Retail: Bonus for loyalty: How retailers attract customers

The advertising is hard to miss. “Ten percent off your next purchase” – that’s what big retail chains like Lidl, Rewe and Penny are drumming up on all channels these days for their apps and their own bonus and loyalty programs.

The aim is to lure customers and bind them more firmly. The dealers resort to a trick. “More and more special offers can only be used if you register for the retailer app and are willing to give your data. If not, you’re out of luck,” says Carsten Kortum, professor at the Baden-Württemberg Cooperative State University Heilbronn.

In the apps, customers and retailers enter into an exchange transaction: customers receive exclusive benefits. Sometimes there are additional items on offer, sometimes there is an extra discount on reduced products. The discounter Lidl launched its own Dubai chocolate a few days ago. Lidl app users pay 45 percent less than everyone else.

Special offers have become more important

In the best case scenario, retailers receive more loyal customers and their data. They help you understand what buyers want. You can better respond to their preferences and influence their purchasing behavior. According to a survey by the retail research institute IFH, more than four out of five customers in Germany use retailers’ own bonus programs or payback.

Loyalty programs are not new. The Swedish furniture retailer Ikea was one of the first to introduce the “Family Card” in 1984. Aldi is the only large retail company that does not have a benefit program. The fact that they are in demand is also due to the fact that not only many foods have recently become more expensive. Special offers have become more important. Price-sensitive customers take advantage of every opportunity to save. The competition between retailers is correspondingly fierce.

Rewe launches new loyalty program

At the end of the year there will be movement on the topic. The Rewe Group is exiting Payback and starting its own new bonus programs in its apps. The German Press Agency has learned from company circles what will happen next: Rewe customers will in future be able to purchase a bonus in euros when purchasing certain items. Some items cost 10 or 20 cents each, others a euro or more. Several hundred changing items are said to be linked to coupons.

The collected credit can be redeemed when shopping. Anyone who purchases a value of 400 euros within a month will also receive ten percent on their first purchase in the following month. In addition, there are still offers that are reserved for app users. Penny, Rewe’s discounter subsidiary, is also receiving a new bonus system.

From the company’s environment, the step is also justified by high costs. The supermarket chain Rewe alone is said to have paid almost 150 million euros per year to Payback, according to industry circles. With more than 30 million users in Germany, Payback is by far the best-known and most used bonus program. Customers can collect points in many different stores, including Aral, dm and Thalia. From the beginning of 2025, this will also be possible in Edeka and Netto stores, and from the end of the year in branches of the Galeria department store chain.

Bonus program users often buy more

From the perspective of industry experts, Rewe’s exit represents both an opportunity and a risk. It is uncertain whether many customers will leave as a result, says retail expert Kortum. Other factors also played a role when choosing a shopping location, such as quality, selection, availability and service.

Many customers obviously don’t take loyalty very seriously. The market researchers at NIQ see a trend towards shop hopping, i.e. towards several smaller purchases spread across different stores. Fewer and fewer people do their large weekly shopping exclusively in one store. This only accounts for a fifth of sales. It is said that overall loyalty to retailers is declining.

Nevertheless, bonus programs have an effect. According to the IFH survey, 56 percent of users buy from a retailer more often, and one in three spends more money. Many customers have four or more different shopping apps on their cell phones, but don’t use all of them regularly. There is a need for lasting added value and incentive, says the managing director of IFH Media Analytics, Andreas Riekötter. If this is not the case, the apps will be deleted again.

The managing director of the price comparison portal Smhaggle, Sven Reuter, considers the benefits of the bonus programs to be manageable. The average savings across providers is only one percent, he says. “By specifically purchasing special offers and changing retailers, you can save more conveniently and significantly more.”

Consumer advocates warn

A lot is likely to happen with the advantage programs in the future. Artificial intelligence is likely to play a major role in this. Retail expert Kortum expects that retailers will soon be able to serve customers in a much more targeted manner. He cites the streaming provider Spotify as a role model. In the app, users can put together their own playlists tailored to their tastes.

The supermarket chain Albert Heijn recently integrated an AI into its app that supports customers with shopping and provides recipe ideas on demand. Many people in Germany are also open to it. According to a Bitkom survey, one in two people would like to use AI to find bargains. 22 percent would think it would be good if required drugstore items or groceries were automatically reordered.

According to Kortum, there is one main reason why not all customers take advantage of apps and loyalty programs. “Many people are afraid because they don’t know what will happen to their data.” Consumer advocates are critical of the apps. Consumers should read the data protection regulations carefully and change settings if necessary, says Simone Bueb from the Bavarian Consumer Center.