Perhaps overshadowed by the exits of Dave Lewis and John Rogers, the big reveal of supercharged loyalty schemes from Tesco and Sainsbury’s did not receive the amount of fanfare that the retailers had been anticipating.
Although they have taken markedly different directions of travel with Clubcard and Nectar respectively, one senses that both retailers had identified a degree of disenchantment among their shoppers concerning loyalty cards.
Indeed, both businesses have diluted the benefits of the points accrued through their respective cards over the last couple of years and shoppers have not been shy in terms of expressing some dissatisfaction.
Antipathy is by no means limited to Nectar or Clubcard, in particular. TCC Global research shows that a typical UK shopper owns five loyalty cards but uses just three.
Around 70% of shoppers want to be rewarded for their loyalty by more than just a loyalty card. And only 6% of shoppers would stop shopping with a retailer if their loyalty card scheme was scrapped. In short, small plastic rectangles are no longer cutting the loyalty mustard.
That goes some way to explaining why both Tesco and JS have refreshed their approaches.
Clubcard vs Nectar
Tesco’s approach to Clubcard Plus is notable for a couple of reasons: the subscription aspect – it will cost shoppers £7.99 a month – and for the fact that it provides 10% discounts for two ‘big shops’ made in-store per month, diverting shoppers away from that pesky, less profitable internet thing.
With added benefits like discounts on selected non-food own brands such as its F&F clothing ranges, it certainly looks to be of great potential value for Tesco shoppers who spend in excess of £40 a couple of times a month.
As such, it could be beneficial in terms of retention – examples like Costco membership and Amazon Prime suggest that a subscription technique is great for maximising spend and loyalty from participating shoppers.
“I’ve had hundreds of Nectar points for aeons and I’m still a bit clueless about what to do with them, so why I’d want loads more is a bit of a mystery”
The Sainsbury’s approach, hoping to get shoppers to transition to the app in order to receive extra Nectar points on a personalised array of previously bought items, has its positives too. There is a tick for relevance and a tick for the digital approach. But I still sense there is a bit of work to be done on explaining the benefits of Nectar points.
Whereas Tesco delivers benefits in terms of cold, hard cash discounts, the allure of Nectar points is a bit more nebulous.
I’ve had hundreds of Nectar points for aeons and I’m still a bit clueless about what to do with them, so why I’d want loads more is a bit of a mystery. There could be scope here for energising the frontline troops to remind shoppers about how to redeem them.
As someone who shops everywhere because of their job, it’s hard to assess how a normal civilian would regard the advancement of these two loyalty programmes.
I suspect that they will both go down a storm with the Tesco and Sainsbury’s diehards and give them a further reason to stay. Winning back folk who’ve already crossed the discount Rubicon to Aldi and Lidl? Not so much.
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