...for Sainsbury? Elaborate. Yes, there is evidence in the case that Nectar’s loyalty program pays out for Sainsbury's in numerous ways. Nectar helped Sainsbury's acquire customers. For instance, Nectar customers who are not Sainsbury customers may have another supermarket close to their home, such as Tesco. However, because these shoppers have a Nectar card, they are more likely to travel further for their grocery shopping in order to obtain loyalty points for their Nectar card. Additionally, Nectar allows Sainsbury to target members who are not currently shopping at Sainsbury’s but live close by a location. Typically, the retailer would have a very hard time connecting these targeted individuals, and subsequently converting them to regular shoppers. However, since Nectar has their information in its database, Nectar can target them, yielding a much higher acquisition rate at a much lower cost. The Nectar network helps Sainsbury’s retain customers. Customers are more likely to be loyal to Sainsbury’s as a brand because they receive loyalty points in return for their purchases. Nectar’s loyalty program is more effective than a stand alone program run by Sainsbury. The weekly spending at Sainsbury’s was 40% greater among shoppers collecting from the supermarket and two other sponsors. Shoppers value the ability earn points at multiple retailers, and become loyal to those retailers in the process. Shoppers who participate in these sorts of programs are less likely to defect than...
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...5: Case 5: Promotion Decisions MAKING LOYALTY PAY NAME STUDENT ID Nancy Kumari S11013306 Saher Buksh S01007626 Aditya Raniga S11052046 Table of Contents CASE BACKGROUND 2 NECTAR 2 Nectar Promotions: 3 SAINSBURY 4 Therefore the aim of this case analysis is to find out: 4 CUSTOMER REGISTRATION 5 TWO METHODS OF REDEEMING POINTS 5 COMPETITION IN THE UK GROCERY RETAIL INDUSTRY 6 COMPARISION WITH COMPETITORS 7 SITUATIONAL ANALYSIS 8 CONSUMER PERCEPTION OF NECTAR PROGRAM 8 SPONSOR PERCEPTION OF NECTAR PROGRAM 9 SHOULD SAINSBURY CONTINUE WITH NECTAR? 10 SHOULD SAINSBURY HAVE ITS OWN LOYALTY PROGRAM? 12 SHOULD SAINSBURY DISCONTINUE WITH THE CURRENT LOYALTY PROGRAM & DIVERT FUNDS TO NON-LOYALTY PROGRAMS 14 CUSTOMER LOYALTY PROGRAM IN FIJI 16 RECOMMENDATION 17 CONCLUSION 20 BIBLIOGRAPHY 21 CASE BACKGROUND NECTAR • The Nectar loyalty program is the largest loyalty program in Britain. • It was launched by Loyalty Management UK (LMUK and chaired by Air Miles co-founder Keith Mills). • Nectar opened for business in 2002. • With reference to various individual retail loyalty programs, Keith Mills,Gierkink, and further members of the LMUK team undertook the decision to search for an assembly of retailers who had their individual reward programs however were not content with their performance and could enhance their performance by combining with a multi partner loyalty scheme. • The initial four sponsors of LMUK were Sainsbury...
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...What’s the matter at Walmart? Gordon Wade – Partner Amidst a severe recession, Walmart, the retailer which claims the lowest prices…always…is suffering a continuing downturn in same store sales, the standard metric for evaluating retail success. How can this be? What’s going on? The facts are fairly clear. For seven straight quarters, same store sales in Walmart’s heartland US market have declined. The stubborn persistence of this downtrend supports the conclusion that something basic has gone awry. The stock market seems to agree. Walmart’s stock has been the poorest performer on the big board since the DJI reached its nadir some 3 years ago. The alarming answer is that Walmart’s traditional everyday low price (“EDLP”) positioning is less competitive in the very economic environment in which it seemed designed to prosper. Consumers are more stressed than ever, but now instead of blindly accepting that Walmart has the lowest prices …always… these struggling digitally enabled cybershoppers are surfing the net comparing Walmart’s prices with their competitors. And there are LOTS of competitors, ultra low priced Dollar Stores and hi-lo food retailers, category killers such as Best Buy and Home Depot. Let me give one simple personal example. Yesterday my wife came home from Publix with two huge boxes of Cheerios, which she bought on special for $5. On its best day, Walmart could not match this price or that of dozens of promo items at numerous retailers including...
