As the economy grows tighter, corporations and brands may find new opportunities to appeal to customers with more robust reward programs and special promotions.
- The cost of living is increasing as inflation continues to increase, and the economy tightens.
- Rewards programs offer a useful solution for companies eager to compete in a tight market, The Future Party reports.
- With 90% of customers already owning at least one loyalty card, rewards points, and special offers can create incentives for customers to spend more and save money, benefiting both customers and corporations.
Why It’s Important
As we previously reported, post-pandemic spending has been high, as consumers eagerly returned to normal life, took vacations, and spent excess income to enjoy more mobile and social life. That spending spree has decreased slightly in recent months after a brief spending increase during the holiday season through January. Younger groups—namely millennials and zoomers—are spending higher amounts.
The Federal Reserve’s ongoing interest rate hikes are expected to have a serious impact on the economy later this year. As Fed Chair Jerome Powell has acknowledged, the nine consecutive interest rate hikes in the past 13 months are necessary to restore price stability and to avoid a “far greater pain.” This comes at the risk of high unemployment and an artificial recession.
A downturn does not have to mean businesses lose out on opportunities for revenue, Future Party notes. 63% of shoppers want more value for their purchases, and rewards programs can also offer other revenue opportunities. including selling first-party data and partnering with other businesses.
Starbucks did this in 2022 by partnering with Delta Airlines and offering one airline mile for every $1 spent at the store with a rewards card. Building strong connections to customers with deals can increase customer retention.