Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv

 
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Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
Digital Maturity

Loyalty Program Index
         2022
       IN PARTNERSHIP WITH
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
Driven by macro forces, the perennial challenge of increasing customer
retention and loyalty just got bigger for consumer businesses.
Digital Double-Down                    Ease of Switching                 Amazonification                  Undifferentiated Offering

The path to purchase is no             Shoppers can switch brands        The competitive bar is           Loyalty programs offer
longer linear. Digital is the          at the point of friction easier   constantly being raised by the   undifferentiated benefits and
first point of entry.                  than ever before.                 likes of Amazon and Uber in an   more of the same, resulting
                                                                         already uneven playing field.    in customer fatigue.

85%                                    1 in 2                            60%                              50%
of all customer journeys start on      customers say they would          of customers consider            of customers think loyalty
the digital channel, opening up        switch to a new brand after one   personalized shopping            programs don't offer much
more options and easy                  bad experience.                   experience a prerequisite for    value.
comparisons.                                                             brand loyalty.

Incisiv's 2022 Loyalty Program Index
Source: Incisiv Research
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
Shoppers expect improved
experience, transparency and flexibility
from loyalty programs of consumer businesses.
COVID-19 brought about unprecedented disruption across restaurant and
retail businesses, forcing store closures, moving most of the business to
digital channels and significantly altering consumer behavior. With 85% of the
                                                                                                         Transparency
customer journeys now beginning online, digital is the entry point to more
consumer experiences than ever before. For retailers and restaurants alike,
this change in behavior has brought with it a new set of customer
expectations. This shift to digital has significantly increased customer
expectations and their loyalty is increasingly difficult to earn.
                                                                                          Experience                                   Flexibility

Experience offers personalized                     Transparency of program rules, tiers,               Flexibility of participation in the loyalty
interactions across the buying journey,            earning, redemption options benefits and            program: channels, redemption options,
balancing pervasive self-service with              how customer data is used.                          level of participation in the program, and
empathetic human assistance.                                                                           data sharing and use.
E.g. I am willing to pay more at a retailer or     E.g. Show me how many points I have, how close I    E.g. Give me the option to do what I want and/or
restaurant chain where I am offered a              am to my next points redemption opportunity,        where I want with my rewards, offer instant
differentiated experience vs. one which offers a   including complex scenarios that include third      gratification and the ability to opt in or out of
lower price.                                       parties (such as delivery services).                promotions.

Incisiv's 2022 Loyalty Program Index
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
As digital becomes the front door to
almost all customer touchpoints,
consumer businesses with legacy
loyalty programs and technology
will struggle to derive competitive
advantage and deliver customer
value.
The immediate response of restaurant chains and retailers to
the digital shift caused by the events of the past few years- a
quick cobbling together of a patchwork of systems to get the job         • Even the most basic customer loyalty use case requires data
done. However, it should not overlook the fact that loyalty                unification, digitization and channel integration. E.g. Looking up my
programs of most retailers and restaurant chains need to be                loyalty points balance while using a mobile app for in-store pickup.
reimagined to deliver value and meet evolving shopper needs.
                                                                         • Complex loyalty program use cases require extensive backend
                                                                           infrastructure. For instance, personalized rewards, promotions or
                                                                           discount offers need real-time analysis of a large volume of data (E.g.
                                                                           past purchases, browsing history, product attributes, inventory
                   23%*                            7%*                     availability).

        YoY increase in QSR AOV for
                                                                         • Loyalty programs need to evolve from points earning and redemption
                                       YoY increase in QSR spend/1,000
              loyalty members           shoppers for loyalty members       to a 360-degree customer engagement program.

Incisiv's 2022 Loyalty Program Index
*Loyalty Data Punchh Study
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
The benchmark of an excellent loyalty
program is being set by technology and
user-experience leaders across
industries.
                   Users can accrue points for using both Uber and Uber Eats. Members
                   have to opt into this tiered loyalty program, which offers instant
                   redemption options and transparency around points to accrue for the
                   next redemption.

                   62% of U.S. households are enrolled in Amazon's Prime membership
                   program and members spend $1,400 per year, ~2.5x more than non-
                   members. Most digital customers expect instant gratification and
                   Prime gives members their benefits immediately.                           What are the biggest gaps and
                                                                                             opportunities for retailers and restaurant
                   Apple does not have a program where shoppers can register and earn
                                                                                             chains to improve loyalty program
                   rewards. However, the brand automatically invites customers who
                   spend more than $5,000 a year into its tier-based program. These          capabilities and experience?
                   members receive special offers and discounts on the latest Apple
                   products. Apple drives brand loyalty largely through product              Also, which retailers and restaurant chains offer the most mature
                   innovation and purchase experience.                                       loyalty program and experience for shoppers? Incisiv's 2022
                                                                                             Loyalty Program Index explores these topics.
                   Loyalty members enjoy unlimited rewards based on their bookings via
                   the website or app. The program does not rely on the accumulation of
                   reward points. Instead, benefits are provided based on tiers, and there
                   is no usage limitation or expiration period for member benefits.

