Nearly two-thirds of Canadians say they are willing to “sacrifice some of their privacy” to join a loyalty program in exchange for discounts of up to 15% on their grocery, restaurant or ready meal bills, a study reveals of Dalhousie University.
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In reality, however, consumers are agreeing to give up their data for much less lavish discounts. Cards and applications for collecting points in supermarkets – and not in other types of shops – allow customers to benefit from an average of about 5% discount, according to Hans Laroche, Partner at R3 Marketing.
“Canadians expect a lot more than they actually get,” admits Sylvain Charlebois, director of the Laboratory of Analytical Sciences in Agrifood at Dalhousie University, whose report will be published on Wednesday.
Almost 90% of consumers in the country participate in at least one rewards program. “The approval is almost implicit,” he adds. According to the LoyauT 2021 study conducted by R3 Marketing and Léger, almost 13.5 programs occupy Canadians’ wallets or smartphones, compared to 8.9 in 2017. In everyday life, they use 7.1, compared to 5.9 four years ago.
This type of saving is becoming increasingly popular in an inflationary environment. Therefore, if retailers want to survive, they cannot help but set up a rewards program, say the experts surveyed.
What the Dalhousie University report says
The researchers found that when cards and apps that offer loyalty programs offer “deep discounts” on grocery purchases, domestic consumers are willing to reveal personal information. Nearly 65% of respondents are open to the idea of giving up personal information in exchange for a discount of up to 15% on groceries, restaurants or the purchase of ready meals. In comparison, 43% of respondents would do so for a 10% discount. “Essentially, Canadians are negotiable beyond food companies’ legal obligations, but they need to see the value,” the report said.
A win-win agreement
According to Hans Laroche, members of the various programs are aware that they reap benefits in exchange for their data. That’s why they play along: “People are increasingly understanding that identification with a customer card or a mobile application is an exchange process,” he says. Yes, I will give you my details, but I will get back to you with offers and relevant content. »
“If you’re a Best Buy loyalty program customer and 90% of the products you buy are photographic gear, you’re not going to be interested in an email saying the dishwashers are on sale,” he says. Value comes from two things: discounts and content. Don’t send me offers for newborn diapers when I’m in my 60s and don’t have any kids at home,” he also gives as an example.
A necessity for retailers
While loyalty program memberships are becoming more popular among consumers looking to save, they are also becoming a necessity for retailers. “It has become a commitment,” says Jean-Maximilien Voisine, founding president of Milesopedia, an information and reference site on the various loyalty programs.
“It’s a way of being close to the customer, not necessarily knowing their whole private life, but being able to adapt to inventory management, for example. It would be a bit old school not to go in that direction. »
“You can’t be a retailer and not know your customers,” adds Hans Laroche. It’s over. There aren’t many companies that can survive without knowing their customers. More and more programs are using data not only to sell, but also to create engagement and increase the frequency of interaction with the brand. »
“It was written in the sky that Air Miles’ IGA would land, he recalls. People didn’t see the value of airline miles anymore. It took months and years for you to accumulate. And the dealer had no access to the data. »
Earlier this month, IGA customers learned that they would no longer earn points on their Air Miles card when shopping for groceries. Empire, IGA’s parent company, has acquired Stage+ with Scotiabank, signaling the end of a 20-year relationship with Air Miles.
The best strategy for the consumer
What’s the best strategy for customers looking to reduce their grocery bill? “My advice is don’t keep your points like RRSPs. They need to be used frequently, Mr Voisine believes. Don’t keep your points for 10 years. It’s no use. It’s like keeping money in your checking account and not growing it. »
“The best strategy for consumers is to see where they shop most and join those retailers’ programs,” suggests Hans Laroche.
Is there a danger?
In 2019, Tim Horton’s mobile app update brought a new feature to track users’ movements without them knowing. In particular, this allowed the chain of donut and coffee restaurants to know the different places frequented by customers. After an investigation, federal and provincial privacy commissioners concluded that there had been a “massive invasion” of privacy. While there is reason for caution, Hans Laroche insists that a “reputable retailer” does not misuse personal information. “Few big brands will afford to do unethical things with data,” he says. However, he acknowledges that the danger for any manager who has a loyalty program is that their data is stolen. »
Some bonus programs
- Metro & I (Metro)
- PC Optimum (Provigo, Maxi, Pharmaprix)
- Air miles (Jean Coutu, IGA [encore pour quelques mois])
- Stage+ (IGA from 2023)
- Inspire (SAQ)
- Petro Points (Petro-Canada)
- According to the LoyauT 2021 study conducted by R3 Marketing and Léger, nearly 13.5 programs occupy Canadians’ wallets or smartphones.
SOURCE: R3 Marketing and Leger