Loyalty programs have gained significant value in the travel landscape, with data-driven insights informing the latest trends. In 2023, we witness the rise of personalized rewards, strategic partnerships, experiential perks, and diversification as dominant forces empowering travelers to maximize their loyalty memberships. These trends are also impacting the financial services sector, and how FS brands can leverage valuable insights from the travel industry to enhance their loyalty programs.
Data from Valuedynamx reveals a remarkable resurgence in travel across EMEA. Travel bookings have surged, with customers booking in advance to secure the best offers and earn rewards on their travel purchases. Compared to 2019, travel sites like Booking.com, Hotels.com, and Vrbo have seen a massive 200% increase in spend, with approximately 50% more spent per purchase. This increasing travel volume has led consumers to seek the best available rewards and represents overall growth of 63%, in loyalty programs worldwide .
In 2023 alone, travel spend has already risen by 80% year on year fuelled in part by a 20% increase in cash per purchase.
While travel has experienced a substantial uplift in spend, other sectors are also seeing positive trends. Throughout the pandemic, different categories flourished based on immediate requirements, such as home office setups, seasonal home and garden products, as well as holiday shopping. As spend returns to pre-pandemic levels, we’ve observed the following EMEA trends during the early half of 2023:
1. Food & Drink: A remarkable 250% increase in spend compared to 2019 has been observed in this category, driven by platforms like Just Eat, Deliveroo, and Hello Fresh.
2. Sports & Fitness: The EMEA region witnessed a 140% surge in spend on sports and fitness-related products, with popular brands like Nike.com, Adidas, and Sweaty Betty leading the way.
3. Entertainment & Leisure: This category experienced significant increases, with 179% more spent per purchase compared to 2019. Platforms like Ticketmaster, Groupon, and ATG Tickets represent the main growth drivers.
To take advantage of this burgeoning spend and shift in spending habits, here are four trends in loyalty to empower brands and business leaders to make the most of their loyalty memberships and customer experience programs.
1. Personalized rewards driven by data
Much like many other aspects of business, content is key to success in loyalty programs. But the right content on its own is not enough. Brands must use customer data to understand their audience, collecting and aggregating data on the rewards their customers engage with most, and using those insights to present increasingly tailored content and offers that align with their interests and spending habits.
For example, banks possess a huge amount of transactional data. Using these insights, they can leverage transactional data to analyze historical spending patterns and present customers with relevant content tailored to their everyday purchases. The more sophisticated your personalization, the better your program operates.
2. Experiential perks
In our modern world, people crave something more than their traditional shopping and in-store transactions. People want experiences. They want to feel special and valued.
In loyalty programs, experiences essentially represent another form of content. By presenting customers with a range of choice, members can pick from a variety of experiences on which to spend their points. For example, cutting-edge tools like AI and machine learning can identify a customer's favorite sports team, and offer them exclusive rewards, such as matchday tickets, shirts, or other memorabilia.
Many brands are also exploring ways for customers to redeem their points in other formats, such as exchanging flight points for gift cards to spend in retail stores. Other experiential perks include the ability to repurpose points for worthy causes, such as donating points to charities, or even purchasing credits that contribute to carbon offsets.
3. Strategic partnerships
Partners can make or break a loyalty program. Brands should be looking for partners with a wide range of capabilities, such as the ability to curate content for rewards programs, and being able to customize the program itself to suits the needs and wants of your customers.
That's why the right platform is so important. The best platforms will typically already possess hundreds (if not thousands) of existing integrated retailers and partners. This means brands don't have to waste time and resource establishing partnerships – they're all accessible from the get-go. A single integration with one strategic partner grants your loyalty platform instant access to hundreds of brands that have already been onboarded.
Tapping into everyday spend is critical. And that's why diversification is so important to the success of a loyalty program. And this can come in many forms, such as diversification of rewards offered, from retail stores to airlines, and travel booking sites to hospitality.
But also, diversification of payment methods – from online purchases to card-linked offers in-store. The goal is to make it as easy and seamless as possible for customers to integrate their loyalty spend into their everyday lives – in doing so, becoming their primary loyalty program of choice.
Spending habits can differ depending on geography and region, giving brands a unique opportunity to tailor their content and rewards to people depending on where they live, granted they have the right data.
According to our recent research here are some key insights we’ve identified in the US market*:
- Over the next six months, grocery, gas, and dining purchases will increase in popularity, and are more likely to be made in-person rather than online. - 50% of Americans rank cashback as their #1 card benefit.
- At 19%, twice as many cardholders are using their go-to card for its cashback feature over any other card benefit.
- 58% of Americans say they’d switch from their current go-to card to a new card if offered higher cashback rates.
The 2023 loyalty program trends are driven by data-led insights, shaping the travel and financial services sectors. Personalized rewards, experiential perks, strategic partnerships, and diversification are the pillars of successful loyalty programs. By analyzing data and understanding customer preferences, brands can create enticing loyalty programs that drive engagement, customer loyalty, and repeat business. Valuedynamx serves as a vital partner, offering access to over 5000 merchants and empowering businesses to elevate customer loyalty and enhance engagement through data-driven loyalty programs.
*The Loyalty Motivators Research was an online survey conducted by Leger on behalf of Valuedynamx between April 4-12, 2023, with 1,004 US residents aged 18+ surveyed.