Press Releases
Cardlytics Announces Timing of Its Third Quarter 2022 Financial Results Conference Call and Webcast
Atlanta, GA – October 18, 2022 – Cardlytics, Inc., (NASDAQ: CDLX), an advertising platform in banks’ digital channels, today announced that its third quarter ended September 30, 2022 financial results will be released on Tuesday, November 1, 2022, after market close. The company will host a conference call and webcast at 5:00 PM (ET) / 2:00 PM (PT) to discuss the company’s financial results.
A live audio webcast of the event will be available on the Cardlytics Investor Relations website at http://ir.cardlytics.com/. A live dial-in will be available after registering at this link. Shortly after the conclusion of the call, a replay of this conference call will be available through 8:00 PM ET on November 8, 2022 on the Cardlytics Investor Relations website at http://ir.cardlytics.com/.
About Cardlytics
Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in Palo Alto, Los Angeles, New York, and London. Learn more at www.cardlytics.com.
Cardlytics Announces Inducement Grant Under Nasdaq Listing Rule 5635(c)(4)
ATLANTA, GA – January 23, 2023 - Cardlytics (NASDAQ: CDLX), an advertising platform in banks’ digital channels, today announced that Cardlytics’ Board of Directors granted 350,000 restricted stock units of Cardlytics to Amit Gupta, Cardlytics’ newly hired Chief Operating Officer. The foregoing restricted stock units were granted as a material inducement to employment with Cardlytics in accordance with Nasdaq Listing Rule 5635(c)(4) and were granted under the Cardlytics 2022 Inducement Plan (the “2022 Inducement Plan”). 50% of the restricted stock units shall vest on the first anniversary of the grant date and the remaining 50% of the restricted stock units shall vest quarterly over the following year, subject to Gupta’s continuous service with Cardlytics as of each respective vesting date. The restricted stock units are subject to the terms and conditions of the 2022 Inducement Plan.
About Cardlytics
Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in Palo Alto, Los Angeles, New York, and London. Learn more at www.cardlytics.com.
Contacts:
Public Relations:
Robert Robinson
Investor Relations:
Robert Robinson
Cardlytics Appoints Amit Gupta as Chief Operating Officer
ATLANTA, GA – January 23, 2022 – Cardlytics (NASDAQ: CDLX), an advertising platform in banks’ digital channels, today announced the appointment of Amit Gupta as its Chief Operating Officer, reporting directly to Karim Temsamani, Chief Executive Officer.
Effective today, Gupta will lead Cardlytics’ overall operations, strategy, and business analytics, where he will closely align with sales, product, and engineering leadership to deliver an optimized platform that exceeds both advertiser and partner expectations. In addition, Gupta will serve as the general manager of Bridg, where Cardlytics can leverage his experience running and scaling businesses. Amit Jain, current CEO of Bridg, will work closely with Gupta as he transitions out of the business over the next several months.
“Cardlytics is delighted to have attracted such a thoughtful, experienced and operationally strong executive,” said Temsamani. “Amit and I worked together for several years at Stripe, where he always impressed me with his strategic and technical abilities. I look forward to resuming our partnership as we optimize and grow the potential of the Cardlytics business."
Gupta joins Cardlytics from Stripe where he was Head of Strategy and Operations for Global Partnerships, responsible for work with banks, networks, and payment methods. Before Stripe, Gupta was Director of Strategy, New Products, and Operations for Google’s Geo division, leading product and engineering execution and strategy for popular consumer and business products like Google Maps, Local Search, Food, Maps Enterprise Platform, and SMBs. Prior, Gupta founded and was the CEO of a series of startups. He started his career at Booz Allen Hamilton, where he was promoted to Partner in the Technology practice working with clients across media, financial services, and consumer products.
“I am extremely excited to join the Cardlytics team. My background in both advertising and financial technology gives me a unique perspective on Cardlytics’ current capabilities and future product offerings. The product roadmap ahead makes now the perfect time to focus on operational excellence by optimizing the efficiency of the core platform and unlocking the potential of the promising Bridg business. I’m looking forward to helping the team execute on our goals and harness the full power of the platform in such a pivotal moment,” said Gupta.
Gupta holds a Bachelor of Science, Electrical Engineering from The Ohio State University and a Master of Business Administration from the NYU Stern School of Business. He will be based in Cardlytics’ Palo Alto office.
