The top five loyalty programs by usage include Checkers Xtra Savings, PnP Smart Shopper, Clicks Clubcard, Capitec Live Better Rewards, and Spar Rewards.
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GLOJust over a quarter of South Africans have faced a decrease in their household income since early 2020. This, combined with a rising inflation rate (7.1% nationally, 17% for an FMCG basket, comparing 6M Feb 22 to 6M Feb 23), has compelled South Africans to reassess their household spending habits and prioritize opportunities to save more.
One of the primary methods employed for maximizing savings is through accessing discounts, promotions, and benefits offered by store loyalty cards. Nearly all connected South Africans (99%) utilize these cards, with a third of users increasing their usage compared to a year ago.
The top five loyalty programs by usage include Checkers Xtra Savings, PnP Smart Shopper, Clicks Clubcard, Capitec Live Better Rewards, and Spar Rewards. While Checkers Xtra Savings is utilized across different income brackets, it, along with Clicks Clubcard, Dis-Chem Benefit, and Woolworths Rewards, is more prominent in upper-income households. On the other hand, lower-income South Africans tend to favor loyalty programs offered by telecom providers such as Vodacom’s Vodabucks and MTN’s Yellowbucks.
When designing a loyalty program, two key considerations come into play. Firstly, the loyalty mechanism, which is the actual solution that garners the most interest when consumers contemplate their purchasing options. Preferred mechanisms include cash back into a bank account, discount vouchers, and cash back into the loyalty card for future use with the brand.
Secondly, the offer should build upon the existing equity of the brand over time, impacting brand predisposition and aligning with the brand personality.
According to research, South African loyalty programs each have their strengths:
- Checkers Xtra Savings offers the best value, followed by Capitec Live Better Rewards, Clicks Clubcard, and PnP Smart Shopper.
- The easiest to understand programs are Checkers Xtra Savings and Clicks Clubcard.
- The easiest to redeem are MTN Yellowbucks, Capitec Live Better Rewards, and Vodacom.
- Clicks Clubcard, PnP Smart Shopper, and Shell V+ are the easiest to earn points with.
- Capitec Live Better Rewards, Checkers Xtra Savings, and FNB eBucks have the best partnerships.
- Checkers Xtra Savings and PnP Smart Shopper offer the best discounts.
- Clicks Clubcard and Checkers Xtra Savings provide the best benefits.
Given that loyalty programs closely align with areas of household budgets being prioritized, such as food and personal care, they have become increasingly significant during the current crisis. Loyalty programs related to groceries and beauty and personal care are particularly meaningful. Additionally, data purchasing through platforms like TikTok, Instagram, and Facebook is likely a top priority, though not directly tracked.
In the current climate, loyalty programs have shifted from being valuable assets to essential tools for brand success. Ensuring that program offerings are clear, easy to understand, easy to redeem, and offer real value should be a top priority for every brand.
