Independent retailers blitz big business in the loyalty reward stakes

Standing in line at the supermarket yesterday it amazed me how many people had their loyalty card out ready to be swiped. I could almost see the glint in their eye about the benefits they’ll get from the points they earn from their trolley of purchases.

I reckon it’s a con.

While they shop for hours on end to get enough points to redeem a DVD or even a night at a hotel, the retailer gets instant rewards by matching each shopper against what’s in their basket. They know the shoppers name, age, gender, family situation, address and other data about them and theirs.

The data being gathered against each consumer is worth more than is being paid for it by the retailer in the form of points and it’s time someone did an expose on what a rort these loyalty schemes are.

I prefer the coffee shop approach. Get a card, get is stamped for each coffee purchased and after a few days you get a free coffee. Way more valuable. It’s what I’d call a true loyalty reward program. Not some data grab dressed up as a loyalty scheme.

This is just another example of independent retailers offering more value to consumers. Real value.

I should acknowledge that I have some experience with this as a retailer. We use a simple loyalty scheme in my shop (a newsagency) for magazine purchases. Compare this to the flybys loyalty scheme at Coles supermarkets and you’ll see that ours is considerably more valuable.

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Even though we’re an IT company (as well as retailers) we have deliberately made this card manual. Our research indicated that consumers like to see how their “bank” is building. It works. Our magazine sales are way above industry average growth.

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