About Cardlytics
Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in Palo Alto, New York, Los Angeles, and London. Learn more at www.cardlytics.com.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to future growth and delivery of an optimized platform. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," or variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control.
Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to the risks detailed in the “Risk Factors” section of our Form 10-Q filed with the Securities and Exchange Commission on November 1, 2022 and in subsequent periodic reports that we file with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results.
The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Contacts:
Public Relations:
Robert Robinson
Investor Relations:
Robert Robinson
Cardlytics Announces Third Quarter 2022 Financial Results
Atlanta, GA – November 1, 2022 – Cardlytics, Inc. (NASDAQ: CDLX), a digital advertising platform, today announced financial results for the third quarter ended September 30, 2022. Supplemental information is available on the Investor Relations section of Cardlytics' website at http://ir.cardlytics.com/.
“We delivered solid double-digit growth despite the serious challenges present in the economy,” said Karim Temsamani, CEO of Cardlytics. “While the economy may be uncertain, I believe there is inherent resiliency in platforms that prove return on ad spend, and I am positive that we can grow profitably. There is a large opportunity ahead of us, and we will be disciplined in Q4 and beyond as we prioritize our goals and position the company well for the next ten years.”
“Our results this quarter were in line with our expectations given our clients' concerns about the economy,” said Andy Christiansen, CFO of Cardlytics. “There is a wide range of outcomes for Q4, but our highest priority is meeting our profitability and cash flow goals for 2023. We are focused on taking the necessary steps to ensure we can control our destiny and achieve our long-term goals.”
Third Quarter 2022 Financial Results
- Revenue was $72.7 million, an increase of 12% year-over-year, compared to $65.0 million in the third quarter of 2021.
- Billings, a non-GAAP metric, was $110.4 million, an increase of 12% year-over-year, compared to $98.4 million in the third quarter of 2021.
- Gross profit was $26.0 million, an increase of 6% year-over-year, compared to $24.5 million in the third quarter of 2021.
- Adjusted contribution, a non-GAAP metric, was $35.1 million, an increase of 11% year-over-year, compared to $31.6 million in the third quarter of 2021.
- Net income attributable to common stockholders was $6.3 million, or $0.19 per diluted share, based on 33.3 million fully diluted weighted-average common shares, compared to a net loss attributable to common stockholders of $(44.5) million, or $(1.35) per diluted share, based on 33.1 million fully diluted weighted-average common shares in the third quarter of 2021.
- Non-GAAP net loss was $(16.5) million, or $(0.50) per diluted share, based on 33.3 million fully diluted weighted-average common shares, compared to non-GAAP net loss of $(11.0) million, or $(0.33) per diluted share, based on 33.1 million fully diluted weighted-average common shares in the third quarter of 2021.
- Adjusted EBITDA, a non-GAAP metric, was a loss of $(12.7) million compared to a loss of $(5.2) million in the third quarter of 2021.
Key Metrics
- Cardlytics MAUs were 184.7 million, an increase of 8%, compared to 170.6 million in the third quarter of 2021.
- Cardlytics ARPU was $0.36 in the third quarter of 2022 and 2021.
- Bridg ARR was $22.1 million in the third quarter of 2022.
Definitions of MAUs, ARPU and ARR are included below under the caption “Non-GAAP Measures and Other Performance Metrics."
Fourth Quarter 2022 Financial Expectations
Cardlytics anticipates billings, revenue, and adjusted contribution to be in the following ranges (in millions):
Q4 2022 GuidanceBillings(1)$120.0 - $132.0Revenue$80.0 - $90.0Adjusted contribution(2)$38.0 - $44.0
- A reconciliation of billings to GAAP revenue on a forward-looking basis is presented below under the heading "Reconciliation of Forecasted GAAP Revenue to Billings."
- A reconciliation of adjusted contribution to GAAP gross profit on a forward-looking basis is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the items excluded from this non-GAAP measure.
Earnings Teleconference Information
Cardlytics will discuss its third quarter 2022 financial results during a teleconference today, November 1, 2022, at 5:00 PM ET / 2:00 PM PT. A live dial-in will be available after registering at http://ir.cardlytics.com/. Shortly after the conclusion of the call, a replay of this conference call will be available through 8:00 PM ET on November 8, 2022 on the Cardlytics Investor Relations website at http://ir.cardlytics.com/. Following the completion of the call, a recorded replay of the webcast will be available on Cardlytics’ website.
