Canada and Australia Loyalty

Part
01
of seven
Part
01

Canada Loyalty Programs Per Household

A recent study showed that Canadian household belongs to an average of 13.3 loyalty programs. Also, it was found that the average number of loyalty membership was 12.2. The required information has been updated in row 3, columns E-F of the attached spreadsheet.

Loyalty programs each household in Canada belongs to, on average

  • The total number of different loyalty programs each household in Canada belongs to, on average is 13.3, which is a 35% increase from the number recorded in 2015.
  • This is about 175 million membership nationwide.
  • It was also found that the total number of loyalty programs which an individual belong to in Canada is about 12.2.

How many loyalty programs do they actively participate

  • Although Canadians belong to several loyalty programs, they are not active in all the programs. Opening a program account does not necessarily translate to being actively involved in the program.
  • The report of a study showed that Canadians are actively involved in about 7.3 loyalty program, though they may belong long more.

Research strategy

To address the request, we searched through media publications, news articles, and relevant websites for information on the total number of different loyalty programs each household in Canada belongs to, on average and the number of loyalty programs which they actively participate. We were able to locate information on the average number of loyalty programs membership per household in Canada, however, we did not find the number of programs which were actively used/or participated. We searched further for the missing information on third-party research websites, but what we were able to find was information on the number of actively participated loyalty programs per person. During our searches, we found some top loyalty programs which Canadians participate in. Hence, we decided to check publications or press releases by the companies that offer such programs to know if they published such information, but we were unable to find such data. We tried to look for ways to triangulate the household figure using the per person data, but this could not hold. Hence, we have presented the number of active loyalty programs per person as a proxy to that of the household.

Part
02
of seven
Part
02

Australia Loyalty Programs Per Household

Each household in Australia belongs to 14.64 different loyalty programs. The households actively participate in 4 loyalty programs with the retailers, financial institutions, airlines and restaurants. Findings have been entered into row 3, column G-H of the attached spreadsheet.

Overview

  • According to research by MasterCard, Australians love loyalty programs as statistics reveal that 9 out of 10 persons in the country are involved in loyalty programs.
  • A survey report dubbed ‘Achieving Advocacy and Influence in a Changing Loyalty Landscape’ that involved 7,000 participants sampled from the Asia Pacific region (APAC) revealed that Australians have the most involved in Loyalty Programs.
  • The report also found that an Average Australian individual is involved in 6.1 loyalty programs.

Household Size in Australia.

  • According to 2018 statistics, the national average household size in Australia is 2.4. The figure is calculated by dividing the total household population by the total number of households in Australia.

Loyalty Programs That Australians Participate in

  • Australians participate in loyalty programs across various sectors including financial institutions, restaurants, airlines, retailers hotels, entertainment and vehicle hire. The percentage participation by industry is as follows;
-Retailers 79%
-Airlines 50%
-Financial Institutions 43%
-Restaurants 28%
-Hotels 18%
-Entertainment 17%
-Vehicle Hire 4%
  • Deriving from the percentage participation above, Australians actively participate in 4 loyalty programs with retailers, airlines, financial institutions and restaurants respectively.
  • Some of the most popular loyalty programs in Australia include; Flybuys, Woolworths Rewards, Myer one, Priceline Sister Club, Spotlight VIP Club, Velocity Frequent Flyer, My Dan Murphy’s, Ikea Family and Cinebuzz Rewards

YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGIES:

In finding the number of loyalty programs per household in Australia, we began by searching for precompiled information on the same. We consulted government databases, industry surveys and market reports on but did not find any precompiled information specific to the request. While we found information on the participation of Australians in loyalty programs in general, none of the sources had a breakdown of participation per household. We, therefore, sought to find different data points and used the same to triangulate the requested information. In our triangulation, we made certain assumptions
CALCULATION

Given;
The number of persons per household = 2.4
The average number of loyalty programs per person = 6.1
Therefore,
The Number of Loyalty Programs per Household =
(The number of persons per household X The average number of loyalty programs per person)
= (2.4 X 6.1)
= 14.64
Hence, The Number of Loyalty Programs per Household = 14.64

ASSUMPTIONS
  • In our calculation, we assumed that households cannot have duplicate loyalty programs. That is, it is uncommon to find individuals from the same household involved in the same loyalty programs. As such, individuals in a household participate in different loyalty programs to broaden their alternatives and increase their chances of benefiting from multiple programs.
  • We also assumed that active participation is participation that accounts for over 25%. Therefore, we use the same to determine that 25% of Australians participate in each of the loyalty programs with financial institutions, restaurants, airlines and retailers and hence active participation in 4 programs. In line with the same, we also assumed that they participate in one loyalty program per sector (for example, one loyalty program for the retail industry and so on.)

