Liquid Barcodes


Principles, Promises and Challenges of Coalition Loyalty

Paula Thomas, Chief Content Officer, Liquid Barcodes


A fascinating feature of most loyalty eco-systems worldwide, with the notable exception of the USA, is the popularity of coalition programmes such as Nectar in the UK, Real Rewards in Ireland and the Payback programme in Germany, as well as more recent examples such as Wiiv Rewards in Mauritius and Yuu Rewards in Hong Kong, which we wrote about here.

With the UK so often considered to be one of the most advanced loyalty markets in the world, we’re today discussing some of the key success factors that coalition programmes need to succeed, and what they deliver for partner brands and consumers.

Nectar boasts some impressive numbers, with 18 million active members (in fact 65% of the total UK adult population claim to be members) and an impressive partner portfolio that covers most segments of everyday spending such as Sainsbury’s for grocery customers, Esso as a fuel partner, eBay and Argos catalogue stores (one of the largest high street retailers in the UK), as well as hundreds of others.

And for consumers, it’s this breadth of coverage that is so appealing. Rather than needing to join, understand and maintain multiple loyalty memberships, their monthly spend can be aggregated into one single account and card. Simple proposition. Yet not at all simple to deliver.

Nectar's Key FiguresNectar’s Key Figures

A Brief History of Nectar

Nectar was launched in 2002 as a single programme that replaced and merged the existing loyalty programmes of Sainsbury’s, BP and Barclaycard as well as the high-street fashion brand Debenhams which did not have an existing scheme at the time. It boasted extra-ordinary loyalty industry expertise, being run as an independent company by the “Loyalty Management Group”, which at the time was chaired by Sir Keith Mills, the founder of Air Miles.

Five years later in 2007, Nectar was acquired by AIMIA (previously known as Aeroplan) for £368 million, and more than a decade later by Sainsbury’s itself for just £60 million, with the following explanation:

“The deal will give Sainsbury’s unparalleled access to consumer habits within both Sainsbury’s stores and other operators….allowing it to refine product offerings, pricing and marketing.”

It’s a fascinating insight on the value on consumer data and also the challenges for loyalty programmes to access that data effectively within a coalition framework.

The Nectar Card

The Nectar Card is one of the most popular loyalty cards in the UK 

Coalition Loyalty

As mentioned above, consumers love combining all of their typical monthly household spending into one single loyalty programme. This includes their grocery budget, their fuel spending and banking, as well as less frequent but more aspirational categories such as travel and fashion. For consumers, the key benefits of a single loyalty programme include:

  1. Simplicity – customers only need to register and manage one programme, with one card or app, and one account to monitor and understand.
  2. Speed to reward – customers are often frustrated when it takes a long time to earn a reward. A coalition like Nectar ensures consumers enjoy both variety and momentum from the partners – and this often means that they consciously behave in ways that help them reach their points and rewards goals more quickly.

For brands, the key benefits include:

  1. Access to data outside their own business. This helps brands understand their customers even more, and also enjoy the permission needed to acquire new customers of a similar profile from their partners in non-competing sectors.
  2. In the past, loyalty technology and operational costs were extremely complex and expensive. Few platforms existed that could support the needs of large enterprise businesses, and the communications costs to send direct mail to members were often prohibitive, so a coalition programme allowed these costs to be shared between partner brands.

The Payback app

The Payback app in Germany is used even more than Whatsapp 

Trends in Coalition Loyalty

  1. More and more brands prefer to bring loyalty in-house rather than trust a third party to create access and connect with customers. Some examples of this include British Gas (they left Nectar in 2015), BP (left Nectar in 2019 after a sixteen-year partnership) and Homebase UK which decided to focus on a discount strategy rather than investing in any loyalty programme. Even Aeroplan, the loyalty programme of Air Canada was re-acquired by the airline after attempts to build its own programme proved challenging.
  2. As technology solutions become more agile and affordable, and communications have become digital, there are fewer reasons to navigate the complexity of multi-brand marketing agreements in order to connect with their customers. Many of the latest coalition programmes are launched by conglomerates who own multiple companies across a variety of sectors. For example, Yuu Rewards in Hong Kong is owned by Dairy Farm International and operates grocery, pharmacy, retail and hospitality brands, and this simplifies the process and likelihood of forming mutually beneficial partnerships. They only partner externally in sectors they don’t operate themselves (eg banking).
  3. Brands are looking to their partners to help increase the value of points to their programme members. For example, Nectar points when used in Sainsbury’s are worth 0.5p (half a penny), so 1,000 points give £5 off a shop if they redeem them there. However, through a partnership deal with Pizza Hut, 1,000 Nectar points could get you a free pizza (usually worth over £13) so the customer’s experience of the Nectar programme is significantly enhanced. This strategy works well when a higher-margin business is also focused on customer acquisition and can fund tactical campaigns without incurring long-term points liabilities on its balance sheet.

Future Focused

As consumers seek simplicity, and greater points liquidity (or ease of use), there is potential for growth in coalition programmes, however, the trend towards owner/operator such as Sainsbury’s Nectar programme seems to be the most obvious model for multi-partner programmes in the future. By eliminating the overheads of an external programme operator with its own profitability objectives, partners can focus on adding value for members, allowing membership and engagement levels to flourish.

nectar logo

About Us:

Liquid Barcodes is a leading global loyalty and digital marketing technology company specialising in the convenience store and foodservice industries. Our proprietary cloud-based technology platform allows 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:

About Me:

Paula Thomas

Chief Content Officer, Liquid Barcodes and Host of “Let’s Talk Loyalty” Podcast

With over twenty-five years of marketing experience, I specialise in loyalty marketing content. In addition to working with Liquid Barcodes, my consulting clients have included Telefonica O2 Priority, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer Group (UAE), as well as Avios – the global points currency for some of the world’s top airlines. I am also a former judge for the Loyalty Magazine Awards and proud host of the “Let’s Talk Loyalty” podcast – the industry’s first podcast for loyalty marketing professionals.


