Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors. We analyzed billions in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In this Report, we dive into customer behavior in the QSR category to better understand engagement over time by analyzing more than £5.8bn in consumer spend behavior.*

Findings: loyalty is fluid, not fixed 

We looked into purchase data at all QSRs in the UK over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior. 

‍QSR Loyalty Movement

‍Overall, quarter over quarter, 36% of customers tend to remain in their existing segments and 26% increase or decrease their loyalty to a merchant, showing that QSR customers tend to be more promiscuous than other industries. Also, there is much more extensive customer loyalty movement within the “not loyal” segments. 

‍Findings: segment movement 

Diving deeper into the individual segments tells us:

• Loyal customers are the most stable, with 58% staying Loyal.
• Prefer customers also show strong retention — 52% remain in that segment.
• Tied customers are the most fluid — only 10% stay Tied, while 58% shift into Loyal or Prefer.
• Churn risk is highest for Prefer customers, with 35% lapsing — nearly 2x higher than Loyal customers (20%).

‍Segment movement
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Customer movement is happening across all segments, but the Tied group shows the highest churn – only 10% remain Tied, while a combined 58% shift into either Loyal (32%) or Prefer (26%). This volatility signals an opportunity to convert mid-loyalty shoppers with targeted interventions.

QSR Leaky Bucket 

QSR brands are losing customers faster than they are acquiring them – with Lapsed customers (22.3%) outpacing New customers (15.9%). This signals a need to strengthen retention strategies to prevent long-term erosion of customer loyalty.

Takeaways: It’s more costly to acquire or re-acquire customers than to keep existing ones engaged. 

Our analysis shows that 22% of QSR customers have lapsed, outpacing the 15.9% of new customers being acquired. Brands are at risk of net customer loss unless they prioritise loyalty-building efforts.

Our segment movement data also reveals that “Tied” customers are the most fluid, with 90% shifting into other behaviours — with both gains and losses. In contrast, Loyal customers remain relatively stable, and Prefer customers show moderate retention.

To protect and grow market share, marketers must go beyond acquisition. Nurturing relationships and strengthening loyalty can have a direct impact on retention and revenue. 

To foster loyalty, consider these recommendations:

• Deploy an “always-on” strategy to stay connected with customers, regardless of purchase frequency.
• Continuously refine customer segments and tailor reward structures to reflect shifting behaviours.
• Launch targeted campaigns focused on converting fluid segments (like Tied and Prefer) into Loyal customers.

The Secret Sauce to Retaining Customers

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‍Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors. We analyzed $160B in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our Loyalty Movement Report, we dive into customer behavior in the QSR category to better understand engagement over time by analyzing more than $44B in consumer spend behavior.*

QSR Category Loyal Customers

On average, 81% of the category’s customers are not actually  loyal to any brand. But the loyal segment has a much higher share of wallet (67%) than a not loyal segment (15%).

Top Customers (top 10% of most frequent transactors) are show  reverse allegiance vs overall customers. And the loyal customer segment shows more than 3x higher share of wallet.

Findings

We looked into purchase data at all QSRs in the US over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior. 

QSR Loyalty Movement

Overall, quarter over quarter, 58% of customers tend to remain in their existing segments and 21% increase or decrease their loyalty to a merchant, showing that QSR customers tend to be more promiscuous than other industries. Also, there is much more extensive customer loyalty movement within the “not loyal” segments.

Segment Movement

While all segments show purchase behavior movement, the Tied segment (part of Not Loyal customers) shows the most movement - both up (26%) and down (45%) - into other segments.

QSR Leaky Bucket

QSR brands are acquiring new customers at a 3x faster clip than they are losing customers. Yet these customers are less loyal to any specific brand so nurturing the relationship is key.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 63% and 72% staying the same, respectively). Those customers that are Tied have the greatest propensity for a behavior change (with only 13% staying the same).
• ‍Loyal customers are far less likely to churn. Customers that are Tied are 50% more likely to churn and customers that Prefer the competition are 100% more likely to churn!

