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95% of Retailers Said This Brand Influenced Their Discussion to Launch a Premium Loyalty Program in 2021 (Hint: It’s Not Amazon)

In our recent Loyalty Industry Data Study, we talked to 300 retail marketers and found that 95% of them said one mega-retailer influenced their decision to consider a premium loyalty program by the end of 2021.

This retailer has hundreds of millions of customers globally and offers things like free shipping, instant discounts, grocery delivery, and various other features that focus on value and convenience.

This might sound a lot like Amazon.

And since 2005, Prime has always been the elephant in the room when it comes to premium loyalty.

But it’s not. It’s Walmart.

As the world’s largest retailer, Walmart launched its Walmart+ premium loyalty program in September of 2020.

Within two weeks of launch, Walmart+ had secured membership from 11% of U.S. consumers.

Boasting more than 150 million global members, Prime is, arguably, the best loyalty program of all time.

But when Walmart launched Walmart+ last year, that cemented this trend and shined a light on premium loyalty.

Premium loyalty isn’t just for the biggest retailers. Lots of brands are now onboard such as: CVS, GameStop, Wayfair, Barnes & Noble, Restoration Hardware, Lululemon, FULLBEAUTY Brands, and most recently Urban Outfitters.

Here’s why Walmart is making most retailers think about launching a premium loyalty program in 2021.

Premium Loyalty Members Are More Valuable

The 80/20 Rule says that 80% of a brand’s sales come from 20% of its customers.

This 20% figure represents your best and most valuable customers, and they are the ones a premium loyalty program targets. Give the best of your brand to your best customers and see the results.

A premium loyalty program identifies your best customers and makes them exponentially more valuable. They are willing to pay an annual membership fee for expanded and immediate benefits.

A brand’s best customers behave that way because they have an emotional attachment to the company.

Just how valuable are premium loyalty members?

Consider that premium loyalty members are 4x more valuable than non-premium loyalty members. Quite impressive!

Members of CVS CarePass spend four times as much as non-CarePass customers.

According to McKinsey, members of these premium loyalty programs are 60% more likely to spend more on your brand, while free loyalty programs only increase that likelihood by 30%.

Beyond the engagement and financial benefits you receive from these members, their value goes beyond your program because they tell everyone they know about you and become brand advocates.

Nearly 90% would recommend a retailer to family or friends if the retailer’s premium loyalty program offers valuable benefits

Their value is apparent and always there.

There Is More Urgency Around Launching a Premium Loyalty Program

We know a few realities that have occurred in the past year.

COVID-19 changed consumer behavior dramatically, and maybe forever. Retailers have seen a massive shift toward ecommerce. Consumers have been pushed online and the competition has heated up.

Consider that Walmart’s U.S. ecommerce revenue increased 79% in fiscal 2021.

With heightened consumer expectations along with seemingly infinite options, retailers feel a sense of urgency about differentiating themselves.

You know that your customers prioritize simplicity and convenience now above all else.

Listen to your customers, resolve their pain points, and strengthen emotional connections with your brand.

The impact of COVID-19 on consumer behavior is immense.

According to McKinsey, 35% of U.S. consumers have tried a new brand since the COVID-19 pandemic began while 77% demonstrated new shopping behaviors, including new channels, stores, and brands.

Nearly two-thirds of customers say their loyalty is more difficult for retailers to maintain than ever before.

Traditional loyalty programs reward members slowly; premium loyalty programs provide massive value from Day 1.

We live in an “instant” society where consumers want everything now. That’s why instant benefits are an attractive ingredient of premium loyalty programs.

Our 2020 Premium Loyalty Data Study shows that free shipping (66%) and instant discounts (60%) are the top two perks that motivate consumers to join one of these programs.

You want to protect your best and most loyal customers.

You need to give consumers a reason to engage with your brand. And a premium loyalty program is a great reason!

Brand differentiation can’t happen at the product and price levels alone.

It must happen at the customer experience level as well. Take lululemon, for example.

Transactional benefits like free shipping and discounts are important to consumers and they elicit an emotional response.

But that experiential element is what shows how a premium loyalty program differentiates itself.

Lululemon’s premium loyalty program awards members curated events and workout classes. These experiences make your brand and program stand out among consumers.

And they also make your brand more memorable and desired.

While traditional loyalty can be transient, premium loyalty is a true commitment. The premium loyalty paradigm will allow you to retain your most valuable customers and make them exponentially more valuable.

Today’s consumer behavior has made it quite challenging for al retailers to create differentiation.

Building true loyalty requires brands to offer unique experiences that aren’t available anywhere and add significant value to their lives.

To achieve this, you need to consider a premium loyalty program or tier in 2021.

Premium Loyalty Programs Increase Engagement

The global pandemic has accelerated the differentiation process for retailers and heightened consumer expectations.

As a result, brands are seeking ways to stand out from the crowd, retain more loyal customers, and exceed those expectations.

Premium loyalty programs focus on retention and increased engagement via personalized experiences. Members know that they’re getting the best possible experience every time they use the program, so engagement increases.

Seventy percent of consumers not in a premium loyalty program would join if their favorite retailer offered one and the benefits were valuable.

Also, 88% of respondents are likely to choose a retailer whose premium loyalty program they belong to over a competitor that is offering a lower price.

By removing any inconveniences, your premium loyalty program will remain top of mind for your members.

Members receive a seamless omnichannel experience.

A premium loyalty program offers another channel through which a brand can communicate with customers and provides invaluable data on your best customers.

Ninety-four percent of premium loyalty members shop at that retailer at least once a month.

According to McKinsey, nearly 60% of premium loyalty members are more likely to choose that retailer over a brand with a lower price; and 62% are more likely to spend more on that brand.

This paradigm creates greater loyalty and trust with your customers.

Why Wouldn’t You Consider Launching a Premium Loyalty Program?

With a premium loyalty program, members enjoy the best of the brand, all the time, because data collected on shopping habits and personal interests can be used to personalize the experience of each member, and the membership fees can offset better benefits.

Also, you don’t have to get rid of your free program. In fact, 67% of consumers are likely to join a premium loyalty program if they already belong to that retailer’s free loyalty program (74% for millennials.)

There’s a reason why Walmart officials are onboard with premium loyalty.

Since customers pay to become members of a premium loyalty program, brand officials know that the ones who raise their hands to sign up are deeply committed to your brand.

Premium loyalty programs will attract your best customers who will become more highly engaged and more valuable customers.

If you’re interested in discussing a premium loyalty program for your brand in 2021, we’d be happy to provide more insights. Feel free to contact us here.


ebbo helps brands achieve their customer loyalty goals with full-service, end-to-end solutions and also creates original educational content straight from the experts to help loyalty marketers stay on the cutting edge of customer engagement.

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ebbo™ is an all-in-one loyalty company. With our data driven strategy, full-service approach, and the unwavering support of the people behind the platform, our dedicated team will work with you to understand your loyalty goals, innovate solutions and help you build customer engagement on repeat.

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