Blog post

5 Cs of Summer: Cold Coffee, Clean Cars & Convenience

Subscription programs are a great way to secure long-term customer loyalty and revenue. Whether you are providing a subscription for beverages or car washes, securing recurring monthly revenue is imperative to stay competitive.   Summer is around the corner and retail marketers are crafting sunny campaigns to increase customer traffic to the store. Help those […]

Blog post

Circle K Makes a Splash With Car Wash Subscription Program in Europe

Circle K has extended its highly successful car wash subscription program to Norway after successful implementations in the United States, Canada, Denmark, Sweden and Estonia. Circle K’s vast global network of car washes has digitally transformed operations with its revolutionary car wash subscription program. First launched in Denmark and the U.S. in 2020, the program […]

Blog post

Newly Redesigned Brezelkönig App Accepts Payments and Rewards Loyalty

Swiss foodservice chain Brezelkönig releases app update which offers customers the convenience of earning rewards and paying for products with the app in stores.  The recently-updated Brezelkönig app allows pretzel-loving customers to enjoy recognition and rewards for their loyalty. Additionally, the Brezelkönig app accepts payments to make the customer experience even more convenient.  Brezelkönig is […]

Blog post

Sunshine Gasoline Introduces ACH-Only Mobile Payment for Fuel

Florida convenience retailer releases fuel payment app accepting only ACH payment, saving thousands in payment processing fees for the retailer. Sunshine Gasoline upgraded its Max Carwash App to Sunshine Brand featuring a special fuel pay program, powered by C-StorePay by Liquid Barcodes, which allows consumers to conveniently pay for fuel using the app. Customers simply […]

Blog post

2022: An Outstanding Year for Liquid Barcodes and Our Customers

In 2022, Liquid Barcodes witnessed a year of unprecedented growth with customers, products and team members. Every great business has an inspiring founding story and Liquid Barcodes’ 10-year journey is inspiring the future of loyalty. Beginning as a startup in Norway, the company opened its second office in the United States in early 2022 and […]

Blog post

What Is C-StorePay?

Liquid Barcodes’ proprietary C-StorePay makes paying for fuel, in-store merchandise, and subscription programs convenient for customers, reduces credit card fees for retailers, and integrates easily into existing loyalty programs Announced in October 2022, the revolutionary Liquid Barcodes C-StorePay product rose to the top of retailers’ 2022 wish lists at the NACS Show, even achieving a […]

Blog post

Polish Retail Leader Żabka Launches Coffee Subscription Program

Polish retail giant, Żabka introduces a monthly coffee subscription program across its vast store network. With its new coffee subscription program, Żabka Polska will certainly dominate the beverage category in Poland’s unique convenience market. In July 2022, Dr. Adam Manikowski, Managing Director of Żabka Polska, was featured on the popular Global Convenience Store Focus video […]

Blog post

Loyalty Apps Engage Customers

98% of loyalty app users love using a loyalty app and want more features from it. In September 2022, NACS published a report examining customer engagement with convenience loyalty programs. Unsurprisingly, customers feel most engaged, appreciated and valued by the stores to which they belong in a loyalty or membership program – nearly ¾ of […]

Blog post

Save Thousands in Credit Card Fees With ACH

Visa and Mastercard announced an increase in interchange fees earlier in the year and retailers are taking action and sending a message by migrating their customers to new solutions, including mobile app-based ACH payments, and in the process increasing profits by not only reducing credit card fees but also boosting loyalty via innovative app-based incentive […]

Blog post

Maxol Launches First-of-Its-Kind Loyalty App

Maxol, Ireland’s largest family-owned forecourt and convenience retailer, announced it has launched a new customer loyalty app with never-before-seen features in the Irish market. After more than a century serving Irish customers, Maxol’s 240+ stores and service stations are located throughout Ireland and have enjoyed global recognition for their best-in-class operations, store design and offers. […]

Blog post

Delivering Personalized Content With Machine Learning and Image Recognition

Build personalized customer connections, improve efficiency, and make intelligent, data-driven decisions using machine learning and image recognition.   It’s 7:15 in the morning and a customer – Amy – is on her way to work. She is on the hunt for coffee and breakfast and stops at a convenience store. She opens her store app […]

Blog post

Circle K’s Use of Beacon Technology to Activate Car Wash Subscription Program

Beacon Technology and Car Wash Subscription Programs Beacon technology used in tandem with a customer-facing car wash subscription program revolutionizes the customer experience by providing a quick, convenient experience. Innovation is the key to continued growth and ensuring a frictionless customer experience should be top of mind for any retailer. Circle K’s vast global network […]

Liquid Barcodes

Put a rocket under your loyalty program

With our loyalty platform, we help design and operate world-class, tailor-made subscription and reward programs that make sure your customers always come back.

Book a Demo →

We are trusted by global brands.

Convenience retailers all over the world have engaged and rewarded consumers with our tailor-made loyalty programs.

To our case studies →

Liquid Barcodes
Liquid Barcodes
Liquid Barcodes
Liquid Barcodes

Convenience retailers all over the world have engaged and rewarded consumers with our tailor-made loyalty programs.

To our case studies →

Liquid Barcodes
Liquid Barcodes
Liquid Barcodes
Liquid Barcodes