Incisiv's 2022 Loyalty Program Index
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
While some loyalty program capabilities have evolved, restaurant and retail brands
still have to do a lot more to meet shopper expectations.

                               Enrollment                                          Structure & Features                                                         Ease of Use
Customer Preferences

                                    70%                                  67%                                   75%                                72%                            33%

                          Customers prefer to manage               Customers expect                   Customers prefer instant              Customers expect         Customers expect loyalty program
                            loyalty programs via app                 surprise gifts                    discounts/redemptions               personalized rewards          specific helpdesk service
Market Offering

                                    26%                                  28%                                   16%                                48%                            11%

                        Top 150 retailers and restaurant     Retailers and restaurant chains     Retailers and restaurant chains offer    Retailers and restaurant       Retailers and restaurant
                       chains have a dedicated loyalty app    send gifts, offers or discounts   instant discount on purchases instead    chains offer some form of     chains offer loyalty program
                                                                   on special occasions                     of reward points                  personalization            specific helpdesk service

Incisiv's 2022 Loyalty Program Index
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
Loyalty Program Index
                                       Methodology & Approach

Incisiv's 2022 Loyalty Program Index
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
Incisiv's Digital                                                                  Insights from Incisiv's Digital Maturity Benchmarks have been

Maturity Benchmarks                                                                                featured in leading publications

Incisiv conducts detailed assessments of global retailers' digital
capabilities based on its proprietary benchmarking framework,
which combines shopper and executive insights with experience
audits. Crucially, Incisiv's methodology considers the impact of
specific digital capabilities on performance metrics that matter
most, such as conversion, average order value (AOV), churn and
customer satisfaction score (CSAT).

Shopper Data                            Executive Insights           Experience Audits                            Performance Impact
Insights from 60,000+                   Surveys spanning 2,500+      Detailed experience audits -                 Performance data and
shoppers across multiple                global consumer industry     from eCommerce to store                      benchmarks from 250+
consumer industry                       executives.                  visits - across 500+ global                  global retailers.
categories.                                                          retailers.

Incisiv's 2022 Loyalty Program Index
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
Incisiv's Loyalty Program Index                                                                Structure & Features
                                                                                               Program structure, benefits,
assesses top convenience chains,                                                               redemption rules, gamification
grocers and quick service                                                                      and payment options
                                                                                               38 attributes
restaurants on features and
capabilities of their loyalty                                    Enrollment                                                              Ease of Use
programs across three key areas.                                 Discovery, sign-up options,                                             Customer support,
                                                                 membership types and                                                    communication,
                                                                 information                                                             personalization and
The index is comprised of the top retailers and
                                                                 17 attributes                                                           integration with
restaurant chains (by annual revenue) across three
                                                                                                                                         order
different industry segments. Each entity's capability and
                                                                                                                                         23 attributes
experience are assessed using an observational
methodology.                                                                                     Loyalty Program
                                                                                                       Index

150                                                         78                                                      3
Banners - website and loyalty                               Program nuances and digital                             Industry segments covered
apps                                                        capabilities assessed                                   •   Convenience
                                                                                                                    •   Grocery
                                                                                                                    •   Quick Service Restaurants

Incisiv's 2022 Loyalty Program Index
Loyalty Program Index 2022 - Digital Maturity - IN PARTNERSHIP WITH - Incisiv
Each assessment area includes table stakes and differentiating experiences, defined based on their overall level of adoption, perceived value by
customers, and impact on key performance indicators (KPIs), such as average order value (AOV), conversion, customer satisfaction and traffic.

Table Stakes: Foundational capabilities required to address key shopper expectations today. The absence of these capabilities has a negative
impact on digital performance KPIs and customer loyalty.

Differentiating Experiences: Advanced capabilities that address important emerging shopper expectations. The presence of these capabilities has
a positive impact on digital performance KPIs and customer loyalty.

