Loyalty Program Trends Within Retail

Due to high competition in the industry and high bargaining power for buyers, Loblaw offers loyalty programs including President’s Choice Financial and PC MasterCard, to encourage repeat business. By providing added-value services, consumers can benefit from unique experiences and Loblaw can further differentiate its brand from its competitors.

Loyalty programs include frequent flier miles or points systems associated with credit card offers that can be used only with the original company, creating a perceived loss or cost when switching to a competitor. Most programs are able to get consumers to spend more money just to get to free or bonus item.

Developing a loyalty program is challenging. You team must understand what will keep your current customers interested and what will spark them to purchase multiple times.

Market players generally have a wide variety of potential customers, which considerably weakens buyer power. Although consumers in this industry may be loyal to particular brands or chains, loyalty to retailer brands is arguably less important than competitive pricing. Many supermarkets run rewards programs for frequent shoppers, such as Tesco’s ‘Clubcard’, and these schemes can help companies retain customers and reduce buyer power.

Implementing a frequent shopper program will also help provide high value incentives by initiating a partnership with a program providing loyalty points. Such a

In the loyalty program literature on the FXmedia’s website (http://www.fxmweb.com), FXMedia (2011) states “With intelligent customer segmentation and targeted campaigns, each member of your program can feel like they are customers of their own "personal company", where everything is designed around their lifestyle and purchase behaviour patterns.” (para. 2).

On the technology side of this programs, a data management system would be need to be constructed and maintained in order to keep track of the multitude of customers and their accumulation of “loyalty” points. This data management system would service all of the Kudler Fine Foods stores in ensuring that the all of the data is integrated for new customers, customer information is updated, and that duplicates are prevented. To allow customers to redeem their accumulated “loyalty” points, web servers would need to be set up to assist with the vast amount of data. Also, redundancy of the said servers would need to be implemented in case there is a hardware or software failure. The most important piece of the “loyalty” program is the card itself. It is

Over the decades there were tremendous amount of challenges for every business. Customers have more knowledge, they have more options, and they have higher expectations. Customers are more informed with the humungous development in technology. Having more options in front of them, expectations has surpassed in retail industry. Loyalty is a customer having faith that your organization’s product or services offered is the best for them. It is the process of tapping the buying pattern of customers in a store based on their preferences. Customer loyalty is significant because it is economical to retain the old customers rather than acquiring new customers. So, organizations employ loyalty programs which reward customers for their repeat business.

Kudler Fine Foods founder and manager, Kathy Kulder, has requested information on developing a system to track customer purchases through a Frequent Shopper Program. This Program will award loyalty points for redemption to repeat customers. Purchases made by customers whom participate in the program will be tracked and converted into loyalty points for redemption for future purchase, gift items, and other products or services made possible through partnerships with external companies. The following will cover information and recommendations for Kudler Fine Foods Frequent Shopper

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There are several different rewards programs companies can use and there are pros and cons to all. A company has to know their target customer and has to initiate a way in which to learn about the customer through data collection. Many companies have tried rebate and cash back programs which are relatively simple and avoids the “discount on every purchase mentality” and also doesn’t require much administration to accomplish, but it also does not provide instant gratification and can alienate infrequent shoppers. Discount rewards programs offer simplicity to consumers along with instant gratification, but discounts can imply prices are too high to begin with and can easily be duplicated in the marketplace. The points program is the one which

According Baker M (2000), loyalty schemes is the “Overt attempt of exchanging partnership to build a long term relationship association, characterised by purposeful co-operation and mutual dependence on the development of social, as well as structural bonds with consumer”.

In May ’15 American Express launched a coalition loyalty program called Plenti. Under coalition loyalty programs, members can earn and redeem points by shopping at participating merchants (e.g., Exxon, Macys, Rite Aid and ATT.) The program helps consumers to earn rewards faster and lead to better engagement and provides merchants and opportunity to attract new customers and run cross-promotional campaigns. The biggest challenge in launching the program was signing up merchants and building an economic case for shifting away from proprietary programs and collaborate for collective benefit.

* Customer loyalty program. The company secured a high level of customer loyalty due to its membership program and its general approach to customizing services to the needs of every customers.

In the case of Zara, ‘’its marketing strategy consists of high turnover in which the company usually has ten thousand single items per year running through their stores’’ (Tiplady, 2006). Zara is considering setting up loyalty programs to create a link with its customers