Part
03
of seven
Part
03

Loyalty Coalitions

Qantas has more active members compared to Aeroplan and Air Miles. Qantas has approximately 12 million members and issued 120 billion points in 2016. Information regarding Qantas, Aeroplan, and Air Miles can be found in the following spreadsheet.

summary

research strategy

While we found some information in this request, we were unable to find data regarding the total points issued or total amount earned by customers in 2017 and 2018 for Aeroplan, Air Miles, and Qantas. We first looked through fact sheets and reports on the websites of the three companies, media platforms such as CBC, and industry sites like Flightfox but did not find relevant information. The information we found focused on ways of maximizing the loyalty programs and company acquisitions. However, we found information on Aeroplan’s website, which revealed that 2.7 and 2.8 million rewards were issued in 2017 and 2018 respectively. Since these were rewards and not points, we did not include the information in the spreadsheet.

Our next strategy was to expand the scope to find if there was information regarding total points issued or total amount earned by customers using sources that were more than two years old. We looked through industry and media sites, such as Australian Financial Review, Forbes, and One Mile at a Time but to no avail. The information provided in these websites focused on the best ways of utilizing loyalty programs. It is noteworthy that we found an article on Australian Financial Review, which revealed that Qantas had issued approximately 120 billion points in 2016.

Since we could not find the required information, we attempted to find other data points for triangulation. Because we were unable to find the total number earned by customers or the total points issued, we tried to look for the total miles covered by customers from Aeroplan, Air Miles, and Qantas respectively for 2017 and 2018. Our objective after establishing the total distance covered was to find the value of miles in dollars, which would enable us to calculate the total amount earned by customers. We looked at company websites and industry sites, such as Simple Flying and Airline Ratings but these websites focused on promotional content for the three companies. We attempted to look at media platforms such as the Toronto Star, Fortune, and Vancouver Sun but found no useful information. The sources focused on the loyalty programs market and competition in the travel loyalty programs sector. Therefore, we made the assumption that the information was not available in the public domain. Aeroplan and Air Miles are Canadian companies while Qantas is Australian. Therefore, we also made the assumption that the customer data used for Aeroplan and Air Miles focuses on Canada while that for Qantas on Australia. Furthermore, the websites of the three companies reveal that the loyalty programs are Canadian and Australian respectively.

Part
04
of seven
Part
04

Amazon Prime Penetration: Canada

The estimated number of Amazon Prime members in Canada is 5.7 million. 21% of online consumers in Canada have an Amazon Prime membership. The requested information has been entered into the attached spreadsheet.

Amazon prime Canadian penetration

RESEARCH STRATEGY

The 2018 Canadian E-commerce Monitor states that 21% of Canadians that shop online are Amazon Prime members. Angus Reid's research on online shopping in Canada found that only 7% of Canadians have never shopped online, therefore 93% of Canadians shop online. We next consulted the Government of Canada's official statistics website to find the Canadian population, which in 2018 was 37,058,856, however as Prime members must be over the age of 18 we have excluded anyone under that age.

28,979,230 * 93% = 26,950,683 Canadians shop online.

26,950,683 * 21% = 5,659,643 Canadians are Amazon Prime members.
Part
05
of seven
Part
05

Amazon Prime Penetration: Australia

Since Amazon Prime was just introduced to Australia in June 2018, the number of members in this country or any other comparable data has not been released by the company yet. Nonetheless, relevant information on Amazon Prime's service in Australia has been provided in the attached spreadsheet.

AMAZON PRIME IN AUSTRALIA

  • Amazon Prime only rolled out its membership service to Australia in June 2018.
  • In Australia, Amazon Prime members have access to 60 million products which is less than the 500 million products that Americans have access to.
  • Amazon Prime memberships cost $59 a year in Australia compared to $119 a year in the United States, $141 in Britain, $77 in Germany, and $80 in Canada.
  • The two-day delivery that Amazon Prime promises is only available to 90% of Australians located in metropolitan cities such as Adelaide, Melbourne, Brisbane, and Sydney.
  • Customers in remote locations in Australia receive their purchases in three to five days.
  • There are 12.2 million e-commerce users in Australia which is 59.79% of the country's total population.