                                                  Illustrative examples of table stakes and differentiating experiences

Enrollment                                                   Structure & Features                                         Ease of Use
• A dedicated section for the loyalty program,               • Presence of free loyalty membership                        • Access to physical and digital loyalty
   rewards and benefits                                      • Ability to receive promotional offers and coupons            membership cards
• Loyalty program registration and account                   • Option to earn more loyalty points for online              • Ability to scan the virtual card at the register
   management                                                  purchases vs. in-store                                       and redeem points via app
• Auto-enrollment to loyalty programs for                    • Presence of premium membership programs                    • Option to redeem points for in-store
   account holders                                           • Availability of different clubs or schemes                   purchases
• Access to joining rewards or bonus on loyalty              • Access to extended benefits, such as fuel savings,         • Dedicated customer service channel or
   registration                                                exclusive access to promotions, discounts on                 resolution mechanism for loyalty members
• Dedicated app for the loyalty program                        special events and gamification rewards                    • Personalized offers tailored to the loyalty
                                                                                                                            member's preference

Incisiv's 2022 Loyalty Program Index
Loyalty Program Index: Rating categories

          Laggards offer a severely           Followers offer a basic digital         Challengers offer a seamless            Leaders offer the richest
           lacking digital maturity               maturity experience,                 digital maturity experience          digital maturity experience
          experience, missing even            addressing most table-stake             built on a solid foundation of          within and across retail
           some basic table-stakes                  capabilities. Their               capabilities. They offer some            segments. They lead in
                functionality.                experiences lack depth, and              differentiated experiences,           adoption of differentiated
                                                 are light on adoption of                 but lack the depth and                experiences, and are
                                               differentiated capabilities.                coverage of leaders.             functionally mature across
                                                                                                                               most assessment areas.

          Adoption of table stakes: Medium    Adoption of table stakes: Medium-High      Adoption of table stakes: High       Adoption of table stakes: High
           Adoption of differentiators: Low      Adoption of differentiators: Low     Adoption of differentiators: Medium    Adoption of differentiators: High

Incisiv's 2022 Loyalty Program Index
Banners rated as Loyalty Program Digital Maturity Index Leaders, in alphabetical order

                                                   Convenience                            Grocery                               Quick Service Restaurants
                                                       (16)                                 (4)                                            (18)

Incisiv recognizes these top 38
banners as leaders in the Overall
Loyalty Program Index within
and across restaurant and retail
segments.

They are the benchmark for
loyalty program capabilities and
experience in 2022, offering
differentiated capabilities
across the shopping journey.

The full leaderboard is available
at the end of this report.

Incisiv's 2022 Loyalty Program Index
01 |Enrollment
                                       Discovery and Sign-Up for
                                          Loyalty Membership

Incisiv's 2022 Loyalty Program Index
ENROLLMENT: OVERVIEW                   WHY IT MATTERS                                 WHAT WE ASSESS

Seamless program                       Since 70% of customers engage more             This section evaluates the information
                                       frequently with a brand where they are         availability, ease of accessibility with
activation and joining
                                       registered for the loyalty program, these      various sign-up options and omnichannel
incentives drive                       programs have a major impact on                enrollment in the loyalty membership
customer retention                     customer retention, satisfaction and           journey.
                                       brand advocacy.
Existing shoppers tend to spend 67%
more than new shoppers and as such
brands have to incur huge costs for    15% increase in loyalty users                  17 total attributes assessed,
new customer acquisition.
                                       witnessed by QSRs in 2021 compared to          including:
                                       previous year.*
So, how do brands attract more new
shoppers to their loyalty program?                                                    • Availability of and accessibility to the
                                                                                        loyalty program.
                                       75% of shoppers
Brands need to implement effective,
                                       are likely to switch brands for a better or    • Availability of different sign-up methods,
user-friendly enrollment strategies
                                       preferred loyalty program.                       such as program activation time, auto
that generate higher ROI. Seamless
participation, omnichannel                                                              sign-up, enrollment in store or online.
accessibility and joining incentives
are some of the top features for
                                       60% of shoppers                                • Access to joining incentives and app-
attracting shoppers, and improving     cited easy accessibility, enrollment and         specific rewards.
revenue and profitability over the     great digital experience as the most desired
long run.                              factors in their loyalty program.

Incisiv's 2022 Loyalty Program Index
*Loyalty Data Punchh Study
ENROLLMENT: OVERVIEW

C-stores lead the                                               Industry
                                                                           Convenience   Grocery   QSR
pack in omnichannel                                             Average

enrollment
capabilities, followed                 Membership enrollment
                                       on website
                                                                  71%         74%         74%      66%
by QSRs and grocers
Owing to their omnichannel             Membership joining
                                                                  26%         22%         14%      40%
presence, rich mobile app              bonus/incentive

functionality and engagement,
convenience stores recorded
maximum numbers for active             Standalone application     26%         58%          4%      16%
                                       for loyalty program
membership and participation.

QSRs managed to gather scores          Membership enrollment      37%         52%         40%      18%
through a comprehensive set of         in-store
rewards and joining incentives.
However, grocers lagged
                                       Auto-enrollment for
considerably with a long road                                     60%         72%         36%      72%
                                       membership
ahead for upscaling on
multichannel enrollment and
activation.

