Exploring the impact of loyalty program on consumption in the Spanish beauty industry

Abstract

This research aims to explore the impact of loyalty programs on consumer behavior within the Spanish beauty industry, focusing on how different types of loyalty programs and their specific benefits influence consumer spending. Utilizing a mixed-method approach combining qualitative and quantitative data, this study provides a comprehensive analysis of consumer preferences and behaviors associated with loyalty programs. The study begins with a detailed literature review, examining existing research on loyalty programs, their structures, and their perceived benefits. The literature highlights the significance of loyalty programs in fostering repeat purchases and enhancing customer retention. Various types of loyalty programs, including point systems, tier systems, and non-monetary programs, are discussed, along with their respective utilitarian, hedonic, and symbolic benefits. The research methodology includes a survey conducted with 291 respondents, of which 187 were valid and used for analysis. Descriptive statistics and multiple regression analyses are employed to interpret the data and identify significant trends and relationships. Key findings indicate that while consumers value point and tier system loyalty programs, these do not necessarily drive higher value in consumption. Instead, non-monetary loyalty programs, which focus on exclusive experiences and personalized rewards, are more effective in increasing consumer spending. Utilitarian benefits, such as saving money through loyalty programs, are highly valued but tend to decrease the overall monetary value spent, as indicated by a negative coefficient in the model. Hedonic benefits, including discovering new products and redeeming points, show a positive correlation with consumer spending. The study also reveals that symbolic benefits, while appreciated by consumers, do not significantly drive sales or consumption. The high sentiment of program loyalty among respondents, particularly in the beauty sector, is a critical factor influencing consumption. These insights underscore the importance of designing loyalty programs that blend monetary and non-monetary rewards to cater to diverse consumer preferences. Practical implications for companies in the beauty industry include the need to develop well-rounded loyalty programs that offer a mix of point-based rewards, tiered benefits, and personalized experiences. Companies should also consider targeting higher-income consumers with premium offerings and exclusive events to enhance revenue and build a loyal customer base. Strategies aimed at increasing purchase frequency, such as regular promotions and reminders about loyalty program benefits, can also drive overall spending and foster long-term consumer habits. This study contributes to the existing literature by providing a nuanced understanding of how different loyalty program structures and benefits impact consumer behavior in the Spanish beauty industry. Future research should explore the long-term effects of loyalty programs and consider cultural differences in consumer preferences and behaviors. This research offers valuable insights for businesses looking to optimize their loyalty programs to enhance customer satisfaction and drive sustainable growth