AMAZON IN AUSTRALIA

  • Amazon only introduced its retail service to Australia in December 2017.
  • Following its release in Australia, Amazon's website (including .com and .com.au) was visited by 6.9 million Australians.
  • On Amazon Prime Day in 2018, 3.2 million Australians visited Amazon's website.

RESEARCH STRATEGY:

We were unable to find or estimate the number of Australian members, the number of prime households, or any other comparable data point for Amazon Prime Australia. We also could not provide any other data points to describe the typical Australian Prime member. This is because Amazon Prime Australia launched its service to Australia in June 2018. This created a setback in finding the requested information because there is no publicly available data on the penetration of Amazon Prime in Australia yet.
We commenced our research by searching for the exact number of Amazon Prime members in Australia. We examined business and retail platforms like Business Insider, Forbes, and Digital Commerce. While the articles published by these websites provided qualitative information on Amazon Prime in Australia, there were no specific statistics provided on members. Next, we reviewed blogs and websites based in Australia including The Conversation AU and SBS. Still, these platforms did not reveal any information on Amazon Prime's penetration in Australia measured either by the number of Australian members or the number of prime households. However, they did mention that Amazon Prime launched in Australia in 2018. Armed with this information, we took a bullish approach and looked for Amazon's 2018 annual report or SEC filings. This strategy fell short because Amazon has not released its 2018 annual report yet (its 2018 annual report will be published on the 25th of April, 2019). The company's 2018 quarterly reports were also inspected but there was only an acknowledgment of its Prime service being introduced to Australia in these quarterly reports. We tried to triangulate the information by looking for data on the global number of Amazon Prime members. Our intention was to find Australia's share of this service. While it was mentioned that Amazon Prime has more than 100 million members and half of these members are international, there was no share provided for Australia. Countries in Europe like the UK and Germany were said to have the most Amazon Prime members. Moreover, the 100 million members provided was from Amazon's 2017 annual report. Since Amazon Prime was introduced to Australia in 2018, this number might have increased. Having exhausted all attempts made to provide exact statistics to answer the question, we broadened our search to include important facts about the Amazon Prime service in Australia. Searching the same websites as before, we found useful information on Amazon Prime in Australia.


Part
06
of seven
Part
06

Credit vs. Deb Transactions: Canada

The credit card transaction volume for Canada is estimated at 5.194 billion in 2018 and 6.2 billion for debit cards while in 2017, the number of credit card transaction was 4.994 billion and 5.794 billion for debit cards in Canada. Our findings have been presented on the attached spreadsheet row 7.

Transaction volume

  • In 2017, 4.994 billion transactions were made via credit card in Canada.
  • In 2017, 5.794 billion transactions were made via debit card in Canada.
  • The volume of credit card transactions is expected to grow at a CAGR of 4% over the next year.
  • The volume of debit card transactions is expected to grow at a CAGR of 7% over the next year.
In order to determine the transaction volume of credit & debit cards for 2018, we applied the calculation below:

calculation

Credit card

  • Transaction volume for 2017 * 1 year CAGR
  • 4,994,000,000 * 0.04 = 199760000
  • 2018 credit card transaction volume = 4,994,000,000 + 199,760,000 = 5,193,760,000 ~ 5.194 billion
  • Therefore, the 2018 credit card transaction volume in Canada is 5.194 billion.

Debit card

  • Transaction volume for 2017 * 1 year CAGR
  • 5,794,000,000 * 0.07 = 405,580,000
  • 2018 debit card transaction volume = 5,794,000,000 + 405,580,000 = 6,199,580,000 ~ 6.2 billion
  • Therefore in 2018, the debit card transaction volume in Canada is 6.2 billion.

research methodology

In order to find the credit & debit card transaction volume for Canada for 2017 and 2018, we began our research by looking for industry reports from reputable sources such as Deloitte, Bain, Accenture, PwC, Tsys and Canadian government sites. On course of our research, we were able to find the latest publication by Payments Canada; which is the agency responsible for the clearing and settlement infrastructure, processes and rules essential to transactions in Canada. The latest report provided by the agency was a breakdown of transactions and trends by various payment methods in Canada for 2017.

Using the information provided in the latest report, we were able to calculate the credit & debit cards transaction volumes for 2018 by using the forecasted CAGR for both payment methods for the next year (2018) and the 2017 transaction volume for both payment methods.
Part
07
of seven
Part
07

Credit vs. Deb Transactions: Australia

In Australia, the number of credit and debit card transactions was 2.540 billion and 5.554 billion respectively in 2017. The number of credit and debit cards transactions was 2.718 billion and 6.332 billion respectively in 2018. Our findings have been presented in the attached spreadsheet.