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...9-505-031 REV: DECEMBER 5, 2005 JOHN DEIGHTON Nectar: Making Loyalty Pay Persuading British households to do anything was not easy, yet, in the 18 months leading up to March 2004, Loyalty Management UK (LMUK) had induced over 54% of them to try collecting Nectar points and 40% to persist, making Nectar Britain’s largest rewards program. Each week it added 50,000 new members (whom Nectar called collectors). Rob Gierkink, CEO of LMUK, was pleased with his team’s accomplishment. In March 2004 Justin King had just taken over as group chief executive at Sainsbury’s, the supermarket chain that was Nectar’s largest issuer of points. He saw that more than half of Sainsbury’s 240 million pound (₤) annual marketing budget went to Nectar and said: “Nectar represents a significant investment for Sainsbury’s, and I can’t help but feel that if we put the investment into more staff in our stores we’d see a better return. I was part of the senior management team that turned around the ASDA supermarket chain before it was sold to Wal-Mart, and the changes we made at ASDA were all about price and value for money. ASDA didn’t have a loyalty program.” He continued: But I do understand the value of knowing more about what our customers are doing dayto-day and this is part of the value we get from Nectar. We use the Nectar data on our customers to help us determine which stock to carry in which stores. The Nectar data also allows us to do much better and more targeted marketing...
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...uk/lifeandstyle/2003/jul/19/shopping.features 17/03/13 11.52am The card up their sleeve It sounds good - loyalty cards entitle us to freebies or cash simply for shopping at our local superstore. Of course, retailers get something in return: a heap of information about us we might prefer them not to know. That's before they get started on the new tags that track you and what you buy. Rachel Shabi investigates Every time you reach the checkout in the two biggest supermarket chains, it's the same question: have you got a card? It can get irritating, but nonetheless we have willingly signed up to their reward schemes - in droves. According to market researchers TNS, around 85% of UK households have at least one loyalty card. We've accepted the membership rules of these innocent-looking, points-mean-prizes clubs: you show us some loyalty, say the retailers, and we'll give you nice bonuses in return. That loyalty, on the face of it, is based on how much you spend with one particular retailer. Sure, the rewards aren't huge but, as Tesco likes to put it, "Every little helps." Besides which, we in the UK love bargains, and getting something for nothing even more. But the question is: how much does the nothing really cost? It is not simply a matter of choosing to be "loyal", now synonymous with "open your wallet", to one supermarket over another - the cost is in having your purchases scrutinised and analysed in staggering detail by the loyalty card retailers. You'd be amazed what they can do with a...
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...frequent shopper program. Customers will be awarded points toward free item and discounts. The program will provide data gathered from purchasing behaviors to help streamline processes, satisfy customers, develop a closer relationship with each member, and foster a stable platform for efficiency in operations. In this paper I will discuss the potential legal, ethical, and specific costs related to the issues of developing a frequent shopper program. Finally, I will discuss how this information system has an effect on the organizational structure. The loyalty rewards program has many benefits to both the customer and the company; however, there are legal concerns that must be addressed. Membership will begin on a sign-up basis. Customers who want a membership will provide personal information and be subjected to legal terms, privacy agreements, and security policies. Sensitive data is collected at different times in conjunction with loyalty programs. The first instance is created during the loyalty card application. The second instance develops when purchases are recorded, and finally when the spending histories are recorded; creating a consumer profile. Kudler has illustrated what information it will collect in the Database Diagram – PNG under customer table. This information includes Full Name, address, phone number, anniversary, e-mail address, and date of birth. Class action lawsuits can develop if a customer believes his or her privacy has been compromised. Cost for legal...
