When Tesco announced their plans for a Fresh’n'Easy loyalty card last week, I was pleased to read their promise that the program would be ‘like no other’ that we’ve seen in the US. Because the last thing we need is more card member schemes that neither drive loyalty, nor offer the shopper real rewards.
Some retail marketers might take offense at those two assertions, but over recent years, both shopper conversations and published data points have told the orange sheep that something isn’t quite right in loyalty-card-land. And I think the reason why is obvious: because retailers are getting what they need from their programs, and haven’t really noticed that shoppers are giving a collective yawn.
Retailers the world over have been following the lead of Tesco (and their card program partner, dunnhumby) in turning their cardmember programs into the ultimate database of shopper buying behavior for tailoring their marketing programs, store design and category management, with great effect. So it’s great for retailers, but what about the shoppers these programs are supposed to reward?
Nielsen has published figures that show that loyalty cards are not a major driver of retailer equity (aka loyalty) – especially in the US – and it’s little wonder. If you take a look at the key-chain of the average American shopper, she’s got more bar-coded little tags hanging off there than she has keys.
Talking to shoppers over the years, I’ve heard two things over and over about rewards programs:
- “the card member deals are okay, but they’re hardly ever for things that I want”; and
- “whichever place I go, I know I will save about the same”.
This speaks to two major ‘misses’ for me: the twin opportunities to “tailor” and “differentiate”. There’s a huge opportunity to use the knowledge about individual shoppers to better target offers and programs to that individual (take a leaf out of Amazon’s book!) and an even bigger opportunity to offer some different perks and rewards that make your own program a little different to the one across the street.
On the latter, there is so much low hanging fruit, that it wouldn’t even require too much creativity to take a step in the right direction. Just take a look outside the world of supermarkets, and compare to other loyalty rewards programs, like those of the airlines and hotels. Where are the ‘perks’ for the gold and platinum members, beyond a few ‘dollar off deals’? How about ditching one of those ’10 items or less’ lanes – which actually reward people for buying less in your store! – and replacing it with an ‘elite member’ red-carpet line? Or sending your ‘Gold’ members a window sticker entitling them to those super close car spaces up front near the door? Now they’re going to think twice about where they make that extra trip – no-one wants to lose their cushy parking space privileges next year!
To be fair, not everyone is missing the opportunity to deliver rewards that really tap into shoppers’ needs along the shopping journey. Online retailer FreshDirect has already set the pace with its ‘Chef’s Table’ program which rewards the most frequent and loyal shoppers with guaranteed next day delivery, and access to delivery slots not available to ‘regular’ members. And of course, they offer them the special deals you would expect as well.
That kind of thinking – delivering ‘rewards’ that actually matter to shoppers, and show a bit more creativity than the ubiquitous ‘dollar off’ – is exactly what I hope Tesco had in mind when they promised us something new.
Bring on the real rewards!
the orange sheep