First some shoppers who spend
It is not that loyalty systems increase the amount of promotional activities in the retail industries it is redirecting these promotions coupons vouchers etc. toward more effective and efficient uses. Unintended Consequences Since loyalty systems are beneficial for suppliers retailers and shoppers these systems should help improve the retailer s image but a number of unintended consequences can overshadow these positive effects for the retailer. First loyalty programs can negatively influence the consumer s price perception of retailers.This conclusion directly follows from the arguments presented above in that retailers are able to charge higher posted prices due to reduced price competition. However a negative price image is again a myth because it does not distinguish between highly valued loyal consumers and less valued switchers. While the price image may suffer in eyes of the switchers many Chinese Overseas America Number Data will still patronize stores for reasons other than price. On the other hand the most loyal consumers have a price perception that is significantly affected by the nature and value of the targeted offers they receive in exchange for their business and therefore have a much more favorable price image relative to the competition.
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Loyalty programs end up creating different realities for the most loyal and less loyal shoppers emphasizing the different reasons for why customers shop at a particular store. Some unintended consequences are not a myth retailers need to consider these when they apply loyalty systems. less like older and lower income consumers may feel they are getting a rough deal. Individually differentiated prices tend to favor higher spending loyal shoppers. Less favored shoppers might create negative influences against the retail chain s image especially if their story with issues of discrimination is taken up by the media or regulators.
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