The Australian Competition and Consumer Commission (ACCC) has prioritised competition and consumer issues arising from customer loyalty schemes in Australia as a focus area in 2019, and has commissioned Loyalty & Reward Co to conduct research and produce a report focusing on the major customer loyalty schemes and how they operate. This is the first time a comprehensive and publicly available report on the loyalty industry in Australia has been compiled.

Loyalty schemes are structured membership programs which reward repeat purchases. Loyalty schemes have been prevalent in Australia for several decades and permeate virtually every industry, with most consumer companies offering a loyalty scheme to their customers. Research shows that almost 80 per cent of Australians are members of at least one loyalty scheme.

This report places specific emphasis on the four major coalition loyalty schemes operating in Australia – Qantas Frequent Flyer, Woolworths Rewards, Velocity Frequent Flyer and flybuys – but also focuses on other customer facing loyalty schemes with a membership greater than 1 million active members. This is due to the size and scale of these loyalty schemes in terms of membership numbers and third-party partnerships, as well as the influence they have over many Australian consumers.

This report focuses on points-based loyalty scheme designs and member benefits loyalty scheme designs, and their application within the Australian market. It identifies the different ways in which consumer companies leverage their loyalty schemes to drive member engagement, customer growth and retention, and build out their marketing databases.

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