Much like in the United States, rewards and loyalty programmes are popular in South Africa, with numerous retail and business giants structuring schemes that benefit loyal consumers as they understand the value of building a relationship with their customers.
With Christmas only days away, many consumers around the world have been shopping up a storm in order to find the perfect gifts for their loved ones, and many of these individuals will be using rewards cards in order to maximise the benefit they receive from shopping at certain stores or online.
There are many well-structured loyalty programmes currently running in South Africa, with millions of consumers enjoying benefits, earning points and taking up offers that these plans afford them.
We look at 12 facts about these rewards schemes to find out more about the numbers behind the most well established and popular programmes and how they operate in South Africa.
This is an updated version of an article that was published Sept. 11, 2015.
According to the South African Loyalty and Rewards Survey, there are over 100 loyalty programmes currently running in South Africa, with millions of consumers enjoying benefits and taking up offers that these plans afford them.
The survey distinguishes between rewards programmes and clubs as two types of loyalty schemes that are different in the way in which consumers benefit, as rewards programmes are structured marketing interventions that rewards and replicate typical behaviours in customers, while clubs offer a range of benefits to registered members, often requiring payment for membership.
South African consumers have an average of 10 loyalty programmes that they are signed up to per household. This number may seem high, and it is for a market that is growing such as the South African examples, but by comparison it is interesting to note that American families are signed up to an average of 18 such schemes.
The data collected in the survey reveals that out of the nine programmes on average that South Africans subscribe to, only half of these are actually actively used, leaving the other half dormant. Users often gave reasons such as the fact that they did not want to bring too many cards with them when they go to shops, or they simply forgot bring them with.
The giant supermarket chain can be found throughout South Africa’s nine provinces, and owns the country’s most well-used rewards programme, the Pick n Pay Smart Shopper card, which has over 9 million members. The card earns consumers points for purchases, which can be turned into spending vouchers to use in store or donate to charity.
Over 12 million people are registered as members of the Thank U loyalty programme, making it the biggest loyalty or rewards programme in the country. The Thank U programme belongs to Edcon, which owns stationery business CNA, fragrance chain Red Square, clothing stores Jet, Legit, Edgars and Edgars Active, home goods brand Boardmans and a number of other brands.
In May 1981 American Airlines launched the world’s first loyalty programme with the AAdvantage scheme, prompting companies all over the world to look into the possibility of replicating the strategy, and a few years later South Africa began their loyalty programme journey.
Loyalty schemes became especially popular in the tourism industry, and in 1986 South Africa’s first loyalty programme was born as Protea Hotels created the PROKARD, which remains to this day. The PROKARD allowed users to benefit from frequent visits to their hotels, by receiving perks and discounts on future visits.
According to the surveys and recent research that has been concluded with regards to the loyalty market industry in South Africa, the market is considered mature versus many other countries throughout the world, showing especially strong growth over the last five to 10 years, with certain market verticals still in the growth phase, while most of the market is defined as mature.
There are numerous reasons for retailers and other businesses to begin and maintain successful loyalty schemes. The most quoted reason was to get customers to use products more, while another reason that was often used involved the need to treat customers in a special way, while gathering user data was also high on the list of priorities.
Restaurants and take-away establishments with loyalty programmes have the youngest member base with an average age of 30, while the retail sector maintains an average age of 38. The average age for members of loyalty programmes in the travel and hospitality market was 42.
The growth of the loyalty industry in the past five years has been phenomenal, but according to the researchers who looked into the trend to predict future activity, this is not expected to slow down or stop within the foreseeable future, as technology and competition in various markets demand that businesses keep up with trends.
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