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...instrumental in bringing about revolution in India. Since it opened its doors, the chain has become the highest benchmark for the Indian retail industry. Since its inception in 1991, Shopper’s Stop Ltd has introduced various retail formats in India. “The tapestry of history has no point at which you can cut it and leave the design intelligible.” The foundation of Shoppers' Stop was laid on October 27, 1991 by the K. Raheja group of companies, one of India's biggest hospitality and real estate players. The Group crossed yet another milestone with its lifestyle venture-Shoppers' Stop. With its immense expertise in the service industry and creditability, Shoppers' Stop today boasts of 61 retail outlets across the country and is planning to spread its wings with futuristic expansion plans to meet the challenges of the retail industry. A benchmark for the Indian retail industry to follow, Shoppers' Stop has progressed from a single brand shop to a Fashion & Lifestyle store for the families. Shoppers' Stop is a household name, known for its superior quality products, services and above all, a complete shopping experience. Shoppers' Stop was the first to redefine shopping experience and creating a niche for itself in the service industry. As India's first specialty chain with outlets in Mumbai,...
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...Walmart Customer Loyalty Program Save Money, Live Better, Reward Yourself! Travis Godderidge Rick Hayes Darrell Johnson Chad Mikels HBM 581 Services Management Section 2 Team 5 February 24, 2013 [Type text] Table of Contents Executive Summary Background Research Companies researched, program names and descriptions Description of the Proposed Program Company overview Target customers Suggested Program Names Features and Benefits Terms and Conditions Duration of the Program Initiating and Marketing Tracking Device for Customers Estimates costs to implement and sustain the loyalty program Summary and Recommendations References 1 2 3 8 9 9 9 10 11 12 13 14 15 16 Executive Summary In the fierce world of global discount retail competition, differentiation is critical to long term success and survival. Walmart was founded on the differentiating factor of the lowest prices for the highest quality products. While this has served Walmart well and will continue to do so with global sourcing and supply chain management to secure the best products at the best prices, an expansion of the services provided to the customer and the ability to obtain demographic spending information and trends will prove invaluable to Walmart’s continued success and rapid global expansion. Additionally, programs that help retain customers once the customer has entered the store will increase market share more rapidly and increase...
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...high levels of each. Therefore, their target market tends to middle-class shoppers. (Berman and Evans 2010, 138)Myer is one of Australian department store group which stayed at the top in customer satisfaction for department stores. According to the Roy Morgan Retail Satisfaction Report for September 2011, Myer remained top in customer satisfaction for Department stores with 89% of their customers either ‘very’ or ‘fairly satisfied’. (David Jones and Myer narrowly lead Department and Discount stores in satisfaction, 2011) At present, Myer have been issued different types of Myer cards as their customer loyalty programs. For example, Myer Visa Card is a part of customer loyalty program. The features are people can reward yourself with Myer Visa Card by spending on the things you need. People can earn Myer one Shopping Credits when they fill up their cars, buy groceries or pay bills. Shopping Credits can then be turned into Myer one Gift Cards for use at any Myer store. (Myer Visa Card Contract Documents and Credit Guide, 2011) Earn 3 Myer one shopping Credits for every dollar spent at Myer and up to 3 MYER one Shopping Credits with Myer one affiliates. And when people use your Myer Visa Card for their everyday shopping, people earn 1 Myer one Shopping Credit for every dollar spent. (Myer Visa Card Contract Documents and Credit Guide, 2011) Simultaneously, when people are approved for a Myer Visa Card, card holders are able to link with Myer another significant rewards programs...
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...1.6 CRM Practices in Retail Sector India presents a huge opportunity to the world at age, to use as a hub. Standing on the threshold of a retail revolution and witnessing a fast changing retail landscape, India is all set to experience the phenomenon of global village. India is the “promised land” for global brands and Indian retailers A “Vibrant economy”. India tops in the list of emerging market for global retailer and India’s retail sector is expanding and modernizing rapidly in line with India’s economic growth. The future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing working-women population and emerging opportunities...
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...Conclusion: Retailers’ Digital Couponing Predictions and Demands.................................................................20 Appendix..................................................................................................................21 2 The Tipping Point: Retailers Embrace Digital Couponing Executive Summary Over the last two decades, technology has helped put security and distribution controls in place to build the online coupon system that we see today. With the rise of smartphone usage, we see an even more dramatic shift for consumers away from traditional clip-and-save paper coupons and towards digital coupons. In a recent Google survey, 59% of consumers said they have loaded coupons onto a loyalty card (from mobile or web).1 To understand the digital...
