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What’s the future of loyalty schemes?

loyalty cardShoppers increasingly want three key things: value, immediate gratification and customisation. Recent research shows that these are the exact reasons Australians are getting increasingly involved in retail loyalty schemes.

But, with the recent controversy over the changes to Woolworths Everyday Rewards scheme plus the ongoing questions as to whether any retail loyalty scheme really offers the value shoppers are after, has Australia got a long way to go in the loyalty scheme stakes?

With UK supermarkets being old hands at loyalty, here are my top three UK schemes and what we can learn from them.

Waitrose pick your own offers

An absolute first in loyalty customisation, Waitrose launched its Pick Your Own Offers last year, which allows shoppers to choose their ten favourite products to receive a 20 per cent discount…every time they buy.

The smart and simple scheme has been a hit, with 850,000 customers having signed up with a direct link to sales increases year on year.

Sainsbury’s Nectar

Points can be earned at Sainsbury’s plus hundreds of other retailers such as Homebase, BP, British Gas and Argos. Although points accumulate at different rates, you typically earn one point worth 0.5p, for every £1 you spend. But this is bumped up with regular promotions where points can be doubled – so 4,000 points will get you a £40 voucher instead of the usual £20

The breadth of store offer and opportunities to get a boost in rewards is clearly a hit as it’s the biggest UK loyalty scheme with 19 million members.

Tesco Clubcard

Each time you shop at Tesco you accumulate one point, worth 1p for every £1 you spend. Once you have accumulated 150 points, vouchers are sent out to redeem in its supermarkets or at Tesco petrol stations.

However, you can choose to opt for Clubcard “Boost,” where you can trade in your regular vouchers for money-off deals with Tesco partners such as cinema tickets, magazine subs and travel. This gives you up to four times the value of the initial voucher – a £10 Tesco voucher could be worth £40 elsewhere.

Clearly the UK are far more evolved with their customer loyalty programs than here in Australia… But there is hope. The backlash to the change in the Everyday Rewards scheme and Woolworths’ subsequent amendment to reintroduce Frequent Flyers shows that the big retailers are looking to: (a) evolve their programs, and (b) listen to and reward customers with something they actually value.

Despite the whole thing being a PR disaster, Woolworths were trying to tick off two of the three key shopper insights (value and immediate gratification), so hopefully this is the sign that Australian retailers are finally looking to actually reward customers with their reward programs.

Laura Williams is the group account director at 31ST:SECOND, Australia’s brand participation agency 

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