Almost one in two (50%) Australians are unwilling to share their data with retailers, according to a new report from Power Retail, in partnership with the Australian Loyalty Association (ALA).

The report highlights what Australian consumers want most from loyalty programs and what retailers need to do to gain and maintain the trust and loyalty of their customers.

The report not only explores consumer rewards program preferences, but also highlights the challenges facing brands, namely, that even with incentives of all description, majority of shoppers are uncomfortable sharing their data with retailers.

Power Retail editor, Rosalea Catterson said, “While data security is a major concern for consumers, it offers a key opportunity for retailers to adapt and re-build trust with their customers. An up-front approach that communicates clearly with consumers about where and how they use their data and the measures they take to protect customer data, can go a long way to building consumer trust and create opportunities for more personalisation, enhancing loyalty programs in ways that most benefit their customers.”

The report also found that consumers overwhelmingly prefer email communications from retailers (81%), while SMS marketing has fallen out of favour with shoppers, likely due to heightened concerns around data scams.

Loyalty programs, such as Woolworths Everyday Rewards and Coles Flybuys, which offer discounts on spending, full payment of reward items using points, and cashback on spending, are the most well-liked incentives for shoppers.

The report also uncovered an opportunity for retailers to reward customer loyalty and invest in long-term customer relationships by understanding and being adaptable to their needs. Failure by retailers and their rewards programs risk the same fate as the Flybuys program in New Zealand, which closed down in 2023, due to its lack of ability to keep up with changing demands.

When it came to generational preferences, two-thirds (67%)of Gen Z respondents believed that loyalty programs provided a high level of value. This generation also had the highest engagement with loyalty programs out of any generation surveyed.

Respondents in this age bracket demonstrated a greater liking for tiered benefit programs, based on spending, such as the MECCA Beauty Loop, indicating that gamification can be an influencing factor in consumers of that age engaging with a brand loyalty program.

Power Retail CEO and founder, Grant Arnott said, “Retailers that help shoppers easily earn, access and use rewards incentives to ease financial strains stand themselves in a strong place to gain favour with shoppers and achieve long-term loyalty. To achieve this, retailers need to focus on the most reported satisfaction drivers: easy-to-understand schemes, easy-to-use apps and website tools, as well as strong clear customer communication, all of which help to build trust and brand loyalty.”