Loyalty Card/Rewards Membership
Total Population
It was free 74%
Gas/fuel discount 56%
Ability to accrue points to spend 55%
Cash reward 39%
Personalized or special offers 38%
Membership benefits made it
38%
worth the annual fee
Free beverage/food item 35%
Access to special members-only events 25%
Access to new product(s) 13%
Option for mobile checkout 12%
Q1 2021
Base=Those Respondents Who Have Shopper Loyalty Card/Rewards Membership
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 10Free Membership Is the Top Reason Among Income Groups
While Ability to Spend Points Is Important to Mid-Income Groups
Reasons for Obtaining Shopper Loyalty Reasons for Obtaining Shopper Loyalty
Card/Rewards Membership Card/Rewards Membership
By Income By Generation 77%
75% 77%
It was free 76% It was free
74% 76%
77% 72%
66%
51% 41% 60%
56%
Gas / fuel discount 61% Gas / fuel discount 55%
58% 57%
42%
71%
54%
57% 61%
Ability to accrue points to spend) 57% Ability to accrue points to spend)
55% 51% 56%
46%
36% 28%
44%
Cash reward 36% Cash reward 39%
44%
43% 38%
36%
50%
38%
33% 44%
Personalized or special offers 41% Personalized or special offers
41% 35% 41%
24%
27% 34% 42%
Membership benefits made 35% Membership benefits made
it worth the annual fee 40% it worth the annual fee 35%
47% 28% 39%
37% 28% 44%
Free beverage/food item 32% Free beverage/food item
35% 40%
34% 28%
13%
25% 18% 28%
Access to special 25% Access to special
27%
members-only events 26% members-only events 22%
23% 16%
16% 22%
Access to new product(s) 13% Access to new product(s) 19%
13%
11% 13% 9% 10%
14% 6%
12% 16%
Option for mobile checkout 11% Option for mobile checkout
14% 9% 16%
3%
< $35K $35K-$54.9K $55K-$99.9K > $100K Gen Z Millennials Gen X Boomers Seniors
Base=Those Respondents Who Have Shopper Loyalty Card/Rewards Membership
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 11Free and Same-Day Delivery and Access to Wider
Assortment Are Top Paid Membership Expectations
Expected Services/Benefits With a Paid Membership
Total Population
No minimum order for free shipping 58%
Same-day delivery 39%
Access to wider assortment
31%
than what's found in-store
1-day delivery 28%
Pickup 27%
Prescription delivery 23%
2-day delivery 21%
Checkout from phone if I shop in the store 19%
Ability to communicate with personal shopper 16%
Q1 2021
Base=Those Respondents Who Consider/ Not Interested In Having Shopper Loyalty Card/Rewards Membership For Online With Annual Fee
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 12Among Generations, Gen Xers and Boomers Expect
Free Shipping Without Order Limit From Paid Membership
Expected Services/Benefits Expected Services/Benefits
With a Paid Membership With a Paid Membership
By Income By Generation
55% 65% 41%
No minimum order No minimum order 54%
58% 61%
for free shipping for free shipping 60%
65% 52%
38% 15%
41%
Same-day delivery 41% Same-day delivery 48%
45%
35% 38%
24%
39% 41%
Access to wider assortment 20% 33% Access to wider assortment 28%
than what's found in-store than what's found in-store 36%
26% 29%
30%
31% 36%
25% 32%
Pickup 26% Pickup 32%
29% 23%
24%
30% 34%
22% 26%
1-day delivery 35% 1-day delivery 34%
31% 28%
18%
21% 35%
Checkout from phone if 19% Checkout from phone if 24%
I shop in the store 19% I shop in the store 21%
18% 17%
12%
22% 15%
21% 31%
2-day delivery 20% 2-day delivery 26%
17%
24% 7%
17% 24%
Ability to communicate 18% Ability to communicate 18%
19% 20%
with personal shopper with personal shopper 14%
17% 14%
28% 25%
24% 24%
Prescription delivery Prescription delivery 24%
19% 21% 23%
17%
< $35K $35K-$54.9K $55K-$99.9K > $100K Gen Z Millennials Gen X Boomers Seniors
Base=Those Respondents Who Consider/Not Interested In Having Shopper Loyalty Card/Rewards Membership For Online With Annual Fee
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 13Gen Xers Lead in Loyalty Program
Adoption and Use, Followed by Millennials
Loyalty Across the Generations
Loyalty Program Adoption Writing Positive Reviews
57% 66%
54% 60% 71% 59%
Enrolled in one of five loyalty Likely to write positive review
rewards programs About a brand they are loyal to
Loyalty Program Use
Millennials
(born 1982-1999)
44%
Generation X
(born 1965-1981)
40% 40%
Baby Boomers
(born 1946-1964) Make purchases that earn rewards/benefits
several times a week
Source: The truth about customer loyalty, KPMG international, 2019
Source: https://home.kpmg/xx/en/home/insights/2019/11/customer-loyalty-survey.html
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 14More Than Four in 10 Consumers Are Willing
to Pay for Annual Membership of $50 or Less
Willing to Pay for Annual Membership