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...CO-BRANDING OF CREDIT CARDS: AS A TOOL FOR CUSTOMER ACCQUISITION Contents CO BRANDING: .......................................................................................................................................... 3 INTRODUCTION: ....................................................................................................................................... 3 TYPES OF CO BRANDING: ...................................................................................................................... 4 Reach & Awareness Co-branding ............................................................................................................. 4 Value Endorsement Co-branding .............................................................................................................. 4 Ingredient Co-branding ............................................................................................................................. 5 Complementary Competence Co-branding ............................................................................................... 5 The Power of Co-Branding ........................................................................................................................... 5 Benefits of Co Branding ............................................................................................................................... 7 Problems with Co-branding .........................................................................
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...performances of these two companies and he wanted to figure out which company performed better in different areas. Sears, Roebuck and Co. was founded in 1891. It started originally with a sole catalog business and then expanded into retail stores in 1924. Its stores were primarily located in shopping malls, including a large variety of merchandise. Sears has become the world’s largest retailer in terms of annual sales. By the early 1980s, Sears faced increased competition and declining market share. In 1992, The CEO of Sears, Arther C. Martinez has carried out three methods to improve profitability. The first was to cut costs. The second was to re-oriented the product mix in which the target audience was set to be middle-class female shoppers. The third was to offer customers more flexibility through the use of the company’s proprietary credit card. The policy of credit card has enhanced Sear’s profitability. In 1962, the first Wal-Mart store was opened in Bentonville, Arkanas. Then the small rural community grew into a retailing powerhouse. In 1991, Wal-Mart claimed $43.9 billion net sales and the title of world’s largest retailer. Five years later, the company’s annual sale was up to $100 billion. Wal-Mart offered competitive...
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...moderate bargaining power. Buyers switching costs to non-warehouse types of supermarket is somehow high since other traditional and retail outlets are readily available Since warehouse clubs do not offer retail products, customers can easily switch to retailers if they feel that the bulk products that the warehouse are offering are too many and the discount price is not that big. Bj's warehouse are trying to attract retail buyers by offering smaller package sizes that are typically seen in the supermarkets.Other types of supermarkets and specialty stores are readily available to buyers. Shoppers also have the opportunity to postpone purchases and can window shop in other supermarkets and the like if they feel that the prices are high. This is the reason why wholaselers clubs make sure that they offer the best possible price.The limited choces in warehouse club can also be a cause for shoppers to shift to other supermarkets and department stores which offer a lot of variety of merchandise. Membership Fees are also constraining new potential buyers. Some shoppers feel that it is better to use the membership fee to purchase products. Shoppers can also buy the same product in other stores that do not have membership fees. Bjs warehouse club tries to contradict this by having a strategy where non-members can shop in a certain day and see and experience the advantages and perks of being a member of a warehouse club.m;pojioj Buyer switching cost to other warehouse club is high since...
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....3 Key Facts...............................................................................................................3 SWOT Analysis.....................................................................................................4 Tesco PLC © MarketLine Page 2 Tesco PLC Company Overview COMPANY OVERVIEW Tesco PLC (Tesco or ‘the company’) is a food and grocery retailer. The company primarily operates in Europe and Asia. It is headquartered in Hertfordshire, the UK, and employed 519,671 people, on an average, in FY2012. The company recorded revenues of £64,539 million (approximately $103,223.7 million) in the financial year ended February 2012 (FY2012), an increase of 6.8% over FY2011. The operating profit of Tesco was £3,985 million (approximately $6,373.6 million) in FY2012, an increase of 1.7% over FY2011. The net profit was £2,806 million (approximately $4,487.9 million) in FY2012, an increase of 5.7% over FY2011. KEY FACTS Head Office Tesco PLC Tesco House Delamare Road Cheshunt Hertfordshire EN8 9SL GBR 44 1992 632222 Phone Fax Web Address http://www.tescoplc.com Revenue / turnover 64,539.0 (GBP Mn) Financial Year End Employees London Ticker February 519,671 TSCO Tesco PLC © MarketLine Page 3 Tesco PLC SWOT Analysis SWOT ANALYSIS Tesco is a food and grocery retailer. The company has been building a sustainable business model over the years through diversification into new geographies and value oriented retailing....
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