After a first survey on the impact of COVID-19 on loyalty last May, R3 Marketing and Leger took another look at the situation while doing the LoyalT study.
The Leger survey1 was conducted between September 10th and 28th, 2020. The threat of COVID-19 was still present in the country. This year’s findings thus reflect these times of uncertainty experienced by consumers and businesses.
The worrying conditions and the lockdown have forced many Canadians to isolation and stress (health, finances, work). The requested changes forced on the population such as remote work, social distancing or the ban on gatherings have quickly altered many people’s everyday lives. It is not surprising that 91% of Canadian consumers say that the pandemic has changed their behaviour and consumption habits2.
Fewer visits to stores
In response to pandemic-related challenges (temporary closures, stock shortages, social distancing, waiting lines, etc.), many retailers had to modify their loyalty program and communication initiatives to adjust to changes in frequency. These adjustments have not gone unnoticed by the members of loyalty programs. Forty percent of respondents said they noticed that promotions or bonus point offers were fewer and less generous.
Globally, the LoyalT study shows that for many retailers the frequency of visits to their store decreased from 30% to 40%, while the average transaction increased. We can assume that Canadians started to stock more supplies, including food, to reduce their store visits.
This decrease creates side effects on the use of loyalty cards and reward redemptions. Compared to 2018, there was a 20% decrease in the number of members who say that they “always” show their loyalty card in stores, and an 11% decrease in the number of members redeeming. For example, 61% of the Scene program members (Cineplex) had redeemed their points in 2018. Twenty-three percent have done so in 2020.
It is important to remember, however, that many movie theatres have been closed more than once and for extended periods. While all activity sectors show the same behaviour, although less extreme than the Cineplex program, the SAQ2 and its Inspire program is the least affected: a slight 4% decrease of customers having redeemed their awards is noted.
The local purchasing trend was reflected in our survey results. During the pandemic, one in two Canadian program members said they were supporting local businesses or retailers. Thirty-nine have declared that, when the crisis is over, the best loyalty program will be the one that will offer more rewards or discounts on local products.
Despite the popularity of local purchasing, the search for savings remains important for Quebecers and Canadians.
- 64% of members will support the most generous programs
- 57% will use loyalty programs more often to save money
- 59% will support companies that offer a loyalty program
All sectors are in the same situation… or nearly in the same situation
When we look at the LoyalT score assigned to each Canadian program, we see that the pandemic will have a significant impact on this year’s performance. Almost all of the programs have seen their LoyalT score decline. These results contrast with those of previous years, when only a small difference on the positive side was noted. On average, the LoyalT score for all programs declined by 7.2 points or 13%.
LoyalT score is calculated from 3 key indicators : recommendation (6%), level of engagement (37%) and purchasing behaviour (57%).
Not surprisingly, the programs with a better performance this year are those in essential sectors: grocery, pharmacy, gas and specialty food (e.g.: SAQ). Compared to other sectors, their LoyalT score is not as negatively impacted.
When focusing on the behaviour index, fashion and beauty programs are the hardest hit, with a decrease of 14.6 points from 2018.
Behaviour indicator: this indicator is the most significant of the LoyalT score calculations (57%). It establishes the ability of a program to retain members and change their behaviour (increase their visits into stores and influence their purchases).
No big surprise
In the end, the new survey confirms that some trends continue. Saving and buying local remain the priorities for consumers. Our results also confirm what many had already observed. Canadians visit less stores and members use less loyalty programs. As the comparison of LoyauT scores and the top 10 show, only the essential companies are doing well this year.
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1 Web survey conducted by Léger from September 10 to 28, 2020 with 5,000 Canadian respondents, including 2,000 Quebecers aged 18 and over, selected from the LÉO panel.
2 The Commercial Shift: Consumer Behaviour During and After the Pandemic (Phase 3), Léger and Lg2
3 The Société des alcools du Québec (SAQ) is a government corporation whose mandate is to sell alcoholic beverages.