About Cardlytics
Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in London, New York, Los Angeles, San Francisco, Austin, Detroit and Visakhapatnam. Learn more at www.cardlytics.com.
Cardlytics’ Back-to-School Trend Analysis Shows Impact of Omnichannel on Consumer Spend and Retention
Analysis offers insight from previous back-to-school seasons ahead of the second-largest shopping event of the year
ATLANTA – August 1, 2022 – Cardlytics (NASDAQ: CDLX) released its annual back-to-school (BTS) trend analysis, which underscores the importance of providing consumers with an omnichannel shopping experience to maximize consumer loyalty. The analysis, which comes as 62 percent of consumers start their back-to-school shopping this month, examines previous BTS spending behaviors for a sense of what to expect during the 2022 BTS shopping season amid the backdrop of rising inflation.
Key Takeaway
Notably, the analysis found that consumers who shop across channels (e.g., in-store, online, apps, etc.) spend more. In 2021, shoppers using just one channel spent an average of $900 during the back-to-school shopping season, but those who purchased items across multiple channels spent over $1,000. Even as customers spent more across both on and offline channels in 2022, in-store shopping remains the preferred method for most. It also shows that in-store sales are slowly returning to pre-COVID levels at 63 percent of total spend in 2021, compared to 61 percent in 2020, and 73 percent in 2019.
As shoppers gear up for the 2022 season, inflation may drive these figures higher due to spend per purchase, but that does not necessarily equate to increased purchases in any given category. Cardlytics’ Q1 2022 State of Spend report saw a slowdown in spending toward the end of Q1 as consumers made adjustments to accommodate increased costs in goods, food, gas, and housing brought on by the highest inflation seen since the 1980s. This could continue into the BTS and holiday 2022 seasons as customers focus on purchasing essentials and possibly engage in more one-stop shopping.
“Convincing your customers to convert on both online and offline channels is essential to maximizing incremental sales and customer loyalty,” said Nate Bucholz, Cardlytics’ vice president of DTC, Subscription, and Retail. “Our insights continue to show that people shopping across a brand’s available channels spend more than those who shop in only one channel. And they are more likely to return. Looking at your customer base through the lens of the channel they shop can help you get the most impact from your marketing spend. I would encourage brands to offer the best sales and cashback rewards now to acquire and retain customers as they head into the holidays, which is the last big shopping season of the year.”
Click here or on the image above to open the full-size infographic in a new window.
Additional Trend Highlights
The back-to-school season is the second largest shopping event of the year behind the December holiday season, making up 15 percent of annual consumer spending. The analysis includes sales for apparel, home décor, office supplies, sporting goods, shoes, and mass merchandiser, finding that:
- Overall spend was flat with only a 1.2 percent increase between 2020 and 2021. This is likely due to declines in customer volume and total purchases – defined as the number of actual customers making purchases in these categories. This trend may continue through the 2022 BTS season with minimal growth as customers tighten their wallets and only increase their spending in response to increased prices.
- Apparel had a strong 2021 back-to-school season as parents rushed to refresh wardrobes for in-person schooling. The data showed that spend increased by 24.3 percent year-over-year in this category, driven by strong customer and purchase growth. Spend increases in this category were due to genuine growth and are not a byproduct of current inflation. It is predicted that due to tightening economic conditions and the fact that people spent significantly more last year than the year before, it is likely that there will be a flat or negative spend growth for 2022.
- Shoes and children’s apparel saw significant increases as well last year. Shoes had a nearly 30 percent year-over-year increase while children’s apparel saw a 13.2 percent jump. But, shoe companies are bracing for weaker sales for the latter half of this year, which could impact overall growth for this category in 2022.
- Consumers cut back on home and office supplies in 2021, and this trend has a strong chance of continuing as more children return to classrooms in 2022. Home and office supply spending was down 8 and 8.8 percent, respectively, as fewer purchases were needed for homeschooling and to counterbalance heavy spending in previous years.
- Department stores also experienced greater sales with increases across volume of shoppers, number of purchases, and spend per purchase. Year-over-year spend went up by 22.4 percent. Spending in this category may also feel the impact of inflation, particularly when it comes to spend per purchase – while consumers may have less items in their cart, this may be offset by increased costs for each item.