Total Population
Under $25 20%
$25 10%
$50 14%
$75 3%
$100 5%
$125 or more 1%
Not willing to pay 48%
Q1 2021
Base=Those Respondents Who Consider/ Not Interested In Having Shopper Loyalty Card/Rewards Membership For Online With Annual Fee
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 15Shopper Loyalty Programs Influence Choice of Stores to Shop
Influence of Shopper Loyalty Card/Rewards Membership Program on Shopping at Store
Total Population
Extremely influential 22%
Somewhat influential 51%
Not very influential 17%
Not at all influential 10%
Q1 2021
Agree With Statement
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 16About a Third of Consumers Cite Membership Fees
as the Main Reason for Canceling a Loyalty Program
Reasons for Canceling Shopper Loyalty Card/Rewards Membership
Total Population
I don’t want to pay for membership 32%
Didn’t want to pay an annual fee for membership 30%
I no longer shop at the retailer 28%
Not worth the hassle 16%
Do not need the products the retailer sells 12%
I have too many loyalty cards 6%
Due to privacy concerns/do not want
6%
to share my personal information
Did not know I was signing up for a shopper
3%
loyalty card/rewards membership
Q1 2021
Agree With Statement
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 17Across Generations, Gen Z Cites the Most
Reasons for Canceling a Loyalty Membership
Reasons for Canceling Shopper Reasons for Canceling Shopper
Loyalty Card/Rewards Membership Loyalty Card/Rewards Membership
By Income By Generation
34% 55%
I don't want to pay 32% I don't want to pay 37%
for membership 32% for membership 30% 34%
33%
22%
31% 45%
Didn't want to pay an annual 29% Didn't want to pay an annual 33%
fee for a membership 34% fee for a membership 30% 30%
28% 23%
26% 34%
25% 30%
I no longer shop at the retailer I no longer shop at the retailer
33% 27% 32%
31%
19%
17% 17%
18% 19%
Not worth the hassle 14% Not worth the hassle 16%
17% 13% 15%
11% 17%
Do not need the products 13% Do not need the products 14%
the retailer sells 13% the retailer sells 12% 12%
13% 11%
6% 0%
8% 10%
I have too many loyalty cards 6% I have too many loyalty cards 7%
9% 3% 4%
5% 5%
Due to privacy concerns/do not want 7% Due to privacy concerns/do not want 7%
6% 5%
to share my personal information to share my personal information 6%
6% 7%
Did not know I was signing up for a 4% Did not know I was signing up for a 9%
3% 5%
shopper loyalty card/ shopper loyalty card/
rewards membership
3%
rewards membership 2% 2%
1% 2%
< $35K $35K-$54.9K $55K-$99.9K > $100K Gen Z Millennials Gen X Boomers Seniors
Agree With Statement
Source: IRI Consumer Connect™, Q1 2021
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 18Consumers Are Interested in Personalizing Every Element
of Their Loyalty Experience, From Earning to Redeeming
Survey Question
Indicate if You Agree With the Following Statements About Loyalty Programs
Allow me to select benefits and rewards I receive 85%
Recognize me as a member 76%
Personalize the way I earn based on my purchases 74%
Personalize the way I earn based on my preferences 73%
Offer personalized rewards 72%
Show me products/services based on preferences 67%
Show me products/services based on purchases 64%
Source: https://www.merkleinc.com/thought-leadership/white-papers/2020-loyalty-barometer-report
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 19Retailers Are Moving Toward Integrated and Unified Rewards
Programs to Provide Personalized Offers and Experiences
Retailers Expand From Point-Based Loyalty Programs
Phase Phase Phase Phase Phase
01 02 03 04 05
About Point-based loyalty Advanced loyalty Multi-brand, tier- Privilege loyalty Umbrella loyalty
reward cards with reward cards, offering based loyalty reward program with program with
point accumulation vouchers/coupons in cards with an option to personalized and enhanced convenience
on every purchase addition to redeemable use across multiple customized offers — everything under
points retail brands one ecosystem —
along with rewards
Access to purchase- Enables cross-selling, Enhanced customer Increased engagement Ability to offer
Benefits integrated experiences
related data product bundling — engagement — one — offers ecosystem
for retailers between online and
using insights derived card for a group of of value, service and
from transactional data retailers content; additional offline channels; tracks
income as subscription the entire consumer
fees behavior inside the
ecosystem
Challenges Low customer Unable to meet Expensive scheme for No tier-based rewards;
growing customer Available in China and
