After getting rid of its orange ticket programme, which only rewards shoppers for a limited range of products, Woolworths Australia's simplified Rewards programme has won 9.7m members.
Simplified reward scheme yields rich data
The new loyalty program rewards shoppers with AU$10 (US$7.50) for every AU$2,000 (US$1,511) spent. Shoppers simply have to scan their card at the checkout to collect points for future redemption. This encourages wide usage of the card which allows the retailer to collect data on shoppers' preferences. Woolworths has a 50% stake in a data analytics business Quantium, giving it an edge in optimising its loyalty programme. The data is used to ensure customers receive relevant, customised communication. Shoppers enjoy better offers on products that will interest them, and end up spending more.
Beyond low price
Aldi has been gaining market share from Coles and Woolworths since its entry in 2001. Shoppers are drawn to its low prices and private label products. After years of pressure to lower prices, Australian retailers are looking at more sustainable ways to increase basket sizes and enhance loyalty. The retailers are also lifting their games to brace themselves for Amazon's entry, expected to be later this year.