Waitrose MD says customers want immediate rewards, not 'meaningless' loyalty points

Mark Price, the managing director of Waitrose, has questioned the future of supermarket loyalty cards which offer "meaningless" points when customers prefer immediate rewards.

He said the success of the myWaitrose card, which offers customers a free cup of coffee or tea, had been revealed by the fact that the retailer was now the second largest provider of coffee in the UK.
In news that will frustrate independent coffee shops on the high street, Waitrose says it is shifting approximately 1m cups of coffee a week. Only McDonald's sells more coffee in the UK.

The surge in coffee sales has occurred after Waitrose started offering shoppers who signed up to its loyalty card, myWaitrose, a free cup of tea or coffee every day.

Mark Price, the managing director of Waitrose, told The Telegraph that the promotion had been "phenomenal". The Waitrose head cast doubt on the future of Tesco's Clubcard by saying that using loyalty cards to offer customers points had become "meaningless" to shoppers.

He said: "Giving free coffee or free newspapers is disruptive to the market, but I think that is what customers want, I don't think they want a point. I mean, what is a point? I think it's meaningless. It doesn't have the richness, it doesn't have the affinity you can gauge if you engage with your customers in a different way.

"It is about what do consumers value today, not what did they value historically. So green shield stamps, or points, were a response to what happened post-war . . . I just don't think that is where the world is now."

The comments from Mr Price follow calls from City analysts for Tesco to abandon Clubcard and instead invest in cutting prices. This is despite the fact that Lord MacLaurin and Sir Terry Leahy, two former chief executives of Tesco, have said that the customer data compiled from Clubcard were central to the retailer's rise to prominence from the early 1990s.

Mr Price also said that Waitrose is planning to modernise its stores as part of a new three-year business plan that will begin early in 2014.

Between 10 and 15 major refurbishments are planned for next year, while many other stores will undergo smaller changes.

Price said: "By the middle of next year I think you will walk into a Waitrose store and you will say 'Wow, this is very different'."

Source : Graham Ruddick - The Telegraph
www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10538458/Waitrose-boss-attacks-meaningless-loyalty-cards.html