Australia's credit & debit cards transaction volume

  • The number of credit cards transactions was 2.540 billion in Australia in 2017.
  • In Australia, the number of debit cards transactions was 5.554 billion in 2017.
  • In 2018, the number of credit cards transactions in Australia was 2.718 billion.
  • The number of Debit card transactions was 6.332 billion in 2018

Findings

  • The number of non-cash transactions in Australia in 2016 was 10.9 billion.
  • Credit cards represented 22.4% of the total non-cash payments in 2016.
  • Debit cards represented 44.7% of the total non-cash payments in 2016.
  • The number of credit cards transactions maintained a steady growth of 7% in the last decade in Australia.
  • The number of debit cards transactions maintained a steady growth of 14% in the last decade in Australia.

Calculation

Credit Card

  • The number of credit card transactions represents 22.4% (0.224) of the total number of non-cash payments in Australia in 2016.
  • Credit card CAGR = 7% (0.07)
2016
To get the number of credit card transactions in 2016, we multiply the number of non-cash transactions by the credit cards percentage of non-cash transactions.
  • Number of credit card transactions for 2016 = 0.224 * 10,600,000,000 = 2,374,400,000
2017
  • Using the reverse CAGR formular = (CAGR * number of credit card transactions in 2016) + number of credit card transactions in 2016
  • 0.07 * 2,374,400,000 = 166,208,000
  • 2,374,400,000 + 166,208,000 = 2,540,608,000
  • Number of credit card transactions in 2017 = 2.540 billion
2018
  • Using the reverse CAGR formular = (CAGR * number of credit card transactions in 2017) + number of credit card transactions in 2017
  • 0.07 * 2,540,608,000 = 177,842,560
  • 2,540,608,000 + 177,842,560 = 2,718,450,560
  • Number of credit cards transactions in 2018 = 2.718 billion

Debit Card

  • The number of debit card transactions represents 44.7% (0.447) of the total non-payments transactions in 2016
  • Debit CAGR = 14% (0.14)
2016
To get the number of debit card transactions in 2016, we multiply the number of non-cash transactions by the debit cards percentage of non-cash transactions.
  • Number of debit card transactions for 2016 = 0.447 * 10,900,000,000 = 4,872,300,000
2017
  • Using the reverse CAGR formular = (CAGR * number of debit card transactions in 2016) + number of debit card transactions in 2016
  • (0.14 * 4,872,300,000) + 4,872,300,000 = 5,554,422,000
  • Total number of debit card transactions in 2017 = 5.554 billion
2018
  • Using the reverse CAGR formular = (CAGR * number of debit card transactions in 2018) + number of debit card transactions in 2018
  • (0.14 * 5,554,422,000) + 5,554,422,000 = 6,332,041,080
  • Total number of debit card transactions in 2018 = 6.332 billion

research methodology

In order to find the credit & debit card transaction volume for Australia in 2017 and 2018, we began our research by looking for industry reports from reputable sources such as Deloitte, Bain, Accenture, IBISWorld Australia, PwC, Tsys and the Australian government sites. On the course of our research, we were able to find the latest publication by the Reserve Bank of Australia. The latest report provided by the organization was a breakdown of transactions and trends by various payment methods in Australia for 2017.

Next, we conducted a search for the number of non-cash transactions in Australia for 2017 and 2018. Unfortunately, there was no report on the exact number of transactions for years as the latest report by the World Payment Reports was published in 2018. In, the report the latest data available was the non-cash transaction volume for 2016 and a further search to find reports on 2017 and 2018 didn't prove productive.

From the information in the reports from the Reserve Bank of Australia and the World Payment Report, we were able to triangulate the number of credit and debit cards transactions in Australia in 2017 and 2018.

Firstly, we had to calculate the number of credit and debit cards transactions for 2016 in Australia. From the 2016 report by the Reserve Bank of Australia, it was stated that credit and debit cards represented 22.4% and 44.7% respectively of the total non-cash transactions in Australia and this was used in calculating for the total number of credit and debit cards transactions by multiplying the total non-cash transactions by the percentages of the credit and debit cards.

The reverse CAGR formula was then used in calculating for the 2017 and 2018 credit and debit cards transaction volume. It was stated in the 2017 report by the Reserve Bank of Australia that, credit card transactions have maintained an annual growth of 7% for the last decade and debit card has maintained an annual growth of 14% for the last decade.

The steps taken to arrive at the number of transactions for 2016, 2017 and 2018 are detailed in the methodology section of our research.
Sources
Sources