The review covers an eight-week period beginning the second weekend of July and lasting through Labor Day. Early insights from the first two weeks of July 2022 show that spend is down 8.4 percent YoY as customers brace for economic uncertainty. This points to a decline in the number of customers and purchases resulting in a sluggish start this season across all categories. To view the full trend analysis, visit: https://www.cardlytics.com/blog/customer-loyalty-is-the-battleground-for-back-to-school/
About Cardlytics
Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in London, New York, Los Angeles, San Francisco, Austin, Detroit, and Visakhapatnam. Learn more at www.cardlytics.com.
<strong>Cardlytics Announces Second Quarter 2022 Financial Results</strong>
Atlanta, GA – August 2, 2022 – Cardlytics, Inc. (NASDAQ: CDLX), a digital advertising platform, today announced financial results for the second quarter ended June 30, 2022. Supplemental information is available on the Investor Relations section of Cardlytics' website at ir.cardlytics.com.
“I am pleased with our growth in the first half of the year despite the growing pressure macro conditions are having on consumer spending and ad budgets,” said Lynne Laube, CEO & Co-Founder of Cardlytics. “We are also pleased with the progress we are seeing in the Bridg acquisition and expect to see further proof points in future quarters. The combination of the Cardlytics and Bridg data sets has us on the cusp of being able to scale the business beyond our core platform, while our focus on financial goals will allow us to control our own destiny moving forward.”
“We are committed to meeting our adjusted EBITDA and free cash flow goals in 2023, and we’re taking several proactive steps to reduce our cost structure in recognition of the lower-growth environment we are entering,” said Andy Christiansen, CFO of Cardlytics. “We expect year-over-year growth of approximately 10 to 15% in the back half of 2022, and I believe we can navigate a lower growth environment with minimal impact on the long-term prospects of the business.”
Second Quarter 2022 Financial Results
- Revenue was $75.4 million, an increase of 28% year-over-year, compared to $58.9 million in the second quarter of 2021.
- Billings, a non-GAAP metric, was $107.7 million, an increase of 26% year-over-year, compared to $85.3 million in the second quarter of 2021.
- Gross profit was $27.0 million, an increase of 16% year-over-year, compared to $23.2 million in the second quarter of 2021.
- Adjusted contribution, a non-GAAP metric, was $35.1 million, an increase of 19% year-over-year, compared to $29.6 million in the second quarter of 2021.
- Net loss attributable to common stockholders was $(126.3) million, or $(3.75) per diluted share, based on 33.6 million fully diluted weighted-average common shares, compared to a net loss attributable to common stockholders of $(47.3) million, or $(1.43) per diluted share, based on 33.0 million fully diluted weighted-average common shares in the second quarter of 2021.
- Non-GAAP net loss was $(21.7) million, or $(0.65) per diluted share, based on 33.6 million fully diluted weighted-average common shares, compared to non-GAAP net loss of $(12.8) million, or $(0.39) per diluted share, based on 33.0 million fully diluted weighted-average common shares in the second quarter of 2021.
- Adjusted EBITDA, a non-GAAP metric, was a loss of $(15.8) million compared to a loss of $(5.7) million in the second quarter of 2021.
Key Metrics
- Cardlytics MAUs were 179.9 million, an increase of 7%, compared to 167.6 million in the second quarter of 2021.
- Cardlytics ARPU was $0.38, an increase of 12%, compared to $0.34 in the second quarter of 2021.
- Bridg ARR was $21.8 million in the second quarter of 2022.
Definitions of MAUs, ARPU and ARR are included below under the caption “Non-GAAP Measures and Other Performance Metrics.
Earnings Teleconference Information
Cardlytics will discuss its second quarter 2022 financial results during a teleconference today, August 2, 2022, at 5:00 PM ET / 2:00 PM PT. A live dial-in will be available after registering at this link. Shortly after the conclusion of the call, a replay of this conference call will be available through 8:00 PM ET on August 9, 2022 on the Cardlytics Investor Relations website at ir.cardlytics.com. Following the completion of the call, a recorded replay of the webcast will be available on Cardlytics’ website.
About Cardlytics
Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in London, New York, Los Angeles, San Francisco, Austin, Detroit and Visakhapatnam. Learn more at www.cardlytics.com.
