Loyalty Card: a waste of time?

Loyalty Card

Supermarkets expects the card to maintain loyalty to their clients of their local rivals - and generate useful information in the process. But with the news that Asda has scrapped his regime, is almost the end of these small pieces of plastic?

Asda has taken the brave decision two weeks ago to abandon a four-year pilot test of its Loyalty Club. Decided the money would be better spent to reduce prices. Or, as the official line is, customers do not have pounds in the pocket today for tomorrow.

Bold yet, the company will not be the adaptation of IT systems of any other thing, which means millions of pounds in lost investment. "They were the systems of measurement of loyalty. There are no plans to use for anything else. We just remove the system files and all of our platforms," said John Beaumont, Asda's project manager for customer loyalty.

This poses no drastic move to the next question: if Asda loyalty club experience was so bad, why then are Tesco, Safeway and Sainsbury's is continuing its own?

It's not as if the cards have been a huge success. Let a study last year found that consumers in the United Kingdom is confident in supermarkets than any other institution - because they think that the shops do not respect personal privacy. And we heard nothing about reaped the benefits of this so-called loyalty momentum, perhaps because there is nothing to stop customers using a discount card on all purchases on the street.

This month is make or break the loyalty cards. Asda has bowed out. Sainsbury's is ominously quiet about the future. Tesco and Safeway, but they are about to announce its next generation of loyalty. His answer to the question, 'Why continue the loyalty card? is to make the core of its strategy of retailing.

No matter how profitable are the plastic cards - or not - that the supermarkets are adapting IT systems to differentiate themselves from their rivals.

Tesco is expanding its ClubCard include other special offers from retailers, through First Call International. Holidays, entertainment tickets and are on the card. "This will re-establish Tesco as the number one loyalty - going up the ante for our rivals," said business consultant internal IT, John McIntyre.

He said: "We will be using our existing systems in a slightly different way. We created a subset of the main database, which contains information about who is eligible to receive new offers - based on the number of keys you collect."

Safeway is going in a different direction. Are using the loyalty card data ordered remotely to carry out tests in Basingstoke. The Easy Test Order be extended this fall to Hayes, where over 500 people will be offered discounts on their personal 3Com PalmPilots because their home shopping.

Tesco has not considered joining his home with their purchases of services data on customer preferences. Safeway and Tesco is to ridicule the efforts of the grounds that is associated with retailers such as Philips and Royal Dalton since its launch.

Whatever the future of the cards, the supermarkets have their underlying investments, and use it to boost competition. "Easy to order is our first step in taking customer management to the next stage of development. We have a commitment to this roll to stores in the not too distant future," said Roderick Anguin, Safeway, director of business development IT.

Both Safeway and Tesco insist on their second generation systems will not make any investment of the original redundant.

"We are making changes because our customers want more excitement from their loyalty cards," said the manager of the Tesco club card, Dean Brown.

But Perri 6, which commissioned the study from Demos, 'The future of privacy, "said:" I am not surprised that supermarkets have to move from the basic loyalty card systems. For all the effort they have put into the marketing of cards, not only has earned the trust of the customer. "

Loyalty Card

Research on Loyalty Card.

Loyalty Card

When you're stacking up grocery items at the checkout line, you're probably not worried about whether your supermarket chain is compiling a profile of you based on what you buy, and storing that information for its own use. After all, who cares if you buy one brand of tissues over another, or favor name-brand microwave pizzas over store brands?

Supermarket chains care. So does CVS. So much so that they use discount cards (referred to as "membership" or "loyalty" cards) to offer you what seem like great bargains. They use the cards to keep tabs on what you purchase, how often you shop, and what your buying preferences are.

And, just as data brokers like ChoicePoint collect personal data and use it to build an aggregate "profile" of individual consumers, supermarket chains use their stored data to target buyers with "special" offers and "preferred" advertisements from their marketing partners.

This is not a uniquely American phenomenon. Everywhere a supermarket, pharmacy, or department store can be found, anywhere in the world, you can assume there's a "discount rewards" program in place to provide customers with benefits that go "beyond mere shopping," as one writer put it in the May 29th edition of the Hindu Business Journal.

"You need to be a compulsive shopper to make the best of the loyalty cards. If you visit the store just once a year or like to comparison shop, these cards may not have much to offer," the article noted.

The recent news that CVS ExtraCare card users' information was exposed on the company's Web site illustrates the risks that loyalty card programs entail. The question then becomes, what is more important -- saving money or protecting your privacy?

What's The Big Deal?

According to a 2004 poll conducted by Boston University's College of Communication, 86 percent of American shoppers use some form of store card or discount card, "and the majority of them say the benefits of the card are worth giving up some privacy." A Canadian Broadcasting Corporation (CBC) article in 2004 stated that 76 percent of Canadian consumers belong to at least one loyalty program. A British advertising column boasted that loyalty card programs had achieved "85% consumer penetration" in the U.K. circa March 2005.

Loyalty card users enjoy discounted prices, special coupon offers, and rebates or "points" towards airline tickets or shopping sprees, much like credit cards. In addition, many loyalty card programs offer tangible benefits such as CVS's plan to designate pharmaceuticals purchased with their card as qualifying for medical Flexible Spending Accounts (FSA's), or the Upromise plan, which allocates portions of money spent using participating stores' loyalty cards to your children's 529 college savings account.

Many users consider the idea of targeted marketing a boon -- if they like one kind of product, why wouldn't they want to get offers for similar products?

Most shoppers approach loyalty cards with a mixture of weariness, indifference, and amusement. Technology writer Declan McCullagh succinctly stated that "nobody's forcing shoppers to sign up for such cards. If you don't like stores that offer them, take your business elsewhere." Or as blogger Jane Hauntanen put it, "Now people will know [I] bought a roll of dental floss at 7:49 PM at CVS and paid two dollars for it. That is an invasion of my privacy. Of course if it bothered me that much, I could just pay cash and forget about the savings."

However, many shoppers are increasingly aware that loyalty cards are being used to compile profiles of their shopping habits for later use, and that this data can be farmed out to business partners, telemarketers, and direct-mail solicitors. What isn't public knowledge, however, is how often discount card programs themselves are outsourced to other companies.So, it is entirely up to you use any loyalty card.

Loyalty Card, an alternative for consumers (loyalty card)

Loyalty Card

Loyalty card sales gave a huge $97 billion in 2007, up from $83 billion in 2006, according to data from The Tower Group as cited in The New York Times. 2008 holiday season sales have not been finalized, but loyalty card will probably pass the $100 billion mark for 2008. According to a January 2008 National Retail Federation survey, 79.7% of consumers said that they plan on buying at least one loyalty card during the next holiday season.

In 2007, an interesting trend occurs among consumers where most of them did not spend all the value in loyalty cards in one month. Furthermore, it is estimated that around 15% buyers never cash in the loyalty cards and 30% of card value was never redeemed.

Characteristics of loyalty card users:

• 56 % prefer having the ability to reload or add value to a loyalty card once used.
• 69% prefer a loyalty card for which they can choose the stored value versus pre-sets.
• Consumers are 10 times more likely to buy a loyalty card over a paper certificate.

Advantages of Loyalty Card?

• Controlling what you spend
• Efficient method of rebate fulfillment
• Speedy reward issuance
• Custom tracking and measurement of submissions
• Gift card serves as a mini-billboard advertisement

So...if you already accept credit cards and have a terminal or POS system, you can also issue and accept loyalty cards. Your bankcard processor will add the necessary programming to your existing hardware. You can choose from a variety of pre-designed card templates, or have a custom card created.

Loyalty Card