Loyalty programmes are gradually falling out of favour in SA

18 March 2020 Consultancy.co.za 2 min. read
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The popularity of loyalty programmes across South African retailers is on the decline, according to the latest research by customer research consultancy Truth in collaboration with BrandMapp. Clicks clubcard has emerged as the top loyalty programme in this dwindling market.

Of economically active South Africans, 72% are currently engaged in loyalty programmes in some shape or form. Not only is this a marginal dip from last year, but it also represents a protracted decline since 2017, when this figure was higher by seven percentage points. Truth ascribes this, in part, to the overall economic outlook.

GDP growth in South Africa has almost slowed to a halt. Combined with high unemployment rates, this scenario bodes poorly for the consumer market in South Africa, as spending is tighter than ever. Making long-term financial commitments to loyalty programmes is a likely victim of this scenario.

Loyalty programme usage over the last 5 years

Within this scenario, however, Truth found that some loyalty programmes have remained strong in their performance. eBucks, a multi-partner rewards programme that offers discounts on everything from online purchases to pharma products, has emerged as the leader of loyalty programmes in the country.

Other popular programmes include Pick n Pay Smart Shopper, Dis-Chem Benefit, Woolworths Rewards and FNB eBucks. Loyalty programmes in the retail sector, as a result, remain dominant in South Africa, followed by those in the financial services, restaurant and travel sectors.

Truth also found a number of other interesting trends in the loyalty landscape this year. “We continue to deep-dive into which benefits consumers enjoy in loyalty programmes and unsurprisingly, this continues to be dominated by cashback or monetary rewards,” said the firm in its report.

“We expected to see a shift in consumer preferences towards using an App for loyalty programme identification but, still, 73% of South Africans prefer to use a loyalty card. We also reveal consumer concerns and expectations from loyalty brands on how their personal data is used by the programme operator,” it added.