Morrisons to introduce new loyalty scheme

Morrisons is to trial targeting consumers with personalised offers after seeing the impact the lack of data-driven loyalty scheme like Tesco’s Clubcard and Sainsbury’s Nectar had on its sales over Christmas.

morrisons
Morrisons plans data-driven offers scheme to overcome lack of loyalty card.

Speaking in a call with analysts today (9 January), shortly after reporting like-for-like sales over the Christmas period dropped 5.6 per cent, Morrisons CEO Dalton Philips said the retailer’s “lack of capability to tailor offers” was one of the reasons it did not see the seasonal uplift in footfall that usually occurs.

He added: “In an increasingly sophisticated and data driven market [the Morrisons Christmas Collector card] is just not as effective as it was when we launched it five years ago…we have been investing strongly in our systems and we are now in the position to begin trialling a different mechanism to offer innovative and personalised incentives.”

Morrisons will begin the first trial of “communicating one-to-one” with customers within the next six to eight weeks and the supermarket aims to be able to offer all customers personalised rewards by next Christmas, with the initiative replacing the Collector Card.

In response to a question from Marketing Week about how the new programme will differ from other loyalty schemes in the market, Philips said: “We have 12 million customers and we need to be able to communicate with them more effectively. Consumers today expect that they can talk to you more directly and that you can personalise specific offers to them and that’s what we are working on and will be trialling in the coming weeks and months.

“There will be an effective mechanic to substitute the Collector Card going through to Christmas 2014.”

Morrisons is also hoping the launch of its online offering – with the first deliveries starting tomorrow (10 January) – and its planned roll out of M Local stores, bringing its total convenience store estate to 200 by the end of the year, will brighten the outlook for its Christmas 2014 sales.

On a separate media call this morning (9 January) Tesco CEO Philip Clarke said the Clubcard loyalty scheme helped the supermarket “work a bit harder” than its rivals by being “absolutely targeted to consumers”. Tesco reported a 2.4 per cent decline in sales in the six weeks to 4 January, but did perform well online. 

He added: “We continue to do what we think is the right thing for our customers. What we really did over Christmas was we used our data to help us target incentives to the right customers – our most valuable, our most loyal, our most important – and to make sure that overall we had the right price for customers. It’s a multichannel strategy for Tesco not just a price or a promotion strategy.”

Earlier this week Sainsbury’s CEO Justin King trumpeted the supermarket’s Nectar loyalty programme as a “key part” of its success over Christmas, with customers redeeming £120m worth of points at the supermarket over the festive period, up 9 per cent on the previous year. 

Sainsbury’s reported a 0.2 per cent increase in like for like sales in the 14 weeks to 4 January. 

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