Are the days of loyalty cards numbered after Tesco’s change?

Are the days of loyalty cards numbered after Tesco’s change?

Some of you may know that Tesco recently made cuts to it’s Clubcard rewards, causing quite a controversy!

Customers, some who had saved their loyalty vouchers for as long as 23 years (when the programme was first introduced in 1995) were not happy and didn’t hold back on expressing their outrage.

This backlash showed that shoppers still care about their loyalty rewards. However, the concept of swiping a card at the till is becoming outdated, shoppers are looking for something far more efficient!

At White Label Loyalty we offer a mobile first approach, so customers can have all their loyalty in one place, on the phones. This unlocks the potential to instantly reward customers at the right time when they are in store rather than sending vouchers to the customers weeks later.

We also believe that the key to a successful loyalty programme is to make the user journey frictionless. We have have recently launched a Card-linked loyalty solution which does just that as it  enables customers to collect points automatically when they pay using their bank cards. No more forgetting cards or scanning barcodes, the future of loyalty is here!

Find out more by contacting our Team of experts.

As soon as Tesco said it was cutting some of its Clubcard rewards, customers started venting their anger.

“Kick people while they’re down,” said one. Another called it a “blow” after saving up the vouchers for two years.

The supermarket has now backtracked and delayed the cut until the summer.

But experts believe the move is part of a wider trend, and said the days of shoppers using plastic loyalty cards and collecting supermarket reward vouchers are numbered.

“This concept of swiping a card at the till is dated. It’s not what attracts us to a supermarket,” says retail analyst Natalie Berg of Planet Retail.

It is no coincidence that Aldi and Lidl, the UK’s two fastest-growing supermarket chains, do not have loyalty cards.

“Shoppers are no longer monogamous. The idea of being loyal to a particular supermarket is a thing of the past,” she says.

With the weekly, out-of-town shop in decline, and supermarkets facing intense pressure on prices and online deliveries, it is no surprise that loyalty cards are less of a priority, Ms Berg says.

However, the backlash over Tesco’s move showed shoppers still cared about loyalty rewards.

“It’s the final stages of loyalty cards, but not of loyalty schemes,” says Martin Lewis, founder of the Money Saving Expert website, who led the campaign against Tesco’s sudden Clubcard changes.

“The idea that it’s a piece of plastic, and that you get points back and vouchers, is going to go.”

He knows of shoppers that have keyrings containing more than 40 loyalty cards. Those will increasingly become a thing of the past as they are replaced with technology that still offers discounts, Mr Lewis says.

There is at least one smartphone app, Stocard, that lets users upload all their loyalty cards into one place.

And the salad chain, Vital Ingredient, dropped its customer card in favour of an app that enables payments and gives reward points.

‘Disenfranchised’

As our shopping habits change, so too do our expectations for loyalty schemes.

UK shoppers have about three loyalty cards on average, but only use two of them, according to retail analysts TCC Global.

And there are signs that customers are becoming “disenfranchised” with the rewards on offer, says TCC’s Bryan Roberts.

Just 5% of shoppers would stop going to a store if it dropped its loyalty card, he adds.

What customers really want is the ability to turn rewards into family days out or Pizza Express meals – which might explain why Tesco’s move caused an uproar.

Tesco’s Clubcard, which was introduced in 1995, enables shoppers to earn points for money spent with the supermarket. The vouchers they generate can be used for restaurant meals or entry to attractions such as London Zoo, for example.

Some could be used for four times their face value. Tesco is now cutting most to three times their value – but has postponed the change until 10 June.

Alessandra Bellini, Tesco’s chief customer officer, said: “Customers have told us they want Clubcard to be simpler, and they’ve asked us to make it easier to get the most value from the points they collect.”

The end of the loyalty card has been predicted many times before, but what is different this time is that smartphone apps are an obvious replacement for physical cards, experts say.

But retailers and shoppers will not drop the idea of loyalty rewards anytime soon, argues Annich McIntosh, editor of Loyalty magazine.

The Co-op re-introduced its membership card in 2016 – and even though it cost £35m in the first half of last year, Co-op bosses think it is worth the expense.

Planet Retail’s Natalie Berg says Amazon’s Prime membership has become “an all-encompassing beast of a loyalty scheme” that gives access to books, music, TV, photo storage and next-day delivery.

“Store cards might go because a bit of plastic in your wallet isn’t necessary,” says Ms McIntosh. “But loyalty programmes aren’t on their way out – they matter too much to people.”

https://www.bbc.co.uk/news/business-42721318


Retail Marketing

Loyalty Programmes are essential for retailers

Loyalty Programmes are essential for retailers

A recent study showed that a large proportion of consumers (94% to be exact) would use a mobile wallet more often if they could earn loyalty points with each transaction.

Consumers also stated, in another study, that they see loyalty schemes as a ‘must-have’ for any restaurant or retail outlet.

The ugly truth is… 75% of loyalty programmes fail due to lost or forgotten cards.

