The influence of loyalty programme membership on customer purchase behaviour

Abstract

PurposeIn the retailing sector, consumers typically patronize multiple outlets, which leaves outlets striving to earn a greater portion of consumer expenditures. The purpose of this paper is to improve theoretical and empirical knowledge about the impact of retailing loyalty programmes on customer purchasing behaviour.Design/methodology/approachThe effects of two loyalty programmes on customer behaviour are studied through marketwide panel data on supermarket purchases.FindingsThe impact of loyalty programme membership on customer purchase behaviour is significant.Research limitations/implicationsAll behavioural indicators show that members and non‐members of loyalty programmes demonstrate significantly different purchase behaviours, irrespective of other factors. The purchase intensity of cardholders, in terms of total and average shopping baskets, share of purchases, purchase frequency and inter‐purchase time, is significantly higher than that of non‐members throughout the entire three‐year period and the trading areas. The findings require confirmation in other retailing sectors before they may be considered fully generalisable.Practical implicationsRetailers may apply the findings in their attempts to segment their target market, which enables them to allocate their marketing expenditures more effectively.Originality/valueThe study contributes to more “generalisable” knowledge by investigating marketwide scanner panel data about competitive purchasing, loyalty programmes and store locations.