Supermarket loyalty schemes provide retailers with an enormous amount of customer infomation. Data gathered allows retailers to match their product offerings with current buying patterns. The customer benefits from loyalty schemes as well, accumulating points and redeeming them for money-off against shopping. Alternatively, she can opt for offers at a whole range of different retailers. In many respects it is a "win-win" situation, with supermarkets obtaining up-to-the-minute, individual purchasing information and the customer getting back rewards for loyalty.
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When you join a supermarket loyalty scheme you receive a card, rather like a credit card. Each time you shop your card is swiped and points are added to the card. For example, Sainsbury's uses the Nectar card scheme, and each time a customer accumulates 500 points she receives £2.50 (at the time of publication). The supermarket customer can usually use the points to get a discount at the store or redeem the points for "prizes". These can be luxury items, such as air miles or spa treatments. The customer with a loyalty card is spending the same amount as the non-cardholding customer but getting some rewards back for staying with the same store.
The organisers of loyalty schemes can analyse a customer's data and offer targeted promotions. For instance, if a busy mum with three young children is buying a certain brand of cereal each week, the promoters can write and offer alternatives. In this way, promoters can offer customers based on their previous shopping history, tastes and brands.
The data that supermarkets collect from their loyalty schemes help them gather information on product trends. If they see that mango-flavoured yoghurt is racing off the shelves they can alter their buying policies. For example, early signs that more customers were buying organic products, prompted major UK supermarkets to extend their organic lines in stores. This information helps all customers because supermarkets can provide a more targeted, relevant product selection.
Loyalty customers can enter special promotions, surveys and competitions to add to their points' tally. These are usually online and take minutes to enter. In this way the loyalty customer base becomes a "community" of shoppers. Some of the supermarket loyalty schemes offer mobile phone apps and points calculators. The customer can plan on buying certain "bonus" purchases or browse the online store for possible rewards. Some customers save their points to buy food and drink at expensive times of year, such as Christmas.
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