There’s no doubt that Australians love loyalty programs. According to the latest For Love or Money 2021 Report from The Point of Loyalty, the leading strategic customer loyalty consultancy, 88 per cent of Australians have signed up to at least one loyalty program.

During the Covid-19 pandemic, however, the percentage of people who actively used a loyalty program at least once, dipped to 43 per cent in the 12 month period of the crisis to date, down from 53 per cent in 2018.

Loyalty programs play a major role in beauty retail. Priceline’s Sister Club is one of the biggest loyalty programs in the country. The leading department store chains, which sell the bulk of prestige beauty products in Australia, offer the MYER one and David Jones Rewards programs.

Adore Beauty, the leading beauty e-tailer, launched a new loyalty program – Adore Society – in March. Sephora has its popular Beauty Pass. When Mecca opened a flagship store on Alibaba’s Tmall last August, the retailer extended its Beauty Loop loyalty program to Chinese customers.

The usage slump has silver linings, though. Over 48 per cent of customers stayed loyal to retailers and brands if they were members of their loyalty programs – even if they didn’t make rewards claims.

An additional 39 per cent revealed that they patronised brands and retailers where they were signed-up members of a loyalty program over the past year. Only 13 per cent said they made purchasing decisions regardless of loyalty programs.

The Point of Loyalty consultancy divides consumer loyalty into two sectors – Behaviour and Belief.

Behaviour loyalty hinges mainly on habit, with consumers saying they favour brands and retailers which they have always patronised and view the interactions as mainly transactional.

Belief loyalty is based on emotional connection with brands.

For the past two years, Australian consumers have been shifting to Belief loyalty, with Behaviour loyalty preferences slipping from 76 per cent in 2019 to 69 per cent in 2021.

According to the For Love or Money report, best practice loyalty programs appealed to both types of consumers through a “five benefits” model, which entices customers to sign up with social, personal, functional, experiential and financial incentives.

There is growing concern about data security, though. Just over half of those surveyed – 51 per cent – were comfortable about handing over personal data to facilitate an improved shopping experience. But close to one third – 27 per cent – considered requests for too much information to be an invasion of privacy.

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