This article first appeared on Global Convenience Store Focus.
The grocery market in Ireland is shared almost equally between three top retailers – Dunnes Stores, Tesco Ireland and SuperValu – a nationwide chain that is owned and operated by the wholesaler group Musgraves. With their market share separated by less than one percentage point, these retailers battle continuously for consumer loyalty, each investing significantly in heavyweight programmes that seek to capture consumer’s attention and change behaviour in a way that can measurably drive their commercial growth.
And while there are some inevitable similarities between the various programmes they operate (e.g they are all points-based programmes), for me, the SuperValu Real Rewards programme is leading the field against its rivals – the VALUEClub programme and Tesco’s Club Card programme. In this article, I’ll showcase some simple but compelling propositions that have been introduced to “Real Rewards” in recent years – perhaps the reason the programme also won the prestigious Retail Food Loyalty Programme of the Year in 2019 as part of the inaugural Irish Loyalty Awards.
It’s an exciting story of innovation and excellence so I’m delighted to reflect on this impressive Irish retailer and hopefully inspire other global loyalty programmes with some insights and opportunities you can consider for growth.
The Simple Stuff
As a points-based grocery loyalty programme, members of Real Rewards collect points on their grocery shopping both online and offline, earning 1 point for every €1 spent. Since the launch of the app in 2016, members have digital access to their account which allows them to:
– View the various personalised offers and discounts available as well as access to exclusive competitions.
– Access their digital Real Rewards card for use/scanning in store – eliminating the need for plastic fobs (although these are still available).
– View their recent transaction history and latest points balance.
– Share their offers and Rewards with friends and family.
Separately the Real Rewards website allows members to manage their account, as well as printing off their money back (rewards) vouchers and product coupons at home.
Rewards vouchers are issued by post 3 times per year for members who have collected at least 250 points. Those points are converted into a €2.50 Money Back Voucher (a 1% reward) to be used in SuperValu or converted to a 250 point voucher to be used with partners. While these redemption vouchers are valid for twelve months, they typically drive immediate spend as they are issued at key shopping times of the year such as Christmas when customers really need and value them, and the increased footfall creates a truly virtuous circle for the brand.
In addition, the mindset of rewarding their customers so frequently ensures the programme is kept top of mind with consumers, and avoids a longer-term liability of points on the company balance sheet.
The Clever Stuff
Alongside their own earn and burn programme for grocery loyalty, SuperValu customers were keen to find other ways for their loyalty to be rewarded. Unlike other markets, Ireland does not have a coalition programme (such as Nectar in the UK), hence the opportunity was clear to track and reward consumer behaviour across other key areas of consumer’s lifestyle spend. And with a powerful loyalty brand and extensive platform already fully built, SuperValu took the genius step of positioning themselves as the default leader of Ireland’s loyalty landscape, selecting a range of both online and offline retailers as partners. With almost a quarter of the Irish population registered, SuperValu can effectively promote these partners to its 1.2 million programme members, allowing them to earn Real Rewards points when they shop online with hundreds of major brands, or buy electricity, phone packages, insurance or staycations.
While the points earned varies by partner, Irish consumers can evaluate the opportunity in each category as their needs arise. All five partners below are premium market-leading brands with whom customers can earn Real Rewards. In addition to earning with these utilities, Electric Ireland, eir, and also Aer Lingus are offered as redemption/reward partners.
Payment Card Partnership
The latest exciting announcement from SuperValu is a partnership with Visa – a simple, clear and compelling offer of double points for customers when they pay with Visa – whether that’s by debit card or credit card. Described as the “first of its kind” it shows a clear intention by Visa to grow its market share, while ensuring significant revenue potential for SuperValu, with Visa payments representing 1 in 3 of every payments made in the Irish market! While the commercials will clearly never be available externally, the partnership does truly benefit both partners and drive mutually-beneficial behaviour.
Why Sell Loyalty Points?
Given the time and effort already required to successfully manage a loyalty programme, it seems even more challenging for SuperValu to extend beyond their core business and begin to invest in serving the loyalty objectives of large consumer brands such as the utilities outlined above, so why would the team at SuperValu decide to invest in this new business model? Because of the massive potential for incremental profit and marketing access beyond their own base.
- In many industries – particularly airlines, loyalty points are hugely profitable, often more profitable than their core business of flying. With loyalty point margins nearly ten times higher than flight revenues, it is a real opportunity for programme operators to offer non-competing businesses an easy way to reward their customers using your currency. Qantas airlines reportedly sells each point for between 1.1 cent and 2.5 cents, commanding loyalty revenue of $809 million in 2018 from many hundreds of partners across every possible category imaginable.
- One of the main challenges of coalition programmes such as Nectar is that an independent third party owns and controls access to your customer data. In mutually-beneficial partnerships, while transaction data or personal insights cannot be shared due to GDPR legislation, brands can market their partnership to their customers on both sides, offering each base an opportunity to access new customers with tempting rewards from a currency they already trust.
SuperValu’s commitment to innovation is clear as the brand that launched Ireland’s first grocery shopping app in 2013. With continued investment in their digital strategy supporting record revenues and a new overall sales milestone of €2.724 billion in 2018, which included an impressive additional 26,000 new customers buying online, the whole business is truly achieving hugely impressive results.
As this fantastic business continues to grow and thrive, and its parent company employing over 41,000 people, I’m certainly excited to watch their ongoing innovations in loyalty and sharing those insights with you, our readers worldwide.
Liquid Barcodes is a leading global loyalty and digital marketing technology company specialized for the convenience store and foodservice industries. Our proprietary cloud-based technology platform allow retailers to create and manage their digital marketing campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers activities in real-time across digital and media channels.
How we do it:
We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.
Retailers use our self-service dashboard to create and manage loyalty driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.
One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.
Check out some of our exciting/proven results here:
Chief Content Officer, Liquid Barcodes and Independent Loyalty Consultant
With over twenty-five years marketing experience, I specialise in loyalty marketing consulting, managing consumer loyalty propositions, strategy and operations. In addition to working with Liquid Barcodes, my clients have included Telefonica O2, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer, as well as Avios – the global points currency for some of the world’s top airlines. I am also a judge for the Loyalty Magazine Awards.