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When Loyalty Cards Become Average – Pick ‘n Pay’s Smart Shopper Card Proves It April 11, 2011

Posted by warwicksworld in Uncategorized.
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As published in today’s Business Report in The Cape Times.

Pick n Pay’s incentive scheme- So much money for so little.

The recent press coverage that the launch of the Pick n Pay loyalty program received and subsequent letters and replies in Business Report requires further analysis.  R140m later and a decade after first considering a loyalty program and with an acknowledgement by the CEO of Pick n Pay that customers are no longer so loyal, the Smart Shopper card has been launched.


Perhaps some that R140m should have been spent on researching an interactive relationship between Pick n Pay and its customers?

Maybe that’s because for most consumers there is hardly a relationship. We pick the items most attractive to us, we pay, we walk out – and that’s it; the contract is over. As for a relationship the mere fact that we pick you for our next purchase is not something you can control one hundred percent – and loyalty cards can help with that but not when they are clearly just incentive-based programs.

Loyalty cards mean many things to many people.  Marketing executives see them as a route to greater revenue generation and thus probably a necessary evil , customers view it as a way to receive benefits that would otherwise have been unobtainable and everyone agrees that there are too many of them around and to a large extent they all look and feel the same.

The Pick n Pay incentive scheme is definitely not a loyalty scheme.  Here are my reasons.

1) My shopping experience hasn’t improved since the program started. For me to value the ‘benefits’ of accumulating points the total shopping experience needs to be considered and it needs to be above my expectation.

2) My ‘loyalty’ is only worth something if I have my Smart Shopper card with me, failing which I won’t receive any points.  My driver’s license, credit and gym membership cards take preference in my wallet. I have ‘wallet fatigue’, along with every other South-African.  Thereafter it’s a tossup between an assortment of ‘loyalty’ and other cards. And, since when is carrying a card a prerequisite for demonstrating loyalty? Rather give me a barcode sticker that I can put on the back of my cell-phone. That would be different because nobody else offers that option.

3) The relationship is not equal. I have to carry a card all the time and Pick n Pay has access to all my purchase data and what do I get for it?  A mere 1% cash back!

4) There is no ‘wow’ factor at all.  Smart Shopper is not that smart and it feels just like any of the other incentive-come-loyalty programs out there.

It’s 2011 and Pick n Pay needs to realize that they are no longer a ‘Challenger Brand’. Even with a remarkable CSI (corporate social investment) program Pick ‘n Pay has been squeezed by new ‘Challenger Brands’ in the market. Perhaps the real CSI has been missing (Customer Service Initiative or Customer Savings Incentive)?  In a world of ‘Me’ ,’ I’ and   ‘ I want it now’ the Smart Shopper concept represents an amazing opportunity to break from the staleness of other companies’ loyalty programs, and thus the concept may have presented Pick n Pay with an ideal opportunity to pursue their own unique ‘loyalty’ program?   After all, R140m is a lot of money; but put simply, loyalty is built up over a period of time by continuously providing excellent service or benefits, above what is expected or offered by the competition. What was the result? Loads of media coverage and a 1% cash back offer.  Clearly a traditional approach-but not much of an answer to the problem of declining market share; aggravated by less ‘loyalty’ from customers in general.

Smart Shopper could have wowed me but it hasn’t even come close. The technology is available and inexpensive, infinitely scalable and offers amazing potential considering that just about everyone carries a computer (cell phone) with them 24/7. Location based marketing, augmented reality, in store Blue Tooth communications and Mobile SMS vouchers, and sms communications are the way forward.

Here are some examples of how Pick ‘n Pay could ‘wow’ me, and thus retain my loyalty:

Send me an sms voucher for coffee at one of your stores that have in-house coffee shops – just because it’s lunchtime and I’ve just spent R500.  I would be impressed!  How about a thank you by SMS for detecting that I have exceeded my average monthly purchase by 100%?

Ask me if  I want to join an experiential purchase plan- maybe a trip to the 2016 Olympics or even a ticket to a show, or a breakfast  for two  at the Mount Nelson hotel.  Now that would get me going!

Let me know that if I spend a bit more, I’d move up a tier and get more. That would make me feel special.

Tell me by you will reserve red roses for me on Valentine’s Day so that I can avoid stressing about availability and rip-off prices. I would be eternally grateful.