Research & Insights
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Executive Summary
- Advertisers have increasingly used MMMs to better analyze the performance of their marketing efforts across channels, but continue to face some challenges with data.
- Measurement of card-linked offer (CLO) programs have also historically posed a challenge to MMMs.
- Cardlytics is working with leading marketing measurement experts to develop best practices for integrating Cardlytics campaign data into media mix models, helping our advertisers more accurately measure incremental impact of Cardlytics campaigns and the rest of their marketing program.
Media Mix Models and card-linked offers
For brand advertisers to truly understand and analyze the performance of their marketing efforts, measurement plays an essential role. Since it is not enough to analyze the performance of a single channel in isolation, advertisers lean on Media Mix Modeling (MMM) solutions to better understand the full picture of their marketing efforts, which channels are impacting their overall spend, and how to determine future budget allocation. MMMs have been especially beneficial for marketing analysis and reporting, marketing budget optimization, scenario planning, and performance tracking – but advertisers continue to face challenges with data quality, invalid or incomplete data inputs, and accounting for broader shifts in market economics.
Measuring the effectiveness of card-linked offer (CLO) programs, such as Cardlytics’ platform, have historically posed a challenge to MMMs. Because our platform shows digital ads within the walled environment of digital banking channels and measures performance through card-linked data from our banking partners, it has been difficult for advertisers to get an accurate view of CLO performance.
Integrating Cardlytics data with MMMs
To help our advertisers address these challenges with CLO measurement, we are excited to announce that Cardlytics will be working with leading MMMs, including Analytic Partners and Ipsos MMA. By integrating Cardlytics data into these models, we are able to help our advertisers, modelers and analysts better understand the unique value of our platform as part of the overall marketing mix.
Through a tailored training program with each MMM, we are working together to ensure that:
- Cardlytics data is properly incorporated into their models
- Modelers understand how Cardlytics and card-linked offers work, and how CLO campaigns are measured
- Data is interpreted appropriately and modelers are equipped with best practices for potential enhancements to their models (e.g., elevating lower-funnel metrics such as clicks and redemptions, rather than just ad impressions)
In addition to integrating into MMMs, Cardlytics continues to invest in our own Test vs. Control solution to demonstrate the incremental benefits of our platform.
Considerations for enhancing measurement
It’s important for advertisers to keep the following considerations in mind when thinking about CLO measurement with MMMs:
- Pay-for-performance advertising means that model relationships seen in other digital channels may not exist. Some models are better for upper-funnel media channels, which may not be appropriate for measuring the effectiveness of CLO campaigns.
- Our adstock and ability to provide campaign-level detail are unique, and provide full funnel visibility for deterministic customers, from impression to engagement to purchase.
- Supplementing with customer-level metrics (e.g., Cardlytics’ Test vs. Control analysis) can provide a more comprehensive picture of campaign effectiveness.
If you are interested in learning more or already partner with an MMM, reach out to your Cardlytics Account Manager or email mmm@cardlytics.com to discuss how we can help ensure your CLO program is being measured properly.
Redefining Customer Loyalty
Introduction
Brands of all sizes know that engaging loyal customers is critical to their business, but how do they know which customers are loyal? Most marketers use first party transaction data to assess how often their customers are shopping or how much they are spending in order to define who their loyal customers are. This approach can lead to an inaccurate view of loyalty because it overlooks whether these customers are spending with competing brands.
Cardlytics has access to $4.7Tn in omni-channel annual card spend, powered by the largest financial institutions in the United States. We have sampled this rich dataset to provide a full-category view of spend that sheds insight on what it really means to be brand-loyal, and how marketers can redefine audiences to make informed, strategic decisions.
Read on to explore the full report (or download it here) and reach out today to get a custom brand-level view of your business’ loyal customers in relation to the category.
Key Takeaways from the Report
Significant potential exists to grow revenue by boosting customer loyalty and increasing their share of wallet.
- 10% of customers are loyal, spending 62% of their budget with the merchant.
- 90% are not loyal, spending only 9% of their budget with the merchant.
- Brands could benefit from 6.9x customer spend by focusing on the 90% of non-loyal customers
Transaction frequency doesn't equate to loyalty.
- Only 50% of a merchant's top shoppers are loyal.
- 48% of a merchant's top shoppers spend 79% of their budget with competitors.