Definitions of Customer Segments

‍
Loyal Customers
Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers
Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
‍Prefer: Lower share of wallet and higher rank than other brands in their consideration set
‍Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
‍New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways

Marketers know it’s more costly to acquire or re-acquire customers than to keep existing ones engaged. When QSRs neglect current customers, they risk losing them and undoing past investment - not loyal customers are 50%-100% more likely to lapse/churn than loyal customers. But also QSRs are doing a relatively good job of bringing in new customers so staying top of mind is even more important. Marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase frequency.
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with  insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

‍* *For this report, we've selected the entire QSR category in our data, collectively representing over $44B in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
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About Cardlytics‍

Cardlytics (NASDAQ: CDLX) is a commerce media platform, powered by our publishers’ first-party purchase data, that makes commerce smarter and more rewarding for everyone. We offer a range of solutions to help advertisers and publishers, including financial institutions, grow and strengthen customer loyalty. With visibility into approximately half of all card-based transactions in the U.S. and a quarter in the U.K., Cardlytics enables advertisers to engage consumers at scale and drive incremental sales through our industry-leading financial media network. Publisher partners can enhance their platforms with relevant and personalized offers that improve the shopping experience for their customers. Cardlytics also offers identity resolution capabilities through Bridg, which helps convert anonymous shoppers into known and reachable customers. Headquartered in Atlanta, Cardlytics has offices in Menlo Park, Los Angeles, Champaign, New York and London. Learn more at www.cardlytics.com or follow us on LinkedIn.

‍Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors. We analysed billions in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

Customer behaviour isn’t fixed—shoppers move between loyalty segments over time. Our UK Grocery Loyalty Movement Report analyses national grocery spend to track these shifts, helping retailers identify churn, improve retention, and strengthen customer relationships.

Grocery Category Loyal Customers

On average, 75% of a merchant’s customers are not actually loyal. But the loyal segment (25%) has a much higher share of wallet (67%) than a not loyal segment (13%).

Top Customers (top 20% of most frequent transactors) still show that 25% are not loyal customers. Yet the loyal customer segment shows a 2x higher share of wallet.

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Findings

We looked into purchase data at all groceries in the UK over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behaviour.

Grocery Loyalty Movement

Overall, quarter over quarter, 50% of customers tend to remain in their existing segments while 50% increase or decrease their loyalty to a merchant. Yet there is much more extensive customer loyalty movement within the “not loyal” segments.

Segment Movement

While all segments show purchase behaviour movement, the Tied segment (part of Not Loyal customers) shows the most movement - both up (30%)  and down (47%) - into other segments. 

Grocery Leaky Bucket

Grocery brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 67% and 65% staying the same, respectively). Those customers that are Tied have the greatest propensity for a behaviour change, with only 9% staying the same, showing extreme volatility. ‍
• Loyal customers are far less likely to churn. Tied Customers are 56% more likely to churn (moving to Prefer or Lapsed) and customers that Prefer the competition are 200% more likely to churn!

Definitions of Customer Segments

‍
Loyal Customers
Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers
Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
‍Prefer: Lower share of wallet and higher rank than other brands in their consideration set
‍Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
‍New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways - Building Grocery Loyalty in the UK

Loyalty in the UK grocery sector is highly unstable. Only 25% of shoppers are truly loyal, yet they contribute 67% of their share of wallet (SOW) to a single merchant. Even within the top customers, 25% are still not totally loyal. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Implement an always-on engagement strategy to keep customers connected, regardless of purchase frequency. 
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics provides comprehensive Customer Loyalty Analysis, delivering insights into loyalty movement, churn risk, and retention strategies to help grocery brands drive long-term customer value. Contact us to learn more

‍* For this report, we've selected the entire Grocery category in our data, collectively representing over $200bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.‍

‍Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over competitors. We analyzed $160B in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our newest Loyalty Movement Report, we dive into customer behavior in the Grocery category to better understand engagement over time by analyzing the entire grocery category with more than $200B in consumer spend behavior.*

Grocery Category Loyal Customers

On average, 58% of a merchant’s customers are not actually  loyal. But the loyal segment has a much higher share of wallet (84%) than a not loyal segment (18%).

Top Customers (top 20% of most frequent transactors) still show that more than ⅓ are not loyal customers. Yet the loyal customer segment shows an almost 3x higher share of wallet.

Findings

We looked into purchase data at all groceries in the US over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior.

Grocery Loyalty Movement

Overall, quarter over quarter, 60% of customers tend to remain in their existing segments while 40% increase or decrease their loyalty to a merchant. Yet there is much more extensive customer loyalty movement within the “not loyal” segments.

