Loyalty schemes for the grocery sector will remain relevant as long as they focus on what customers really care about. Because put simply, points and prizes don’t drive loyalty, experiences do.
Technology has enabled people to shop more on their terms than ever before, increasing demand for retailers to offer a consistent omni-channel experience. Whether shopping online, clicking and collecting, or turning up in-store, customers increasingly expect an experience that meets and exceeds their needs.
It isn’t enough to offer them discounts anymore; people have learned how to play the system and rather than driving loyalty, promotions actively encourage people to shop around.
To drive frequency – which after all, is what loyalty really is in this sector - supermarkets need to offer something customers simply can’t get elsewhere; which is why we’re now seeing a new wave of loyalty propositions emerging.
Waitrose have just launched Pick Your Own, a new proposition for their myWaitrose Customers that allows the customer to choose which 10 items they would like to receive 20% off of; in a branch or in store. M&S are currently piloting ‘Sparks’ – a card based scheme based on personalised benefits rather than points. And infamously Morrisons launched Match & More last year; prompting Lidl to counter with a campaign highlighting how complicated it was for Morrisons customers to sign up to the scheme.
It’s not rocket science but Morrisons Match & More is evidence that not every brand gets it right first time. Perhaps more of a knee-jerk reaction to their brand’s failing market position rather than a long-term strategic plan they’ve invested in.
And that’s the real trick to remaining relevant when it comes to loyalty. It isn’t about a ‘scheme’. It’s about behaviour.
All too often loyalty propositions are an add-on, removed from the main function of the business. Instead it should be viewed from the outset as an inherent part of a brand’s customer strategy, grounded in insight and set up to deliver an ongoing experience that innovates around customer need.
That’s where Tesco Clubcard lost its way. It became about the points and forgot about the data, which was where the key to building a meaningful customer experience lay.
Accordfing to Mark Price, Chief Executive, Waitrose, ‘this <Pick Your Own> is about making sure our customers are really well looked after’... and that’s what makes new propositions like this so interesting.
It proves that Supermarket loyalty isn’t a destination. It’s an ongoing journey that requires investment and the occasional leap of faith.
By Liz Barnsdale, Managing Director at ais London.
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