Incentive schemes do not only reward members for purchases, but also help retailers to better understand their customers’ buying behaviour. They are able to mine information so they can tailor their products and services to suit their clients’ needs. This encourages an affinity between consumer and brand.
NAB joint MD Gill Randall said on Tuesday the increase in loyalty programmes, as was proven by the number of loyalty cards available to consumers, had escalated.
According to the survey, 50% of purchase decision makers (PDM) have a loyalty card, but that this differs from area to area.
For example, 53% of PDMs in Milnerton, Western Cape have a Clicks ClubCard, compared with the average of 25% for a Clicks ClubCard across the country.
Of those PDMs with a Woolworths loyalty card, 54% also have a Clicks ClubCard, 20% have a Dis-Chem loyalty card, 35% have an Edgars Thank-U card, 2% have a Fanatics (Exclusive Books) card, 8% have a Jet Club card and 53% have a Pick n Pay Smart Shopper card.
The Roots survey sample of 28,500 interviews took place in 115 areas from Sandton, Constantia and Ballito to Polokwane, Diepkloof and Gugulethu.
The analysis, the largest urban, community-level quantitative survey, aims to provide intelligence on the media and purchasing habits of South Africans.
Already long established in the market, Clicks ClubCard has 4-million active members. The incentive programme, like many offered by retailers in South Africa, works on a points system — the more a customer shops, the more points he or she accumulates, which then helps them to qualify for cash-back vouchers that can be used in stores. At Clicks, sales to ClubCard members account for 77% of total sales, with the basket size of ClubCard holders double that of non-club card customers. Clicks customer marketing executive David Hazell says the company uses the data from its loyalty programme to understand who its most loyal customers are, how often they shop, what they purchase and in which stores they shop the most.
According to professional services firm PwC, in many international markets, such schemes have helped retailers more precisely target deals and offerings to their consumers — in anything from merchandising layout through to the timeliness of offerings — based on a deeper knowledge of their spending patterns.
According to Ms Randall it was clear that consumers were not loyal to one store or brand.
"Consumers cross shop, they shop locally and they pre-plan their shopping, meaning that retailers need to do their research," she said.
Of all PDMs who shopped at Woolworths for food and groceries, 54% also visited Pick n Pay, 21% went to Shoprite, 38% visited Checkers and 32% visited Spar.
"The simple truth is that people shop close to home so you need to offer them more choice so that they don’t have to travel. That’s why many retailers utilise community newspapers as their media platform of choice," Ms Randall said.
According to the research, retail inserts are studied while shoppers are going through their planning process.
Source: BD
