Retail membership programs have become a staple in fostering customer loyalty, providing added value that resonates with a wide range of consumers. In recent years, programs offered by retailers like Costco, Sam’s Club, Walmart+, and Target Circle have experienced immense growth. These programs thrive by delivering practical benefits that align closely with customers’ daily lives, such as free shipping, exclusive discounts, and savings on fuel. Yet, amid this growing trend, many retailers overlook a powerful tool that can enhance member engagement: car rentals.

The potential for car rental integration within retail loyalty programs is significant. According to a CarTrawler report titled “Driving Loyalty: Market Insights on Car Rentals & Reward Programs,” around 60 million Americans participate in loyalty programs that also encompass car rentals. Remarkably, of the individuals who rented cars in the previous year, 66% did so at least twice, spending an average of $404 per rental. This highlights a lucrative market that loyalty and membership programs have yet to fully capitalize on, as only 12% of those renting cars did so through a loyalty program.

Considering the projected spending on car rentals in the U.S. will reach $44.7 billion by 2028, it is an opportune moment for membership programs to step in and claim this market. The CarTrawler report estimates that integrating car rentals into loyalty programs represents a $20 billion opportunity. However, merely offering car rentals is not enough. Retailers need to provide value through high-quality rental options that meet their customers’ practical needs.

Interestingly, car rentals are not just for travelers. A substantial 24% of car rentals are sought for everyday tasks, such as moving, visiting family, or taking short trips. As a result, it’s crucial to recognize that most of these rentals are initiated at local rental branches rather than at airports, revealing a consistent demand for convenient rental options. Membership programs offering such benefits can engage consumers year-round, even when they are not actively shopping for retail products.

Everyday renters typically seek the best value, with 54% of them prioritizing “lowest prices” when selecting a rental car. In contrast, only 47% of travelers prioritize this factor. Additionally, everyday renters are less inclined to use online travel agencies (OTAs) for their bookings, positioning retail membership programs as attractive alternatives that can provide significant savings.

The closed user group dynamic of retail membership programs presents unique advantages. Limited access benefits mean members can be offered exclusive discounts, rewards, or cashback deals directly sourced from car rental suppliers. Retailers like BJ’s and Sam’s Club have successfully implemented this strategy, promoting discounts of up to 35% to their members. This adds clear value for consumers who need to rent a car, as such discounted rates are not readily available via OTAs.

To successfully integrate car rentals into retail membership programs, it is imperative to ensure a high-quality experience for the consumer. Practical steps include streamlining the search process, providing competitive pricing, and maintaining excellent customer service before and after the rental. Member satisfaction directly correlates with likelihood to revisit the program for future rentals, fostering ongoing engagement.

Personalization is a key strategy for improving member experience. Data analysis can reveal valuable insights — for instance, younger renters show a higher preference for electric vehicles (EVs). Retail membership programs can leverage this information to promote EV options to the appropriate demographic while catering to the preferences of older members with traditional vehicles.

Flexible payment options also enhance the member experience. Notably, 63% of loyalty program participants prefer to use a mix of cash and points for redemptions. Offering varied payment methods allows members to maximize their loyalty points while making their rentals more accessible.

In conclusion, the integration of car rentals into retail loyalty programs presents a unique opportunity to cultivate engagement and provide everyday value. By tapping into this lucrative market, retailers can keep their brands at the forefront of consumers’ minds, encouraging ongoing participation in membership programs. Through personalization, competitive pricing, and high-quality experiences, retailers can leverage the powerful combination of car rentals and loyalty programs to drive year-round engagement.