UK retail chains beat Woolworths and Coles on rewards program

By @mik_mapa on
woolworths
A shopper walks out of a Woolworths store in Sydney, Australia, May 12, 2016. Reuters/David Gray

Review website Finder has released an analysis on the major supermarkets within Australia and other retail stores overseas. The review website analysed several supermarkets including Woolworths, Coles, Boots Chemist, Tesco, Dunnes Stores, Super Valu, Walgreen's Chemist, Ralph's and Countdown. The evaluation covered the stores' rewards system.

The report showed that UK chain Boots Chemist offered four points for every pound earned, equivalent to four percent. Customers who spent £1,000 (AU$1,719) could earn £40 (AU$68)in vouchers. Retail companies including Tesco in UK, Dunnes Stores and Super Valu in Ireland, Walgreen's Chemist and Ralph's in US offered the same percentage of reward to their customers by one percent.

Tesco has a Clubcard which customers could earn one point per £1 (AU$1.72) spent and every 100 points earened were convertible into £1 voucher. New Zealand's Countdown offered one point for every NZ$10 (AU$9.23) spent. Customers could convert their 200 points earned into NZ$15 (AU$13.85) voucher equivalent to 0.75 percent rewards. Woolworths and Coles only offered 0.5 percent for their reward program.

Woolworth's rewards program faced controversies in 2015 when it scrapped its Qantas frequent flyer points in favour of Woolworths Dollars. In 2016, it reverted its rewards program to spend money, get vouchers. The rewards program allowed customers to earn one point per dollar spent. They could receive a $10 voucher once they reached 2,000 points.

On the other hand, Coles offered Flybuys rewards program where members could double the rate of their points by signing up for a Coles Rewards Mastercard. They could also double the points by taking out one of the supermarket's insurance products. The members of the rewards program could also buy from the supermarket's partners including Adidas, Fitbit, Kmart, Budget, AGL, Goodlife Health Clubs, Etihad, Virgin, Kleenheat and OPSM Medibank.

Apart from the points earned, the analysis also considered the insights of such programs. "The retail giants collect huge volumes of data on everything you buy and use this data to try and sell you more stuff," Finder insights manager Graham Cooke said. He said that valuable data of the customer were used by retailers for direct marketing. 

He cited an instance where a Minneapolis father called his local store because his high-school-aged daughter started receiving mail with special offers on baby clothes. The bemused store manager apologised to the customer but on the follow-up call the customer apologised. It was revealed that the girl was pregnant. The automated data-mining system had the information first before the father knew his daughter's status.

Supermarket Competition - Woolies and Coles

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