Coles testing new loyalty service

Date : 26 July 2018

Coles is testing a new loyalty subscription service called 'flybuys max' that offers free home delivery, online video streaming, discounts on leisure and entertainment, plus cheaper fresh grocery products.

Available via a monthly or annual sub

The new service is available for AU$10 a month or AU$99 a year and includes unlimited free home delivery on Coles online orders over AU$50. Members can stream unlimited videos from partner website MuviNow, as well as get discounts on theme parks, cinema tickets and travel bookings made via the flybuys travel website. Additionally, members can choose to get either a 5% discount on all fresh produce, including meat, or earn 10 flybuys points, rather than the usual one, for every dollar spent at Coles or on fuel at Coles Express forecourts (up to 250 litres a week).

New service is being compared to Amazon Prime

The new subscription service is currently being tested by Coles employees, familiies and friends for two months, and will then be rolled out nationally. In recent years, many retailers have introducted subscription schemes that offer unlimited online deliveries as a tactic to lock in loyalty. For example, Woolworths has had its Delivery Saver scheme since 2014. Coles has been slow to introduce a similar service, however, the new subscription offers more than simply free deliveries and is being compared more closely to Amazon's Prime service, which also offers free online streaming and discounts at Whole Foods Market stores in the US.

New 'flypay' digital wallet being developed

Locking in loyalty has been a constant challenge for retailers in Australia and, in our view, this new service would be a good addition to the Coles offer. It is another example, similar to its new 'Little Shop' marketing campaign, of where the retailer is shifting its strategy away from being overly reliant on price cuts and moving towards delivering added value. On top of this, Coles is working on a new digital wallet that is understood to be called 'flypay'. The new wallet will combine payment, receipts, flybuys and coupons in one easy to use app.