Incisiv's 2022 Loyalty Program Index
Banners rated as Loyalty Program Index Leaders in Enrollment, in alphabetical order

                                                           Convenience                                                       Quick Service Restaurants
                                                              (24)                                                                      (16)

Incisiv recognizes these 40
banners as leaders in Loyalty
Program Enrollment within and
across restaurant and
convenience segments. None of
the grocery retailers assessed
made it to leaders segment.

Building upon a solid foundation
of table-stake capabilities, they
lead in the adoption of
differentiated capabilities.

The full leaderboard is available
at the end of this report.

Incisiv's 2022 Loyalty Program Index
BEST CASE EXAMPLES FOR ENROLLMENT

                                                                CONVENIENCE STORES

Email communication with detailed                                                     Welcome incentives for loyalty
redemption guidelines                                                                 registration
Well orchestrated communication plan creates a feeling of inclusivity                78% of shoppers prefer to access their rewards online and use them
and makes the customer feel wanted. To personalize the loyalty                       immediately. Providing instant welcome bonuses or discounts enhances
membership experience, retailers are sending, detailed emails to                     the customer experience by creating customer delight. Currently, only
members (detailing program structure, tiers, benefits etc.) within 2                 22% of convenience stores offer welcome rewards to new users.
hours of enrollment. This is also a great way to increase program
awareness and promote participation.                                                 RaceTrac offers its users free beverages upon program registration once
                                                                                     they make their first in-store purchase.
Huck's sends its members an interesting email with details on
redemption process and pictures.

Incisiv's 2022 Loyalty Program Index
BEST CASE EXAMPLES FOR ENROLLMENT

                                                                        GROCERY

Text message enrollment                                                              Exclusive in-app features
When it comes to loyalty program enrollment, customers look for                     57% of shoppers like to engage with loyalty programs on their mobile
multichannel registration and ease of sign-up. Allowing shoppers to                 phones. Providing additional functionality and benefits in the app helps
register for the loyalty program via simple options like text message               increase app usage, as well as customer satisfaction since a majority of
increases convenience, making the entire process seamless.                          users prefer apps for placing orders. Currently, only 4% of grocery
                                                                                    retailers offer enhanced rewards or benefits on their apps.
Brookshire's rewards program allows users to register for membership
via text message by texting "CELEBRATE" to 59652.                                   99 Cents Only has weekly deals, special offers, in-store rewards and
                                                                                    exclusive product previews for users via the mobile app.

Incisiv's 2022 Loyalty Program Index
BEST CASE EXAMPLES FOR ENROLLMENT

                                                                           QSR

Dedicated app for loyalty                                                           Gathering shopper data for a
rewards                                                                             personalized brand experience
75% of shoppers would engage more with a brand that has a mobile-                  As shopper expectations evolve, brands are gathering key consumer data,
friendly loyalty information system. Reward apps are a great way to                including demographics, lifestyle and purchase intent via shoppers'
increase engagement, provide exclusive benefits, and improve customer              browsing history to offer them personalized promotions, product
retention rates. Currently, only 16% of restaurant brands have                     recommendations and appealing content. These efforts help brands
dedicated loyalty apps.                                                            increase engagement levels and customer satisfaction scores.
                                                                                   Personalization results in a 6.4x increase in satisfaction with a loyalty
El Pollo Loco rewards app "Loco rewards" allows shoppers to earn                   program.
points with every order, receive a birthday reward and special offers
throughout the year. It also enables shoppers to order ahead, pay and              Moe's prompts shoppers to provide their favorite location, along with
save favourites.                                                                   additional demographic information, when they sign up for the loyalty
                                                                                   program.
Incisiv's 2022 Loyalty Program Index
02 | Structure and Features
                                  Ease of Earning and Redeeming
                                              Rewards

Incisiv's 2022 Loyalty Program Index
STRUCTURE AND FEATURES: OVERVIEW        WHY IT MATTERS                                WHAT WE ASSESS

