Still Using Your Loyalty Cards?

Still Using Your Loyalty Cards?

Loyalty cards may be fast becoming defunct, but the technologies that caused their demise can help businesses in a different way.

It’s hotly debated whether supermarket loyalty cards are actually on the way out, but it’s clear businesses are relying on them less and less. For many, the big sign was when Sainsburys halved the number of points customers got for every pound they spent on their Nectar cards. In a competitive climate where even the middle classes are favouring discounts stores such as Aldi and Lidl, it felt like the company needed to cut costs on a scheme that was failing to win customers.

Likewise, Waitrose took the approach of even giving away a free newspaper plus a cup of tea or coffee every day to cardholders, with no obligation to spend, just as a way to get people into stores.

The biggest result of this trend may not be the effect on takings, but rather the loss of data. Tesco insiders have revealed that its Clubcard, the first major loyalty card, was more about tracking customers than it was attracting new business. The idea was to identify patterns of behaviour to then create personally targeted special offers that pushed people into spending that little bit extra.

With customers now much more prepared to shop around and even split their weekly shop into store cupboard staples in one place and fresh produce and little luxuries somewhere else, it’s becoming much harder to build up a full picture with the poor data available.

However, the answer could lie in the very technologies that customers use to shop around for the best deals. This could be email newsletters, online tips, or even dedicated price comparison and bargain apps. Of course, the problem is that this data is now split across several different apps and platforms. The challenge for retailers now is to overcome both business and data protection hurdles to once again assemble a full overview of consumer behaviour.

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