for retailers/ participation/retention retailers with little no single interface
— unused points act as demand of those who customer insight U.S., but other countries
customers to access grocery
liability for the retailers seek more value than around each individual may rely on outside
shopping, video
just reward points or brand delivery, with no
or music
vouchers home/overnight delivery
Examples* MasterCard Rewards DSW VIP program Lancôme tiered Run Everything Labs Amazon Prime
loyalty program Rewards
*Note Examples based on above program definitions Source: https://home.kpmg/xx/en/home/insights/2019/11/customer-loyalty-survey.html
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 20To Succeed, a Loyalty Ecosystem Should Be
Centered Around Seven Design Principles
Shared Consumer in Mind
1 The program must be highly personalized to the individual consumer, leveraging the full stack of consumer data across brands
to offer personalized messages, offers and experiences. Brands should mutually understand the value of the consumer.
Brand Synergy
2 The program must be structured to elevate brand equity. Every brand must have an important role in the given ecosystem and
provide value to that ecosystem through its products and/or services.
Diversity of Products and Services
3 The program must provide consumers with value through tangible goods, services or experiences in order to reinforce the
program’s underlying appeal. Brands should develop common features and benefits together.
Seamless Consumer Experience
4 Sign-ups, use and redemption must be intuitive and responsive, keeping the program simple for consumers.
All-In Brand Commitment
5 Companies must be willing to commit to the partnership, allocating adequate marketing spend and having clear agreements
about sharing consumer data in a way that adheres to all relevant regulations.
Alignment on Governance Process
6 Brands should enter the partnership with aligned strategies and goals, defined roles and responsibilities, and a process for
managing risk effectively.
Data and Tech Focused on Connectivity
7 Brands will need to ensure, within the confines of the shifting regulatory landscape, that their data can be exported or used as
needed — for example, through the use of application programming interfaces (APIs). Brands within the ecosystem need to
commit to standards and processes for tracking key performance indicators, adhering to regulations, and establishing
protocols for connecting technologies and sharing data.
Source: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/preparing-for-loyaltys-next-frontier-ecosystems
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 21About the Consumer Connect Index
The Consumer Connect Index (CCI) is intended to monitor
consumers’ financial health and their purchase behavior in terms
of brand loyalty, attitudes toward organic/natural food and
beverages, perception of national vs. store brands, and frequency
of using retailer and manufacturer coupons.
CCI uses the data collected through the Consumer Connect
Survey every quarter, which is benchmarked to Q1 2020
(indexed at 100).
Higher CCI index means that consumers have better financial
health, are more loyal to certain brands in each category, give
higher importance to organic/natural food and beverages, have
better perception toward national brands, and use retailer and
manufacturer coupons less frequently.
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 22Methodology
Sample and Assumptions
The Consumer Connect Survey is fielded to a nationally representative Consumer Network sample of over
2,000 respondents every quarter. Sample demos are comparable over time and changes in the state of the
economy and the CPG industry are reflected in each quarter.
Measures
CCI is measured based on responses to five questions:
1. My household’s financial health is good (Agreement Scale)
2. Store brands are a better value than national brands (Agreement Scale)
3. Download coupons from a retailer/manufacturer website (Frequency Scale)
4. Good selection of natural/organic food/beverages (Importance Scale)
5. I have a few brand(s) in each category I will stay loyal to (Frequency Scale)
Calculation
Calculate weighted CCI = (current
proportion for each quarter’s weighted
Get total weighted
question by 3 age average of all 5
proportion based on
groups — (T2B for all questions divided by
each question
questions except B2B the average of Q1
for the 3rd question). 2020)*100
© 2021 Information Resources Inc. (IRI). Confidential and Proprietary. 23CONTACT US IRI Global Headquarters
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