Reimagining the loyalty                 With 37% of shoppers willing to pay to        This section assesses the various
                                        join or upgrade to a higher tier of their
program strategy and                                                                  membership tiers, capabilities, and the
                                        loyalty membership, premium loyalty           experience of using the rewards and
experience                              programs connect well with shoppers.          benefits for an enhanced shopping
                                                                                      experience.
The shift from traditional loyalty
programs has led to increased focus     67% of shoppers
on customer needs and expectations      are motivated to join the loyalty program
yielding lucrative benefits for them.   that offers instant discounts or rewards on   37 total attributes assessed,
                                        purchases                                     including:
It has become critical for brands to
stay ahead of the game with new                                                       • Ability to redeem rewards across stores
trends and valuable strategies. A       36% of shoppers                                 and online platforms.
well-structured program with            shop more frequently with brands where
esteemed privileges and value-          they can earn fuel rewards                    • Access to information on redemption,
added benefits yields a profitable                                                      such as expiry of points, minimum
and rewarding experience for                                                            balance and incremental redemption.
shoppers. Gamification rewards,
                                        46% of loyalty shoppers
free giveaways, fuel savings, instant                                                 • flexibility of using the brand's closed-
                                        look out for premier or exclusive access to
discounts and free shipping are the                                                     loop wallet.
                                        sales and promotions
key factors that encourage shoppers
to invest in loyalty programs.                                                        • Access to other paid program benefits,
                                                                                        such as delivery subscriptions.

Incisiv's 2022 Loyalty Program Index
*Loyalty Data Punchh Study
STRUCTURE & FEATURES: OVERVIEW

Quick service                                                            Industry
                                                                                    Convenience   Grocery    SR
                                                                                                            Q
                                                                         Average
restaurants outpace
convenience stores                     Tiered membership
                                                                           43%
                                                                           11%         48%
                                                                                       16%         30%
                                                                                                   4%       50%
                                                                                                            12%
and grocery retailers                  program

with their program
structure, usage and
                                       Multiple loyalty schemes/clubs
                                                                           38%
                                                                           17%         50%
                                                                                       20%         8%
                                                                                                   22%      56%
                                                                                                            8%
                                       (beverage club, fuel club etc.)
characteristics
                                       Paid program for delivery
Driven by the ease of earning and      or other services
                                                                            8%
                                                                           34%          6%
                                                                                       18%         12%
                                                                                                   64%       6%
                                                                                                            20%
redeeming rewards, quick-service
restaurants displayed high digital
engagement. 52% of QSRs offer          Gamification rewards for
                                       loyalty members
                                                                           12%
                                                                           17%         4%
                                                                                       16%          4%
                                                                                                    6%      28%
                                                                                                            30%
rewards for special events, 4x
higher than grocery and 5x higher
than C-stores.
                                       Exclusive or premier
                                                                           35%
                                                                           15%         26%
                                                                                       10%         32%
                                                                                                   12%      46%
                                                                                                            24%
                                       access to sales/promotions
Grocers exhibited high adoption
numbers in terms of providing
various loyalty clubs and paid         Rewards on birthdays or
                                                                           18%
                                                                           28%         22%
                                                                                       14%         20%
                                                                                                   18%      12%
                                                                                                            52%
memberships.                           special events

Incisiv's 2022 Loyalty Program Index
Banners rated as Loyalty Program Index Leaders in Program Structure and Features, in alphabetical order

                                                   Convenience                            Grocery                           Quick Service Restaurants
                                                       (12)                                 (9)                                        (19)

Incisiv recognizes these top
banners as segment-wise
leaders in Loyalty Program
Structure and Features within
and across restaurant and retail
segments.

Building upon a solid foundation
of table-stake capabilities, they
lead in the adoption of
differentiated capabilities.

The full leaderboard is available
at the end of this report.

Incisiv's 2022 Loyalty Program Index
BEST CASE EXAMPLES FOR STRUCTURE AND FEATURES
                                                                CONVENIENCE STORES

Instant discounts on purchases                                                       Exclusive in-store
instead of reward points                                                             services
As shopper preferences evolve, they are no longer satisfied with                    In addition to in-store redemption options, retailers are improving the
traditional points earning and redemption. Discounts and coupons                    loyalty member experience by providing special in-store benefits, such as
instead of reward points are one of the key drivers for loyalty programs            priority checkout and curbside pick-up services. Adding these benefits is a
with 61% of shoppers using these coupons. To adapt to these changing                great way to retain existing customers and improve their lifetime value.
needs, retailers are enticing shoppers with cash benefits, exclusive                Currently, only 6% of convenience store retailers offer in-store benefits to
promotions and freebies. Currently, only 36% of convenience store                   loyalty members.
retailers offer non-conventional loyalty perks on purchases.
                                                                                    Cumberland Farms offers loyalty members convenient order fulfillment
Casey's allows loyalty members to convert points accrued to cash or fuel            options along with faster checkout.
discounts.