Solve a problem that most of us have from time to time, by removing the need to have to produce a receipt for my defective product – because my Smart Shopper card has all the sales information linked to. Whilst on the subject of defective items in for repair, sms me a web-enabled email link so that I can track the progress of the repair online 24/7. That would save me from stressful on-hold waits with your call centre and save you money.

There is one product that I know of that has an intrinsic cost of 8% of the R80 selling price and it really irritates me every time I buy it. If I could get that information to you easily, that would let me believe I was making a difference-but you haven’t asked for my help or feedback –ever.  If you did that, you would ensure my loyalty.  I would then write on my Facebook page and other social media sites, about how wonderful Pick n Pay is.  I’d tell my friends and work colleagues and you would have my unquestioned loyalty.

Previously published articles have alluded to the UK’s Tesco and other South African companies as benchmarks which Pick n Pay has researched and have tried to emulate. In the process all they have done is add to the ‘loyalty card’ fatigue and not added any differentiation at all. Benchmarking, by its very own definition, is not designed to exceed what is known. In fact, by emulating it, you have just confirmed what average is – and average is no way to get noticed or remembered by your customers.

Traditional loyalty card programs have come full circle, and opportunities exist now for loyalty marketers to reinvigorate their markets. That in itself is tough because traditional marketers are used to ‘top down’ marketing. Engaging and listening does not come easily for non-CRM (Customer Relationship Marketing) trained staff.

Pick n Pay was one of the last majors to launch a loyalty program. It had my attention briefly but it offers nothing new. Excellence, innovation and leading the way has always been a feature of Pick N Pays public persona. That I am afraid has long since disappeared.  Your incentive program is much like an attempt by a learner at school- desperate to be noticed.  I can distinctly hear the desperate pleas of ‘Pick me, Pick me’.

See this an other articles on our website, www.bizassist.co.za

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Comments»

1. Georgina - January 14, 2012

I cant access into my shopper card i think my id number isnt right how can i change it please help?

2. chris raleigh - January 19, 2012

Please could you assess The new ‘sharksfrenzy’ rewards program

available at http://www.sharksfrenzy.co.za I beileve its one of the best if not the best

3. Phillip - May 17, 2012

1% is not a lot but i still have one and got back R300 already so it’s money that i would other wise not had, for every R1000 spend you get R10 back, but for me well i actually get R20 in stead of only R10, how is this possible? just by changing the way i pay at pick & pay for my groceries, pay for airtime, pay telkom or maybe a car fine at pick & pay:) i swipe my shopper card then i swipe with a special card that is linked to pick & pay & another company and thats it R20 in stead of only R10 o and at the end of the year i get R1000 back by being a member of this company, by referring people to buy on our method you will actually make extra cash too buy more groceries, mail me for more info info@bizindex.co.za

4. bethuel setladi - May 30, 2012

May you please send me an information on how to join the smart shopper biz opportunity

5. Jay - November 6, 2012

Loyalty cards are the biggest scam of our time. There primary function is not to reward customers, but to fleece us out of more of our hard earned money. These cards track purchasing trends which are then applied to the pricing of items.
Think back to the pre barcode/scanner era of shopping. Every item on the shelves had a price tag or sticker. If a retailer wanted to increase the price of a particular product, they had to physically re-price every single item by hand. Nowadays its a simple matter of changing one barcode tag on the shelf and a click of a computer and the price is changed.
I shop almost daily now. I purchase in small amounts more often instead of doing a big monthly or weekly shop. I keep track of prices of items I purchase on regular prices. Often I notice overnight price increases of astronomical amounts. Sometimes as much as 40%!
For example, if PnP knows from their data that we voluntarily give them for a measly 1% cash back (which we have to spend in their stores) that 50% of their 2.5kg sugar sales occur on the last five days of the month. Then they increase the price of sugar by say 20% over that period. That means for the month they average 10% more profit from sugar sales (less the 1% they give back to us). Overall they end up winning in a huge way. Apply that logic to every product and we are being ripped off. But we don’t mind because we only see the loyalty points we are getting.
If PnP honestly wanted to reward its loyal customers, they would simply lower their prices.

6. Alabama Rigs - March 13, 2014

Thanks for sharing your thoughts on offshore fishinng lures cheap.
Regards

7. Is Pick 6 Leak Legit - August 16, 2014

Is Pick 6 Leak Legit

When Loyalty Cards Become Average – Pick ‘n Pay’s Smart Shopper Card Proves It | warwicksworld

8. Maya - March 30, 2015

Be careful, this is Warwick himself. You won’t see a cent.


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