PYMNTS Data Brief: 140 Million People Want Local SMB Rewards Run By Big Loyalty

In any crisis, a sense of community infuses human emotion and behavior. It’s exactly the effect we’re seeing, but with a twist. New data reveals that over half of U.S. consumers — 139 million people — “want to be rewarded for shopping local, but they do not trust these businesses with their data,” but only 8 percent trust neighborhood shops to hold or manage loyalty data.

This extract from Making Loyalty Work for Small Businesses: United States Edition, a PYMNTS and Pollinate collaboration, analyzes the responses of nearly 1,250 U.S. consumers from an expansive study of over 4,500 consumers in Australia, Brazil, the U.K. and the U.S., illuminating the impulse to shop local, expected rewards and ideas about who should run the backend.

It’s got a lot to do with the civic-mindedness mentioned, and takes a number of forms.

Per Making Loyalty Work for Small Businesses U.S., “Many are eager to purchase from small shops because they believe doing so can help support local children’s and school programs, which might include extracurricular clubs, athletics and other activities,” with 27 percent and 26 percent of U.S. consumers, respectively, citing these as reasons for shopping Main Street USA.

Perspectives change when consumers think about who should be operating local loyalty on the processing side, where sensitive data comes into play. Consumers grasp those complexities.

Because they do, “PayPal and card networks are also among U.S. consumers’ most trusted entities when it comes to managing personal data,” per the U.S. report, with 29 percent trusting PayPal and 40 percent either Mastercard, American Express, Discover or Visa. Calling it “a safe bet for small businesses to partner with third parties that consumers already use to transact and already trust with their data,” the U.S. edition also finds that “the degree to which consumers trust these entities [also] depends on their generational backgrounds.”

That adds up, as researchers found a strong correlation between the intention to use local loyalty programs with already using rewards elsewhere — and being convinced of their value.

Per the study, “Interest in using small businesses’ loyalty programs is even higher among consumers who already use at least one loyalty program from a retailer with which they shop regularly, with 67 percent of U.S. consumers who already use one such program expressing “very” or “extremely” strong interest in signing up for programs offered by local SMBs.