Most recently, Ken Murphy, CEO of the British international supermarket chain Tesco he said on the conference that Tesco “can use Clubcard data to nudge customers towards healthier choices”.
How wouldn’t it work and is that this what we wish? Our latest study, published within the journal Scientific journal of research and reviewgives the reply.
Loyalty programs have been around for the reason that Eighties, with the introduction of loyalty programs frequent flyer programs.
The advancements in loyalty programs are enormous, with some even using game-based approaches equivalent to leaderboards, trophies, and treasure hunts to keep people engaged. The principle of loyalty is predicated on a type of social exchange, viz reciprocity.
An ongoing relationship implies that we recurrently use the nice or service because trust the service providerwe’re satisfied with the serviceand us consider the rewards we receive reasonable – whether discounts, vouchers or gifts.
In return, we accept the incontrovertible fact that in lots of cases loyalty programs collect data about us. Our purchasing history, often tied to our demographics, generates improvements in service delivery.
If we accept it, then yes proceed to benefit from rewards programsequivalent to promotional offers or other discounts. Effectiveness lies not only in presenting us with attractive offers for things we’re serious about purchasing, but additionally for other discounted items that we now have not considered purchasing.
Does it work?
So is that this the long run? The first issue is whether or not we’re satisfied with the gathering of information about us. There is a trade-off between the extent of personalization desired and the quantity of information we’re willing to share. Research has shown that the more personalized the programs are, the higher the more concerned we’re about crossing the boundaries of privacy. For example, lots of us dislike personalized communication about services via chatbots.
A second, related issue is that loyalty program data is and can proceed to be available huge value for external organizations. For example, market research can use loyalty program data to more closely track consumer trends. Scientists can use data Down draw conclusions about health behaviors.
While data from loyalty programs is invaluable for research purposes, not all shoppers are comfortable with their data being shared in this fashion. In a 2023 survey of 1,539 people conducted by Yasemin Hirst of Lancaster University and colleagues, 39% said that they didn’t want to share their personal data to academic institutions, and 56.9% didn’t want to share their personal data with private organizations.
What data people were willing to share also varied: for instance, people were more willing to share loyalty card data for research purposes (51.8%) than social media data (30.4%). Generally speaking, persons are concerned about privacy and misuse of their data.
All this points to data privacy and permission needed to share personal information with third-party advertisers and data brokers for web shoppers.
Steve Travel/Shutterstock Guide
The final aspect is what the info reveals. Data from loyalty programs doesn’t give the complete picture buyer. We mix and match where we buy food due to our budget and geographical location. Some retailers have a greater reach and delivery in rural areas than others, which further influences our behavior.
This also implies that our degree of loyalty ensures only partial image what we find yourself buying, and how healthy our habits are.
New research
In our latest study, Sarah Jenkins and I conducted a study to have a look at issues related to what Murphy had in mind. We asked 389 people to rate how their grocery shopping behavior could possibly be influenced.
We checked out three categories. One included financial incentives and discount offers. The second method was classic “nudge” methods, equivalent to marking healthy or ecological options, campaigns or educational programs.
Finally, we checked out technology incentives that may be implemented using smartphones or laptops when shopping online. For example, there could also be suggestions for food selections or an automatic system that can only select healthy food selections. Alternatively, the system could rate your shopping selections based on how healthy they were.
Respondents rated all of those options on whether or not they could help promote healthy and green selections. Overall, participants preferred financial methods typically, especially discounts on healthy foods (44.7%). They also considered taxes on unhealthy food to be effective.
The least preferred were sustainability campaigns (6.3%) and automatic sustainability selections (6.5%), equivalent to online shopping algorithms that only offer us sustainable options. One possible reason could also be a lack of expertise of what sustainable development actually means.
Behavioral and financial methods were considered barely more ethical than technological methods, although most individuals found all options to be somewhat ethical.
That said, techniques to nudge human behavior in the precise direction don’t at all times work. People like or dislike them, depending on quite a lot of aspects, including whether it seems effective, whether it is moral, and whether or not they even have desire to change your behavior.
Future options
Market researchers in various ways study our shopping trendsthe identical pattern emerges: in about 25% of cases we do our grocery shopping online. The exact percentage varies depending on the country and the foods we buy, but the overall prediction is that this will increase to roughly 45% in the following 5-10 years.
This will mean further innovation in loyalty programs geared toward each acquiring latest customers and retaining the prevailing base. Retailers must subsequently pay attention to the shortcomings of this approach, including the incontrovertible fact that it doesn’t work on people who find themselves unwilling to change their behavior, that it only provides limited information and that there may come a degree when services grow to be personalized, that many individuals don’t need to share their data.
Some of us will proceed to enjoy the advantages of those programs so long as we now have the possibility to make a selection. Indeed, some people want suggestions to make it easier to select healthy or sustainable options, but others don’t. It’s necessary to have a selection.