What's Happening?
A recent report by Upside highlights a significant challenge faced by fuel and convenience-store loyalty programs: low engagement among members. Despite 86% of shoppers acknowledging the importance of loyalty, only 49% of fuel and convenience-store loyalty program members are
regular users. This figure is higher than the 38% regular users in restaurant loyalty programs but lower than the 59% in grocery stores. The report, based on survey responses from over 12,000 consumers and retailers, suggests that the abundance of loyalty programs contributes to consumer overwhelm. On average, a fuel and convenience-store loyalty member is enrolled in 2.3 other programs, marking a 26% increase from 2023. Upside's analysis indicates that while these programs influence where consumers choose to fill up on fuel, they are less effective at increasing overall spending.
Why It's Important?
The findings from Upside's report underscore a critical issue for fuel and convenience-store operators: the need to enhance the effectiveness of their loyalty programs. With a loyalty influence score of 42.8 out of 100, these programs primarily drive visit frequency and word-of-mouth referrals but fall short in boosting total spending. This situation presents a challenge for retailers aiming to maximize customer retention and spending. The report suggests that operators should focus on differentiating their loyalty programs to move beyond what is termed the 'loyalty plateau.' By offering advanced personalization, new digital engagement channels, and expanded member experiences, retailers can better cater to the 56% of preference-first customers who exhibit high brand affinity and price sensitivity.
What's Next?
To address the engagement challenges, fuel and convenience-store operators are encouraged to innovate their loyalty offerings. Upside recommends strategies such as advanced personalization, which involves tailoring content and offers to individual preferences, and introducing new digital engagement channels like online pickup and delivery. Additionally, expanding member experiences with premium perks could attract and retain more loyal customers. By tapping into existing marketplaces frequented by consumers, operators can further differentiate their programs and enhance their appeal. These steps are crucial for retailers seeking to strengthen their competitive edge and foster deeper customer loyalty.