Incisiv's 2022 Loyalty Program Index
BEST CASE EXAMPLES FOR STRUCTURE AND FEATURES
                                                                            GROCERY

Special member-only                                                                   Fuel savings through reward points
benefits                                                                              and discounts
Most shoppers who join loyalty programs want to feel valued, yet only                73% of shoppers say that the best savings come from in-store purchases
41% believe that they are a part of an exclusive group. Special access to            that offer fuel discounts. In addition to discounts on products, allowing
promotions and perks by loyalty members helps with customer                          customers to redeem points or fuel discounts is a great way to increase
retention and improves the frequency of repeat purchases. Currently,                 retention rates. Only 38% of grocery retailers currently allow for fuel
only 12% of grocery retailers offer access to member-only deals or                   perks or redemptions.
promotions.
                                                                                     Kroger has a fuel rewards program where customers get fuel points when
Harris Teeter offers exclusive weekly deals on items exclusively to its              they purchase groceries at Kroger.
loyalty club members.

Incisiv's 2022 Loyalty Program Index
BEST CASE EXAMPLES FOR STRUCTURE AND FEATURES
                                                                           QSR

Gamification to earn bonus                                                          Premium points for referrals and
rewards                                                                             purchases during special events
53% of shoppers feel that the presence of games makes the program                  66% of shoppers would join a loyalty program if it builds an ongoing
experience enjoyable and 81% of loyalty members take advantage of                  relationship with their favorite brand. Offering bonus points to loyalty
these challenges to earn bonus points or rewards. Gamification increases           members during special events like tournaments helps build an emotional
engagement rates, improves product awareness and helps generate                    connection with the brand, setting it apart from its competition by
more sales. Currently, only 17% of restaurant brands offer this                    creating a superior customer experience. Currently, only 12% of restaurant
functionality on their website.                                                    brands offer this feature.

Starbucks has games and challenges exclusively for its loyalty members             Moe's Southwest Grill offers its loyalty members bonus points during
to earn more stars.                                                                special tournaments for referring friends and even when the referrals
                                                                                   make their first purchase.

Incisiv's 2022 Loyalty Program Index
03 | Ease of Use
                                       Omnichannel Integration and
                                             Personalization

Incisiv's 2022 Loyalty Program Index
EASE OF USE: OVERVIEW                  WHY IT MATTERS                                WHAT WE ASSESS

Omnichannel integration                With 91% of consumers are more inclined       This section assesses ease of usage with
                                       to spend with brands offer some form of
and personalization to                                                               multichannel integration, rewards tracking,
                                       personalization (offers and                   digital membership, special resolution
drive the future of loyalty            recommendations). Understanding               mechanism and personalized
program                                consumer behavior and digital                 communications or offer updates.
                                       integration are critical KPIs for an
Due to ever-evolving customer          effective loyalty program.
expectations of digital integration
and receiving personalized
                                       72% of shoppers                               23 total attributes assessed,
communications, rendering more
responsive and data-driven
                                       prefer a brand that offers a personalized     including:
                                       experience with additional rewards and
experiences has become imperative
                                       benefits.                                     • Availability of self-help tools, including
for retailers. Broadening loyalty
                                                                                       access to customer service and FAQs.
touchpoints through personalized
communications, frictionless
                                       Over 70% of shoppers                          • Availability of a personalized shopping
payment and digital engagements
                                       are more likely to participate in a loyalty     experience, including offers and
tend to build higher satisfaction
                                       program that provides access to loyalty         coupons.
levels, thereby fostering
                                       cards and rewards via its mobile app.
relationships at every step of the
                                                                                     • Effectiveness of utilizing the dual modes
loyalty program.
                                                                                       of membership via physical and virtual
2.5%* increase in check size           75% of shoppers                                 cards.
of loyalty members over anonymous      are more likely to shop with the brand
shoppers', for QSRs in 2021.*          whose app allows quick transactions.

Incisiv's 2022 Loyalty Program Index
*Loyalty Data Punchh Study
EASE OF USE: OVERVIEW

While convenience                                                     Industry
                                                                                 Convenience   Grocery   QSR
                                                                      Average
stores overshadowed
grocers and QSRs in                    Scan virtual loyalty card at
                                                                        43%         48%         30%      50%
offering customer                      register

service, quick-
                                       Redeem rewards via dedicated
service restaurants                    app
                                                                        38%         50%          8%      56%

offer better digital
integration and                        Redeem rewards online for
                                                                        8%           6%         12%      6%
personalization                        charity

QSRs displayed high digital            Execute curbside or takeaway
                                                                        12%          4%          4%      28%
usability, ease of fulfillment and     via loyalty app
personalized communications.

                                       Personalized communication
Yet C-store and grocery retailers                                       35%         26%         32%      46%
                                       around membership
managed to score higher adoption
numbers for physical loyalty
membership and dedicated               Dedicated support line for
                                                                        18%         22%         20%      12%
resolution mechanism.                  loyalty program

Incisiv's 2022 Loyalty Program Index
Banners rated as Loyalty Program Index Leaders in Ease of Use, in alphabetical order

                                                    Convenience                            Grocery                            Quick Service Restaurants
                                                        (12)                                 (6)                                         (18)

Incisiv recognizes these top
banners as segment-wise
leaders in Loyalty Program Ease
of Use within and across
restaurant and retail segments.

