Revival of Loyalty Program Alliances in Canadian Retail Sector Seen as Response to Economic Downturn [Interview]


Share post:

Is a trend developing in the retail sector toward the return of loyalty program alliances?

“For a while most new loyalty programs went in-house but we may be seeing a new trend. Canadian customers are hurting financially and retailers need to offer even more value that is easy to convert into savings,” said Bruce Winder, Author of RETAIL Before, During & After COVID-19 and President, Bruce Winder Retail.

Bruce Winder

Recently, it was announced that Canadians can now earn Scene+ points at Home Hardware Stores Limited’s close to 1,100 locations across Canada and at using their Scene+ Loyalty Card and the Scotiabank® Scene+ Visa* Card.

Also, AIR MILES announced the first of several program enhancements including a new partnership with leading Canadian value retailer, Dollarama. 

Dollarama (Image: Barrhaven BIA)

“This piqued my interest. If you go back to the loyalty space about 20 years ago, even 15 years ago, a lot of programs were sort of tied with a coalition, like a network. AIR MILES and things like that,” said Winder. “Then there was a trend where companies started to kind of create their own programs so that they could harvest the data directly and control the relationship with the customer.

“But I’ve seen recently two data points where maybe we’re starting to see a bit of a rebirth and a re-linkage of coalitions.

“I read somewhere that Canadians on average like 16 loyalty programs they’re involved in. And I also read somewhere where they’re sitting on $15 or $16 billion worth of points that they’re not using.”

Because of the tough economic times and the fact that consumers may be holding back on spending, retailers are wondering how they can add value for a consumer who is really stretched.

“I’m wondering if companies are starting to see the benefit again of partnering with larger programs that offer multiple retailers so that they can earn easier and quicker and then burn off the points easier and quicker to kind of keep them in that loyalty cycle,” said Winder.

LEFT TO RIGHT: Clinton Braganza (SVP Customer Loyalty & Partnerships, Scotiabank), Kevin Macnab (President & CEO, Home Hardware Stores Limited), Tracey Pearce (President, Scene+). (CNW Group/Home Hardware Stores Limited)

Winder said 60 per cent of consumers will change where they shop to try to maximize points. 

“It actually works. It changes consumer behaviour,” he said. “Especially now because I think consumers are tuned in to look at savings right now. I’m sure there’s a lot of consumers out there who probably won’t buy much unless it’s on sale right now. Or there’s some sort of deal.

“Loyalty works. It’s better to use loyalty than just drop your prices. So instead of saying okay let’s drive some traffic, let’s drop our prices 10 per cent this week, that’s a very expensive way to draw traffic and to draw a conversion. It’s cheaper and has more stickiness to use a loyalty program instead.

“It’s less expensive and it’s actually more engaging and it has more of a long-term impact. In other words, the customer will keep coming up. What if you drop your prices 10 per cent this week and then your competitor drops 10 per cent next week, well the consumer has no problem jumping back and forth to retailers. But if you offer value in a loyalty program the way that they get the value is by continuing to shop at your store. So you kind of keep them captive within at least the network. It’s a smarter approach in an economic downturn instead of just relying on price. Relying on loyalty is cheaper and smarter to drive people in your stores and keep them in your stores.”

Winder said one of the reasons behind all the unused loyalty points is that consumers have signed up to a lot of independent one store programs. The points just sit there.

“If you have consumers that are sitting on a pile of points and not using them, that means your loyalty program is broken,” he said. “Because what you want to do is you want to have consumers every week or every month earning points and burning points, earning points and burning points. 

“And if you stop the burning side, in other words the usage, then you’re going to stop earning. It might also be an indication too that the rewards you’re offering aren’t very appetizing. They’re hard to claim or you need an enormous amount of points to claim them or they’re rewards that people just don’t want. So it’s a bit of a telltale that your rewards program is broken when you’re sitting on too many points.”

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training.


Please enter your comment!
Please enter your name here

More From The Author



Subscribe to the Newsletter


* indicates required

Related articles

Enhancing Retail Environments: A Contemporary Feng Shui Consultant’s Insights on Design, Colour, and Visitor Experience [Podcast]

Craig and Mark Ainley discuss the profound impact of Feng Shui and flow on retail spaces. Mark highlights how subtle cues, from sharp angles to vibrant colours, influence consumer behaviour, emphasizing the importance of creating an authentic and inviting retail atmosphere.

Top Shopping Centres in Canada Evolving Experiential Elements to Grow Foot Traffic and Tenant Revenue [Interview]

JLL’s Senior Marketing Director, Property Management, discusses how creating unique experiences tailored to local markets helps drive overall asset value through increased footfall and productivity.

Mastermind Toys Acquired by Joe Mimran’s Unity Acquisitions, 18 Stores to Close 

Unity will acquire the majority of Mastermind Toys store locations following a bankruptcy filing, with a significant number of employees continuing with the business.

Active Gaming Facility ‘Activate’ Plans Rapid Cross-Canada Expansion with New Leases [Interview]

The company, known for its unique competitive socializing concept, aims to open multiple locations in Canada while also planning a global expansion.

Alo Yoga Entering Quebec Market Amid Ongoing Canadian Store Expansion

The US-based athleisure brand, similar to Lululemon, has launched a multi-store-per-city strategy in Canada as it enters the Belle Provence. 

From ‘Greedflation’ to Government Scrutiny: A Rollercoaster Year for Canada’s Grocery Industry [Op-Ed]

Sylvain Charlebois discusses how over the past year the Canadian grocery industry has faced unprecedented political scrutiny and intervention, while also saying there's potential for a re-emergence of unethical schemes.

West Edmonton Mall Continues to Expand Luxury Retail with Addition of Moncler; Tiffany Marks 10 Years

Italian luxury brand Moncler is the latest to join the massive shopping centre with retailers such as Louis Vuitton, Balenciaga and Gucci. The mall’s first luxury store, Tiffany & Co. is also marking 10 years. 

Canadian Consumers to Prioritize Brick-and-Mortar Retail into December [Report/Interview]

Electronics are among the top gifts, with moderate growth in the restaurant and grocery sectors expected while also noting a controlled promotional approach due to slowing inflation.

Salesforce’s Rob Garf Discusses Canadian Retailers’ Strategies Amidst Q3 E-commerce Slowdown [Report/Interview]

Garf discusses a report showing a 9% decline in Canadian e-commerce growth, indicating a consumer expectation for discounts in the upcoming months. He discusses a consumer shift and how retailers can address it.

Early Signs Point to a Strong Holiday Shopping Season in Canada Despite Economic Challenges

Reports indicate that last Saturday and Sunday saw the biggest surge in consumer spending so far, with predictions made as we head into December.

Specsavers Set to Reach 100 Canadian Locations in Early 2024, Expanding into New Markets [Interviews]

The eyewear retailer, which entered Canada in 2021, is rapidly expanding and looking to gain market share from established players.

Burton Snowboards Transforms Toronto Flagship for [ak] Collection as Brand Looks to Expand [Interview/Photos]

The high-performance AK collection is a new focus, with Burton planning to grow its retail presence in Canada with more stores in key markets.