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Loyalty cards grease wheels for retailers

Pick n Pay last week said its Smart Shopper loyalty programme would reach 10-million members by the end of this year, far exceeding the grocer’s initial target of 3-million customers.

In an environment where retailers are trying to win over new customers and keep existing ones loyal, these programmes allow players to build up data on purchasing patterns that allow them to target shoppers with promotions and also manage stock levels.

According to Pick n Pay, the programme records more than 10 swipes every second that its stores are open and more than 10% of South Africans have a Smart Shopper card.

Within the supermarket space, Woolworths’ W Rewards incentive scheme has about 3.2-million active cardholders. Shoprite, which has long held the view that the high cost of loyalty programmes outweigh the benefits, has opted to use Eezi Coupons, which enable shoppers to get special discount offers via their cellphones.

Steve Hoban, head of Smart Shopper at Pick n Pay, said that over the past year the programme had undergone a number of fairly significant upgrades.

"We can now offer our customers coupons and vouchers for discounts that are perfectly in line with their personal shopping habits … we have also changed the way loyalty programmes work in retail by offering our customers free benefits with third parties as reward for shopping with us," he said.

As an example, "smart shoppers" can switch R32 worth of points for a R60 voucher to redeem against a Ster Kinekor cinema ticket. Other third-party rewards extend to Galaxy Jewellers, Spur restaurants and even Ratanga Junction, the Cape Town-based theme park. "It’s all about giving our customers opportunities to treat themselves in spite of tough economic conditions," Mr Hoban said.

Woolworths and Pick n Pay have partnerships with Vitality for cash back on its HealthyFood initiative.

Like many offered by retailers in SA, Smart Shopper works on a points system — the more a customer shops, the more points he or she accumulates. Woolworths has opted for the instant rewards route, which offers discounts at point of sale.

CEO Ian Moir last month said Woolworths was now a business that made decisions on a more informed basis thanks to W Rewards. "We know who cardholders are, where they shop and what they are most likely next to shop for. We know more about them than we ever have and we have driven them into the cross-sale."

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