The festive grab for shopper spend is hotting up, but how are the big grocers trying to outgun each other and are their efforts worth it?
Why talk about this now?
The big four food retailers are using discount vouchers to incentivise customers to spend more. The difference this Christmas is that Asda has joined the party - last year the Walmart-owned chain suffered as rivals Morrisons, Sainsbury’s and Tesco deployed the tactic.
M&S also awarded customers vouchers for general merchandise and food spending last year. Voucher offers help drive footfall during the Christmas season and, when shoppers redeem their vouchers, the likelihood is they will spend more.
How do vouchers work?
Some are highly targeted, such as those piggybacking Tesco’s Clubcard scheme or the Nectar programme, which Sainsbury’s is a member of. Asda’s and Morrisons’ schemes are relatively unsophisticated in that they blanket-cover all shoppers.
This year Tesco has launched another Clubcard initiative allowing customers to double the value of their Clubcard vouchers in specified non-food categories during November.
Sainsbury’s ongoing ‘coupon at till’ initiative, which sits alongside Nectar points, offers targeted promotions and money-off deals that customers receive at the checkout.
Morrisons has revamped its Collector Card scheme. Customers must spend £40 in-store for a period of five weeks, and in return receive a £25 money-off voucher to redeem before the new year. This year, the scheme has been extended to include a further £5 discount voucher that can be redeemed in January.
Asda has entered the fray with a voucher book. Customers must spend £40 in-store and receive coupons worth £40.
Who funds the vouchers?
They are often a mix of retailer and supplier funded. Morrisons’ scheme is funded solely by the retailer, whereas Asda’s voucher book is a combination of supplier funded and own-label products. Tesco and Sainsbury’s fund their schemes from their marketing budgets.
Where do vouchers fit in with overall trading strategies?
As shoppers have become more promotionally focused, retailers have upped their game and are using a variety of commercial tactics to motivate customers to spend more. Combined with loyalty schemes, vouchers can help retailers develop a deeper engagement with customers.
Is it only food retailers that run voucher schemes?
No, non-food retailers do too. Argos, for instance, has also offered money-off vouchers from time to time including within the last few weeks.
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