Shopper Loyalty Not in the Cards

Jan 15, 2004

By George Anderson

Many consumers in the UK fail to see the value of having a loyalty card and either don’t use them at all or fail to redeem rewards associated with their use.

A study conducted for the Institute of Grocery Distribution in England found nearly 40 percent of shoppers refuse to carry loyalty cards and another 10 percent say they rarely
or never use cards.

The same research found that having a card did not increase a customer’s loyalty to a particular store or brand. Only eight percent of shoppers thought loyalty cards were essential.

Richard Campbell, marketing director of LMUK, which runs the Nectar card program offered by BP and Sainsbury called the research “rubbish” and added, “People enjoy the extra
treats our scheme offers for spending that they were going to do anyway. We have signed up one in two households in the country.”

Moderator’s Comment: Has the ubiquitous nature of shopper loyalty cards diminished their value in the minds of consumers? Are retailers looking for loyalty
cards to overcome deficiencies in their business in areas such as customer service, price competitiveness, etc.?

A spokesperson for the Institute of Grocery Distribution told the Daily Mail, “Typically, factors such as price, quality, service and convenience
have a high-perceived value and make a far greater contribution to fostering a loyal shopper than loyalty schemes. The importance of the schemes should not be overestimated. They
are clearly no substitute for getting the basics right.”
Anderson – Moderator

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