The six myths can be classified in three groups architecture of shopper reward size and convexity of rewards architecture of retailer rewards sustainable profitability and horizontal competition type of retail sector frequently versus infrequently purchased goods . We discuss each of these myths in turn. Size Of The Reward Loyalty programs do not really work in grocery stores because the rewards that grocery retailers can afford to offer are too small.
They cannot offer better rewards according to conventional wisdom because of their razor thin margins fueled by extremely competitive market conditions. That doesn t stop many retailers from trying. Indeed grocers like Tesco Chinese Overseas America Number Data Sainsbury s Kroger Safeway and Stop Shop give back percent of the total spent to their card carrying shoppers. Stores in other categories— in books Best Buy in electronics—offer similar rewards. Boots the UK based pharmacy and beauty supply retailer offers a substantial reward of percent but that rate is more exception than rule. This type of reward is actually a thank you to the consumer from the store for the privilege of collecting loyalty card customer data. As former Tesco CEO Sir Terry Leahy put it in his recent book referring to the percent loyalty discount It was a thank you pure and simple. Can such small rewards convince consumers to favor one retailer over another.
Will consumers bestow their loyalty by spending most of their grocery dollars with one retailer for percent payback Let s look more closely at the actual rewards. They come in two forms turbo charged vouchers doubling tripling or even quintupling the value of the voucher at partner companies such as hotels restaurants and theme parks and individual shopper targeted offers whereby each shopper regularly receives an extensive set of tailor made coupons predominantly paid for by supplier brand owners.
發表於 2024-3-12 18:28:26
