Customers Claiming Their Rewards
Bernice Hurst, Contributing Editor, RetailWire
have to speculate to accumulate, so the theory goes. But if speculating
means spending, and spending increases your ability to accumulate rewards
which can be redeemed faster, then perhaps Tesco’s new policy of giving
two points instead of one for each £1 spent will actually increase
Rebecca Smithers, says that she rarely has enough points from anywhere
to get anything because she isn’t loyal and shops around. But, by doing
that, she and other consumers may be getting a much better deal from
retailers who prefer a formula based on low prices and promotions.
That way they save money and can spend what they save anywhere on anything
rather than being tied in to whatever is on offer for the points accrued.
data mining arm, dunnhumby, is renowned (or notorious, take your pick)
for knowing what will get customers to respond. Nearly 1.5 million
shoppers reportedly responded to Tesco’s recent offer to “Double Up” their
points for selected categories including clothes and entertainment.
But analysts and the media focused on shoppers not tempted, hinting
that the new move showed desperation because the retailer has not been
growing as vigorously as its non-points-awarding competitors.
Leroux, in The Times,
interprets Baruch College research to conclude that consumers prefer
discounts that they feel they have earned although Asda boasts its “intelligent
offers” help customers use spare cash for paying down debt.
with what could be seen as investing in retailers has led to more people
waiting a shorter time to get their payback. Sainsbury’s Credit Cards
researchers claim that “54 percent of credit cardholders with a reward
scheme have claimed all or some of the rewards they have earned in
the past year” compared to “just 23 percent of those polled who said
they had claimed some of their rewards a year ago.”
a June 8 discussion here on RetailWire (The
Loyalty Card Conundrum), George
Anderson and most participants endorsed simplicity. Shoppers’ behavior
in cashing in, or rejecting points in favor of low prices, would seem
to support such views. Staying loyal to a single retailer, and accumulating
maximum points, can be rewarding. But saving money rather than accumulating
points can provide greater choice. Which leads to the question – are
shoppers more concerned now than ever before with cashing in?
questions: What are the pros and cons of Tesco doubling the payback
on its rewards programs? Do rewards for loyalty motivate shoppers more
or less now that the economy is so tight? Would shoppers rather have
a choice of rewards or everyday low prices?
- Tesco ‘propping up’ trading
with £200m Clubcard promotion – Telegraph
Credit Cards: Credit card holders are ‘starting to benefit from their
reward schemes’- Cardsmart
- How loyalty
cards for supermarkets such as Tesco encourage spending – The Times
- Asda continues
to defy downturn – Guardian
- Tesco to give
shoppers double points on Clubcard – Guardian
- Store cards
from clubcard schemes – Guardian