Introducing, White Label Loyalty, a mobile loyalty app that can be built bespoke to your businesses specific needs and requirement. With available tools to drive engagement and retain those ever important loyal customers, whilst also providing data-driven analytics illustrating the relationship between business and consumer.

“White Label Loyalty offers unique digital loyalty solutions for medium to large businesses wanting to create their very own branded digital loyalty app & integrated solution,” says Founder and CEO Achille Traore. “The platform is now being implemented worldwide for Hospitality/Leisure, Food & Drink & Retail industries. Providing not only tailored digital loyalty, but also a powerful engagement & retention engine that has been tested and proven to increase customer retention by 15% or more.”

White Label Loyalty has recently introduced card-linked loyalty, which allows consumers to turn any bank card to a loyalty card and collect points automatically at the point of purchase. Not only does this present a completely frictionless user journey for the customers but it also allows the business to collect transactional data without having to integrate with EPOS which we all know is a pain.

“Ultimately, traditional loyalty programmes are broken as physical loyalty cards are lost or forgotten and as result offer very little relevant data. As the loyalty mechanism is broken, businesses end up spending more money on customer acquisition and advertising rather than fixing the problem” Traore said.

“We provide businesses with the right tools to identify, retain and reward loyal customers which in turn results in increased profit and customer retention. We do this by making the process frictionless and seamless for consumers whilst providing an affordable, digital loyalty platform that allows retailers of any size to run their own branded and tailored loyalty program.”

So why should you choose White Label Loyalty?

“Our wealth of digital experience and expertise provide a one of a kind consultancy, ongoing support and most of all, success!,” says Traore.

 

Enquire today:


Why Customer Loyalty Programs Are So Important in the Retail Sector

Why Customer Loyalty Programs Are So Important in the Retail Sector

The point of Loyalty programmes is to drive market share and although retail executives recognise the importance of customer loyalty programmes in this process, few have taken in depth action.

Loyalty programmes in the retail sector need to be simple to access, relevant to industry trends and appealing to today’s digital consumer.

Start by considering the consumer experience. A good rewards programme will heighten this experience, but it won’t compensate for a bad one.

A great rewards programme will compile customer data and information on buying behaviours.

Loyalty programmes should be consistent, but new, novelty rewards should be introduced to keep customers intrigued. By using the analytics in our app you can identify which rewards are most popular and which are dead weight, to keep the interface clean and relevant.

Read more about the importance of relevant rewards and the tailored experience from the article below.

Feel free to contact us for a free consultation on your Retail Loyalty App.

Many retailers find themselves in a low-growth world. Millennials, showrooming, and changing technology platforms are disrupting the industry and stalling growth. Cost-cutting is a common strategic response, but retailers should focus on customer loyalty.

KPMG

Customer loyalty programs are proven methods for growing and sustaining market share. Consumers who are already enthusiastic about a brand are more likely to continue buying and are a prime market for that brand’s new products.

Still, there is a disconnect. Retail executives recognize the importance of customer loyalty programs, but few are taking action. Many companies, in fact, have merely tinkered with programs that were established years ago when consumer expectations and the competition were much different. They also don’t have an accurate way of measuring how their loyalty programs are even performing.

Old patterns of consumer behavior no longer hold true in the current retail marketplace, and retailers need to adjust to survive. Loyalty programs can still drove market share, but they need to be simple to access, relevant to industry trends, and appealing to today’s digital consumer.

The process isn’t cheap. Investments in loyalty programs can reach as much as 5 percent of sales. So to be worth the money, loyalty programs need to reach the right customers and need to be built with the proper discipline and a strong financial model.

So how do you do that? Let’s start with an action plan to establish four priorities for optimal results:

Start with the customer experience. A good loyalty program will multiply the impact of a good customer experience, but it won’t compensate for a bad one. So companies need an accurate way of measuring the customer experience, which should be the starting point of any loyalty program.

Use the data effectively. What separates a good loyalty program from a great one is the way it uses customer data. And companies need to integrate the data into their entire business operations, not just loyalty programs.

Keep rewards fresh. Loyalty programs have to be consistent, but consumers also like novelty. With the right approach to testing and personalization, a loyalty program can frequently introduce new and different benefits that excite customers at a reasonable cost. At the same time, the right analysis will identify benefits that are not popular or profitable. So sweep out the dead weight while winning attention with new ideas.

Design a business model first. Before you worry about a budget, figure out what program you want and design a business model around it. That will allow more creativity in coming up with funding and loyalty benefits.

Understanding what your customers find valuable is key—and it’s not always what will save them the most money. In a recent KPMG survey, half of the loyalty customers polled said they would do “almost anything” to earn more rewards in at least one program.

The rewards program also has to be flexible. Consumer preferences change, so your loyalty program has to change too. In the KPMG survey, more than 80 percent said they prefer surprise deals or gifts to information on sales, special privileges, time-saving opportunities, or other traditional program benefits. A program that offers frequent surprises will likely see a spike in sales and can be less generous with other benefits.

Companies should also consider a partnership to make a loyalty program more affordable. Co-branded credit cards and working with suppliers to reduce costs for products or funding are just two among many partnership options.

Source: https://www.forbes.com/