Segment Movement

While all segments show purchase behavior movement, the Tied segment (part of Not Loyal customers) shows the most movement - both up (33%)  and down (37%) - into other segments. 

Grocery Leaky Bucket

Grocery brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 81% and 71% staying the same, respectively). Those customers that are Tied have the greatest propensity for a behavior change (with only 20% staying the same).
• Loyal customers are far less likely to churn. Customers that are Tied are 42% more likely to churn and customers that Prefer the competition are 185% more likely to churn!

Definitions of Customer Segments

‍
Loyal Customers
Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers
Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
‍Prefer: Lower share of wallet and higher rank than other brands in their consideration set
‍Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
‍New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways

Marketers know it’s more costly to acquire or re-acquire customers than to keep existing ones engaged. When brands neglect current customers, they risk losing them and undoing past investment - not loyal customers are 42%-185% more likely to lapse/churn than loyal customers. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase frequency.
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

‍* For this report, we've selected the entire Grocery category in our data, collectively representing over $200bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
‍‍

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 approximately 1 of every 2 card-based transactions in the U.S., allowing us to see 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. Learn more at www.cardlytics.com.

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At Cardlytics, we believe in making commerce more rewarding for everyone. We’ve created a unique platform where everyone benefits – our brand advertisers, our financial institution partners, and consumers – and finds meaningful value in card-linked offers and cash back rewards. 

We continue to strengthen and build on our extensive network, welcoming new financial institution partners and brand advertisers with a shared mission of bringing more value to consumers. We’re delighted to launch our newest partnership with American Express, whose proprietary owned digital advertising platform, Amex Offers, continues to transform to meet the demands of a dynamic retail environment and bring value to Amex Card Members and merchant advertisers. Together, we're working to scale the number of card-linked offers on the platform, helping more advertisers market to Amex Card Members and providing Card Members with access to more value through cash back rewards via the personalized digital experience they already know.

We look forward to ramping up our partnership in the coming months and delivering relevant and personalized offers to Amex Card Members at scale.

Big Box Retail: Stop Taking Customer Loyalty for Granted‍

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‍Introduction
‍‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over competitors. We analyzed $160B in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our Loyalty Movement Report, we dive into customer behavior in the Big Box category to better understand engagement over time by analyzing 8 brands with more than $400B in consumer spend behavior.*

Big Box Retailer Category Loyal Customers

On average, 76% of a merchant’s customers are not actually loyal. But the loyal segment has a much higher share of wallet (70%) than a not loyal segment (15%).

Top Customers (top 10% of most frequent transactors) are evenly split between loyal and not loyal customers. But the loyal customer segment shows an almost 3x higher share of wallet.

Findings

We looked into purchase data at 8 big box retailers in the US over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior.

‍Big Box Loyalty Movement

Overall, quarter over quarter, almost 80% of customers tend to remain in their existing segments while 20% increase or decrease their loyalty to a merchant. Yet there is much more extensive customer loyalty movement within the “not loyal” segments. 

Segment Movement

While all segments show purchase behavior movement, the Tied segment (part of Not Loyal customers) shows the most movement - both up (29%)  and down (36%) - into other segments. 

‍Big Box Leaky Bucket

Big Box brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 87% staying the same). Those customers that are Tied have the greatest propensity for a behavior change (with only 32% staying the same).
• Loyal customers are far less likely to churn. Customers that are Tied are 50% more likely to churn and customers that Prefer the competition are 250% more likely to churn!

Definitions of Customer Segments

‍
Loyal Customers
Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers
Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
‍Prefer: Lower share of wallet and higher rank than other brands in their consideration set
‍Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
‍New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways

Marketers know it’s more costly to acquire or re-acquire customers than to keep existing ones engaged. When brands neglect current customers, they risk losing them and undoing past investment - not loyal customers are 50%-250% more likely to lapse/churn than loyal customers. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase frequency.
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

‍* For this report, we've selected a sample of 8 of the largest merchants including a mix of online marketplaces, memberships and omni-channel retail, collectively representing over $400bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
‍‍

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 approximately 1 of every 2 card-based transactions in the U.S., allowing us to see 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. Learn more at www.cardlytics.com.

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.

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Top Customer Loyalty & Share of Wallet

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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).

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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.
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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 18^th and 21^st June 2024.