Customer Loyalty & Share of Wallet
Defining Customer Loyalty
Cardlytics defines customer loyalty based on a consumer’s preference for a merchant relative to the competition. In this report, we’ve sampled $160Bn of spend across six large categories to determine what percentage of a merchant’s customers are loyal and how much are those customers spending with the competition as compared to customers that are not loyal.
On average, 10% of a merchant’s customers are loyal (ranging from 5-13% depending on the category). Conversely, 90% of a merchant’s customers are not loyal, on average.
These loyal customers have a share of wallet of 62% (meaning 62% of their category spend is with the merchant). Not loyal customers have a share of wallet of only 9%.
1 Cardlytics applies the principles of the Wallet Allocation Rule to rank existing customers (that spent during the prior and current periods) based on their share of wallet (which is the percentage of a customer’s total spending in a category that goes to a particular merchant) to assess clear first choice based on the relative rank of that merchant. Full methodology included at the end of this report.
Top Customer Loyalty & Share of Wallet
Are Frequent Shoppers Loyal?
In the absence of competitive spend data, Marketers leverage transaction frequency to define loyalty (e.g., “the customers who shop the most frequently are my loyal customers”). Cardlytics isolated the top customers (most frequent purchasers), by merchant, to assess whether this is an appropriate proxy for loyalty. For this group of top customers, we analyzed what percentage of them are loyal (have a clear first choice for the merchant) and how much are they spending with the competition.
On average, only 52% of a merchant’s top customers are loyal (with a clear first choice for the brand). In other words, roughly half of a brand’s top (most frequent) customers prefer to shop at competitive brands.
While the top customers that are loyal have a share of wallet of 60%, the remaining top-customers have a share of wallet of only 21%, meaning 79% of their spend goes to competitors.
1 Cardlytics used a 12 month measurement period for Apparel and Big Box (08/01/23 to 07/31/24) and a 6 month period for all other categories (01/31/24 to 07/31/24) when isolating the top-10% most frequent shoppers. Cardlytics measured the share of wallet ranking for all of these top customers with spend in this period (regardless of whether they were newly acquired by the brand in the period or if they were existing shoppers from the prior period).
What do these insights mean for you?
Supplementing first party transaction data with category-level spending behavior is essential to understanding and defining which customers are loyal (and which customers are not), thereby enabling more informed marketing strategies that deliver growth.
Reach out to Cardlytics to get a custom brand-level view of your business’ loyal customers in relation to the category. For more information, please submit a request.
About Cardlytics
Cardlytics is the world's largest bank rewards network, powering offers for more than 20 of the top bank partners globally, including the world’s largest retail brands, representing $4.7T in consumer spend. Cardlytics helps brands determine what loyalty really looks like across their customer base to identify headroom for growth, reach customers deterministically, and drive conversions.
1. Loyal customers are existing customers of a merchant with a clear first choice for that merchant (relative to the category), as evidenced by their share of wallet ranking (note: existing customers are those with spend in the current and prior periods4).
2. Includes customers that have spent with a merchant but were either newly acquired or lapsed in the current period4, evenly split their category spend between multiple merchants, and/or have a clear preference for competitors.
3. Includes the top-10% of a merchant’s customers based on the number of transactions at the merchant in the trailing 6-12 month period
4. Current period for Apparel and Big Box is 08/01/23 to 07/31/24; current period for all other categories is 01/31/24 to 07/31/24
A Lens on Loyalty: Cardlytics UK State of Spend Report 2024
LONDON, UNITED KINGDOM - 30 JULY 2024: Despite the cost-of-living crisis easing, it continues to play a significant role in shifting consumer behaviour, forcing brands to reconsider how they can inspire loyalty in an environment where consumers are looking to reduce their outgoings, according to a new report from advertising platform Cardlytics.
The State of Loyalty Spend report, based on the spending habits of over 22 million UK bank accounts, along with a poll of 2,000 UK adults conducted by Opinium assessing customer loyalty, found that - despite consumers being increasingly cost-conscious - there is still room for brand loyalty to influence spending behaviour.
Seven in 10 (69%) UK adults view trust in a brand as important to them when making a purchase, whilst three fifths (59%) say that they have been loyal to brands for “as long as they can remember” - a clear indication that brand loyalty is well and truly alive. However, particularly off the back of the cost-of-living crisis, affordability is vital in shaping and influencing purchasing habits. UK adults rank price as the most important factor in the decision-making process, followed by trust in a brand and convenience.