Building upon a solid foundation
of table-stake capabilities, they
lead in the adoption of
differentiated capabilities.

The full leaderboard is available
at the end of this report.

Incisiv's 2022 Loyalty Program Index
BEST IN CLASS EXAMPLES FOR EASE OF USE
                                                               CONVENIENCE STORES

Redeem rewards for                                                                   Execute order transactions via
charity                                                                              loyalty app
Allowing shoppers to use their loyalty points to make donations creates              Mobile apps for loyalty programs have a robust rewards system and easy-
a sense of responsibility and makes them feel connected by building a                to-use features. The addition of payment and order fulfillment
relationship with the brand. Brands perceived as meaningful and                      capabilities via the loyalty app increases user convenience and improves
supportive towards a cause have earned a 9x increase in wallet share.                app adoption rates. Currently, only 2% of C-store retailers offer this
Currently, only 6% of C-store retailers allow points redemption for                  functionality.
charity.
                                                                                     Cumberland farms allow its shoppers to complete purchase transactions
Casey's enables its shoppers to redeem rewards for charity by donating               for curbside pickup via its dedicated loyalty app "SmartPay rewards."
their points to a local school.

Incisiv's 2022 Loyalty Program Index
BEST IN CLASS EXAMPLES FOR EASE OF USE
                                                                            GROCERY

Dedicated support line for members                                                   One-click rewards redemption via app
46% of shoppers have increased their business with a retailer that offers            34% of shoppers cite a confusing redemption process as one of the main
exceptional customer service. Dedicated channels exclusively for                     pain points when using loyalty programs. An easy-to-use, efficient and
members are a great way to improve the experience by making loyalty                  quick way of redeeming rewards helps retain customers, improves app
program members feel valued. Currently, only 12% of grocery retailers                usage and reduces bounce rates. Currently, only 8% of grocery retailers
offer dedicated customer support for loyalty members.                                allow shoppers to redeem rewards via a dedicated mobile app.

Hy-Vee has a designated customer support line, "The Red Line," for                   Albertsons allows shoppers to redeem fuel rewards and pay in one click via
Hy-Vee Plus members' service and resolution.                                         the "One Touch Fuel" mobile app.

Incisiv's 2022 Loyalty Program Index
BEST IN CLASS EXAMPLES FOR EASE OF USE
                                                                            QSR

Personalized offers and                                                              Easy payment via bar code scanner at
promotions                                                                           register
77% of shoppers say that loyalty programs should offer personalized                  43% of shoppers say that physical cards are the biggest obstacles to
rewards. With data-driven experiences gaining prevalence, retailers are              claiming rewards. Shoppers often require physical loyalty card numbers
increasing the use of loyalty data to provide personalized services like             for online registration. Providing a digital rewards card increases
offers, product recommendations and in-store discounts.                              convenience, thereby improving customer satisfaction. Currently, 50% of
Personalization builds brand loyalty. Currently, only 46% of restaurant              restaurant brands offer virtual loyalty cards through online registration
brands offer this functionality.                                                     on their websites.

McAlister's Deli offers exclusive promotions and personalized offers to              Steak N Shake has a virtual loyalty card with a QR code scanner allowing
its loyalty program members.                                                         shoppers to scan receipt barcodes as well.

