Booker Loyalty Gamechanger

Booker Wholesale may just have launched what could be a total gamechanger in independent convenience retail. A trial of a Tesco Clubcard-like loyalty scheme in selected Premier, Londis and Bugden stores. Whether it’s Pret a Manger or Wickes, we consumers are adopting store loyalty schemes in ever increasing numbers. The concept of loyalty varies across different sectors. Banks, insurance companies and energy providers don’t seem to care much for rewarding loyalty. Preferring instead to incentivise new customers. As opposed to retailers who are driving hard down the loyalty route to retain and reward their shoppers.? The Grocer recently published an article “Shoppers give thumbs up to loyalty pricing”. (25th May). In it they detailed the findings of research they commissioned - conducted by Toluna & Harris Interactive into customer loyalty schemes. The research found that the instant discounts available with some loyalty card membership schemes are now more than twice as popular as the nearest loyalty card benefit with 54% of shoppers saying it was the most important quality they looked for in a loyalty card. The research was partly inspired by the impact of loyalty pricing on the Grocery 33 weekly competitor pricing survey with discounts increasingly enabling retailers to undercut rivals.

Tesco was first to move with Clubcard prices during the pandemic. Their scheme has since grown to include some 8,000 lines and attract a membership of around 21 million. It was extended to their Express convenience format last year. Others have followed. Notably Sainsbury’s with Nectar pricing offering 6,000 lines and Asda, Co-op, Morrison’s. Industry commentators have attributed Lidl’s leading market share growth to the power of their loyalty app, with a recent focus on driving fresh bakery sales. The Grocer article is rich in insights and well worth a read. Interesting to note that 82% of respondents stated that they used the loyalty card every time they shopped. And that 60% preferred to use the loyalty scheme on their mobile device.

As reported by Alex Yau in Better Retailing (29th May) Booker has teamed up with EPOS provider Shop Mate to power their scheme. Initially it will form a pilot running for 12 weeks and involving 20 selected independent stores. The retailers’ customers will receive physical cards for the trial period. The scheme encompasses 40 to 50 eligible household and grocery items. Tobacco, vapes and alcohol will not be included. Customers will receive 1p cash reward for every ￡1 spent. Presumably Booker will evaluate the scheme after 12 weeks and determine whether to scale it up. Early reports from retailers appear to be very positive with “fantastic” demand and upticks in customer visit frequency.

Subject to success and operational issues this could be the platform for the launch of an absolute gamechanger in the independent convenience sector. A killer competitive advantage for Booker. To attain this edge, the scheme would have to be national, mobile device enabled and with a discount price offering capability like the larger store groups. Interconnectedness across wholesale, retail and consumers and the potential value of the data is the holy grail. This is what wholesale is all about. Providing the means and the tools to help their business customers thrive in a highly competitive market. ?It is an exciting prospect and one to watch.

? David Gilroy 2024