What no more apples and Qantas Frequent Flyer points?
Shoppers at Woolworths will earn discounts on groceries instead of Qantas frequent flyer points as part of a major overhaul of the popular Everyday Rewards program. Under the terms of the new look scheme, customers will earn “dollars” when they purchase specially marked grocery items at Woolworths. Once a customer accrues $10 this amount will be stored on their reward card and instantly deducted from their next shop.
The amount a shopper can earn varies from item to item but supermarket and liquor boss Brad Banducci said it was easy to accrue $10 in savings in a single basket. Orange stickers on the special reward products will display how much a customer can earn on the item, which will vary from 20c to $2.
Delivering what customers want
Woolworths claims this simple scheme gives its nine million loyalty customers what they want – discounts on groceries. Mr Banducci said the changes to the scheme were the next phase in its customer first strategy.
“There was an absolute commitment to look at the business through the eyes of our customers and make decisions that benefited them,” Mr Banducci said.
“What our customers have told us is what they really value is the price of their basket of goods and… they really valued cash backs.”
Simplicity will be key
He said the scheme was simple and delivered the “instant satisfaction” shoppers craved.
“It’s a very simple program, which is part of our desire for simplicity and clarity in the way we communicate,” Mr Banducci said.
Mr Banducci said the new scheme focused on getting away from all the ‘ifs and buts’ that characterised a lot of retail loyalty schemes.
Woolworths claims its research suggests only 9 per cent of customers were chasing frequent flyer points when they shopped at Woolies compared to 68 per cent, who wanted cheaper groceries.
Reaction not positive
Less than half of Woolworths 9 million card holders are linked through to the Qantas Frequent Flyer program but news the supermarket was cutting ties with the airline provoked a fierce response on social media.
Some shoppers vowed they would never shop at Woolworths again if it axed Qantas.
The new scheme comes into effect next week however shoppers will continue to earn Qantas points until the end of the year, meaning both schemes will run concurrently for a short period.
Woolworths’ director of loyalty and customer data Ingrid Maes said the new scheme was all about being “100 per cent relevant to 100 per cent of customers.”
“Customers will go into stores and see a wide range of orange stickers on items they already buy from fresh… to gourmet.
“These items, on average will give them 15 per cent cash back, the moment their piggy bank reaches ten dollars it comes automatically off their next shop,” Ms Maes said.
Discussions to continue with Qantas
Woolworths would not reveal how much it has invested in the new scheme or the reason it has not included Qantas in the revamped program.
Except to say that Qantas was a long term partner and it would continue discussions with the airline.
Insiders suggest the link up with frequent flyers was costly as it required Woolworths to pay Qantas upfront for each point it passed on to shoppers.
Coles announced a tie-up with Etihad Airlines for its Flybuys members last week, which means shoppers at the Wesfarmers owned supermarket chain can earn frequent flyer points and status credits from their grocery bills.
Woolworths reports its first quarter sales results this Thursday, with comparable food and liquor sales expected to be 0.5 per cent weaker according to Deutsche Bank.
This compares to Coles, which reported a 3.6 per cent rise in like for like food and liquor sales for the three months to September.
The pressure on Woolworths to turn its supermarket ship around is unrelenting as Coles continues to gain market share with each passing quarter.
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