Incisiv's 2022 Loyalty Program Index
Leaderboard

Incisiv's 2022 Loyalty Program Index
The Complete 2022 Loyalty Program Index Leaderboard
                                                                                                                              Leaders
                                        CONVENIENCE                 GROCERY                  QUICK SERVICE RESTAURANTS
                                         Alltown                    Albertsons               Arby's
  As part of its 2022 Loyalty Program   Alta Convenience            Aldi                     Baskin-Robbins
                                        ampm                        Big Lots                 Bojangles
  Index, Incisiv assessed 150 brands    Applegreen                  BJ's Wholesale Club      Burger King
                                        Bolla Market                Brookshire's             Carl's Jr.
  across 3 industry segments. The       Casey's General Stores      Costco                   Checkers and Rally's
                                        CEFCO                       Cub Foods                Chick-fil-A
  complete list of assessed brands is   Chevron ExtraMile
                                        Circle K
                                                                    Dollar General
                                                                    Family Dollar
                                                                                             Chipotle
                                                                                             Church's Chicken
  provided here.                        Convenient Food Mart
                                        Cumberland Farms
                                                                    Family Fresh Market
                                                                    Fareway Stores
                                                                                             Culver's
                                                                                             Dairy Queen
                                        Duchess                     Festival Foods           Del Taco
                                        Fas Mart                    Food City                Domino's
                                        GetGo                       Food Lion                Dunkin'
  Each retailer assessed was given an   GoMart                      Giant Eagle              El Pollo Loco
                                        Huck's                      Grocery Outlet           Firehouse Subs
  overall rating, as well as a          Hy-Vee Gas                  Hannaford                Five Guys
                                        Jacksons Food Stores        Harris Teeter            Freddy's Frozen Custard
  functional-area rating across         Joe's Kwik Mart
                                        Kum & Go
                                                                    H-E-B
                                                                    Hy-Vee
                                                                                             & Steakburgers
                                                                                             Hardee's
  enrollment, structure and features,   Kwik Trip
                                        Little General Stores
                                                                    Ingles Markets
                                                                    Jewel-Osco
                                                                                             In-N-Out Burger
                                                                                             Jack in the Box
                                        Loop Neighborhood           Kroger                   Jersey Mike's
  and ease of use. Incisiv's analysis   Love's Travel Stops &       Lidl                     Jimmy John's
                                        Country Stores              Lowes Foods              KFC
  found:                                MAPCO Express               Market Basket            Krispy Kreme
                                        Maverik                     Martin's                 Little Caesars
                                        Mirabito                    Meijer                   Marco's Pizza
                                        Murphy USA                  Piggly Wiggly Midwest    McAlister's Deli
  •   38 Leaders                        Nouria convenience stores
                                        Par Hawaii
                                                                    99 cents only stores
                                                                    Price Rite
                                                                                             McDonald's
                                                                                             Moe's Southwest Grill
  •   42 Challengers                    Par Mar Stores
                                        Pilot Flying J
                                                                    Pricechopper
                                                                    Publix
                                                                                             Panda Express
                                                                                             Panera Bread
                                        Plaid Pantry                Raley's Supermarkets     Papa John's
  •   33 Followers                      QuickChek                   Save A Lot               Papa Murphy's
                                        QuikTrip                    Save Mart                Pizza Hut
  •   37 Laggards                       RaceTrac                    Schnuks                  Popeyes
                                        Raceway                     Smart & Final            Qdoba Mexican Grill
                                        Rebel Stores                Sprouts Farmer Markets   Raising Cane's Chicken Fingers
                                        Rocket Stores               Stater Bros.             Sonic Drive-In
  Get in touch to request detailed      Royal Farms
                                        Rutter's
                                                                    Target
                                                                    Tops Friendly Markets
                                                                                             Starbucks
                                                                                             Steak 'n Shake
  information about your rating, or     7-Eleven
                                        Sheetz
                                                                    Trader Joe's
                                                                    Walmart
                                                                                             Subway
                                                                                             Taco Bell
                                        Stewart's Shops             Wegmans                  Tim Hortons
  to request a custom benchmark.        Sunoco                      Weis Markets             Tropical Smoothie Cafe
                                        Terrible Herbst             Wesley Kosher            Wendy's
                                        Throntons                   Whole Foods Market       Whataburger
                                        Timewise                    Winco                    White Castle
                                        Travel Centres of America   Winn Dixie               Wingstop
                                        Wawa                                                 Zaxby's

Incisiv's 2022 Loyalty Program Index
IN PARTNERSHIP WITH

ABOUT INCISIV                                                 ABOUT PUNCHH

Incisiv is a peer-to-peer executive network and industry      For more than 40 years, PAR’s (NYSE: PAR) cutting-edge products and services have helped
insights firm for consumer industry executives navigating     bold and passionate restaurant brands build lasting guest relationships. We are the partner
digital disruption.                                           enterprise restaurants rely on when they need to serve amazing moments from open to close,
                                                              during the most hectic rush hours, and when the world forces them to adapt and overcome.

Incisiv offers curated executive learning, digital maturity   More than 100,000 restaurants in more than 110 countries use PAR’s restaurant hardware,
benchmarks and prescriptive transformation insights to        software, drive-thru, and back-office solutions.
clients across the consumer and technology industry
spectrum.                                                     With the acquisition of Punchh Inc., a leading SaaS-based customer loyalty and engagement
                                                              solutions provider, PAR has become a Unified Commerce provider for enterprise retailers.
incisiv.com                                                   More than 260 global enterprise brands, including Yum! Brands (NYSE: YUM), Denny’s
                                                              (NASDAQ: DENN), TGI Fridays, and Casey’s (NASDAQ: CASY) rely on Punchh to grow revenue
                                                              by building customer relationships. To learn more about the Punchh Loyalty, Offers and
                                                              Engagement Platform, visit: www.punchh.com
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