Alright it’s not a loyalty card per se. The new Waitrose scheme will apparently "give cardholders access to exclusive competitions and offers".
Grocer margins are decreasing, marketing budgets are tighter than ever and the price war is intensifying. All of the big four are out to claim a larger market share and meanwhile Waitrose launches a loyalty scheme.
The scheme is the result of research carried out among thousands of customers to understand how they wanted to be rewarded and this is a crucial point - what they say versus what they do. Research would suggest that the scheme will not increase loyalty, regardless of what the customers say. Aside from the set up cost, this scheme is unlikely to generate growth. Only penetration in the form of more stores in new areas and incentives to attract new customers will do that. As recent work by researchers such as Byron Sharp points out “marketing that seeks to increase sales through targeting heavier buyers is unlikely to succeed”. So I’m left thinking that Waitrose plan to use it in two ways.
The scheme is the result of research carried out among thousands of customers to understand how they wanted to be rewarded and this is a crucial point - what they say versus what they do. Research would suggest that the scheme will not increase loyalty, regardless of what the customers say. Aside from the set up cost, this scheme is unlikely to generate growth. Only penetration in the form of more stores in new areas and incentives to attract new customers will do that. As recent work by researchers such as Byron Sharp points out “marketing that seeks to increase sales through targeting heavier buyers is unlikely to succeed”. So I’m left thinking that Waitrose plan to use it in two ways.
- The obvious benefit is data. This enables them to develop a better understanding of how the customers shop in order to improve ranging and better DM targeting in future – though that will take time and require further increased spend through channels such as DM and mobile to really see a return on the new found knowledge of the customer
- Use the scheme as a form of penetration driving activity by encouraging WOM and using the property in wider communications. O2’s priority campaigns are great example of this and may well prove a strong proof point for Waitrose, though whether they can deliver the tangible benefits and strength of rewards offered by the larger competitors remains to be seen.
Whether they should have put the money into store expansion to drive further penetration and growth remains to be seen, but it will be interesting to see the longer term affect of launching this scheme against the price war taking place amongst the big four. Will Waitrose succeed in maintaining share amongst the faithful and attracting new shoppers throught their offering, or will a second predicted recession prove too much for middle england shoppers on a tighter budget?
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