This report examines three specific categories - retail, hospitality and travel - which together demonstrate a clear trend of customers having to balance commitment to the brands they know and love, with limiting financial outgoings. With consumer behaviour in flux, the report includes analysis on some of the factors creating this environment, along with recommendations for business leaders on how they can inspire brand loyalty, whilst also attracting to new customers.
UK restaurant-goers have a greater appetite for what they know
The dining sector is, generally, one of the first areas of discretionary spend that consumers cut when times are tough. With overall spending in restaurants down 8% in 2024 (following a 14% rise in 2023) but spending per trip up by almost a fifth (16%), it’s clear to see the challenges that brands and consumers face in the current environment. Price remains the key driver for customers when it comes to eating out, but other factors, including loyalty, quality, and trust remain relevant.
Over half (54%) of adults choose to return to restaurants they have visited before over trying new alternatives, showing that consumers remain risk averse as economic pressures on households continue to build. Despite this, a similar number (54%) of consumers are more likely to visit a new restaurant if they offer a discount voucher or cash back rewards system; while 45% of UK households are more likely to visit a restaurant if it offers rewards for returning customers. This is evidence of the potential for data-driven tactics to enable restaurants to drive greater footfall and sustain their existing customer base.
Affordability trumps loyalty when it comes to the weekly food shop
Two-thirds (64%) of respondents named affordability as the most important factor when deciding where to shop, a clear indication of impact of record levels of inflation on consumers’ disposable income.
Despite consumers being increasingly cost-conscious, three in five (61%) said they are more likely to visit a store or supermarket if it offers a loyalty or rewards system – rising to 70% for the 18-34 demographic. In an environment where brand loyalty has come under question, this research shows how solutions such as targeted offers and rewards can inspire commitment to brands.
Indeed, loyalty remains an important factor for many consumers, with over half (54%) choosing to travel to shop at their preferred supermarket, even if other options are closer. This should serve as further encouragement for supermarkets that reward their customers for staying faithful, particularly in times where confidence in spending is low.
Holidaymakers balance brand familiarity and cost
When it comes to travel, affordability is key, but building brand loyalty is a clear opportunity - with 69% agreeing that trust in a brand is important when making a purchase. Brands that can unlock insights from their data, and provide tailored offers, will thrive - building greater trust in a time where competition is rife.
Over the last two years, budget airlines have seen a boom, with the total number of trips increasing from 1,750,000 in 2022 to 2,400,000 in the first six months of 2024 (already a 37% rise), whilst non-budget airlines have only increased from 509,000 to 590,000 (a 15% uplift) across the same period.
Equally, the volume of domestic travel has doubled between 2021 and 2024. Whilst this could be down to more people recognising the beauty of the Cornish coast or Yorkshire Dales, affordability is likely to be a key factor driving this uplift. The average transaction value of a domestic holiday (£110) is £20 cheaper than a budget airline flight (without the additional expense of accommodation), less than a third of the price of a non-budget airline, and almost a fifth of the price of a package holiday abroad.
“Whilst affordability will always be key for consumers, particularly in tough economic times for consumers and households, building brand loyalty is key. Whether it’s restaurant-goers sticking with what they know, particularly when they’re rewarded for it, or customers travelling further than they need to take advantage of their favourite supermarket’s loyalty card system, consumers are making savvy decisions based on what suits them – and often, which brands treats them best," Lucy Whittemore, SVP of UK Advertising, Cardlytics states.
"For businesses in hospitality, retail, and travel, where competition is high and interaction with customers is frequent, data will be key. By gleaning insights from customers’ spending data, brands can create, tailored, relevant offers for consumers – both new and existing. This can help them build a deeper connection with the customer, fostering loyalty and trust to drive footfall and incremental growth in spend.”
The full State of Spend Report is available for download here.
Methodology
Cardlytics analysed spending trends based on its purchase intelligence data, which covers over 22 million UK bank accounts. The periods include January and February spending from the last four years (2024, 2023, 2022, 2021).
Cardlytics also conducted research with Opinium looking at customer loyalty. The omnibus surveyed 2,000 UK adults, nationally representative, between 18th and 21st June 2024.