Morrisons to introduce new loyalty scheme

Morrisons is to trial targeting consumers with personalised offers after seeing the impact the lack of data-driven loyalty scheme like Tesco’s Clubcard and Sainsbury’s Nectar had on its sales over Christmas.

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Morrisons plans data-driven offers scheme to overcome lack of loyalty card.

Speaking in a call with analysts today (9 January), shortly after reporting like-for-like sales over the Christmas period dropped 5.6 per cent, Morrisons CEO Dalton Philips said the retailer’s “lack of capability to tailor offers” was one of the reasons it did not see the seasonal uplift in footfall that usually occurs.

He added: “In an increasingly sophisticated and data driven market [the Morrisons Christmas Collector card] is just not as effective as it was when we launched it five years ago…we have been investing strongly in our systems and we are now in the position to begin trialling a different mechanism to offer innovative and personalised incentives.”

Morrisons will begin the first trial of “communicating one-to-one” with customers within the next six to eight weeks and the supermarket aims to be able to offer all customers personalised rewards by next Christmas, with the initiative replacing the Collector Card.

In response to a question from Marketing Week about how the new programme will differ from other loyalty schemes in the market, Philips said: “We have 12 million customers and we need to be able to communicate with them more effectively. Consumers today expect that they can talk to you more directly and that you can personalise specific offers to them and that’s what we are working on and will be trialling in the coming weeks and months.

“There will be an effective mechanic to substitute the Collector Card going through to Christmas 2014.”

Morrisons is also hoping the launch of its online offering - with the first deliveries starting tomorrow (10 January) - and its planned roll out of M Local stores, bringing its total convenience store estate to 200 by the end of the year, will brighten the outlook for its Christmas 2014 sales.

On a separate media call this morning (9 January) Tesco CEO Philip Clarke said the Clubcard loyalty scheme helped the supermarket “work a bit harder” than its rivals by being “absolutely targeted to consumers”. Tesco reported a 2.4 per cent decline in sales in the six weeks to 4 January, but did perform well online. 

He added: “We continue to do what we think is the right thing for our customers. What we really did over Christmas was we used our data to help us target incentives to the right customers - our most valuable, our most loyal, our most important - and to make sure that overall we had the right price for customers. It’s a multichannel strategy for Tesco not just a price or a promotion strategy.”

Earlier this week Sainsbury’s CEO Justin King trumpeted the supermarket’s Nectar loyalty programme as a “key part” of its success over Christmas, with customers redeeming £120m worth of points at the supermarket over the festive period, up 9 per cent on the previous year. 

Sainsbury’s reported a 0.2 per cent increase in like for like sales in the 14 weeks to 4 January. 

Readers' comments (10)

  • I think the Christmas collector card is not good for people who only shop once a fortnight as I do and if you started shopping weekly to achieve this then I personally feel I would be spending more which of course is morrisons aim, sainsburys periodically send vouchers through the post for £4 off a £20'spend which for me is more realistic,

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  • For people who shop regularly and not in quantity do not benefit from the Christmas collector Card, or also people who do not have families will not spend over £40 per week so do not benefit either.

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  • I liked the collector card in the run up to Xmas, but the xmas savings stamps are now old fashioned and force you to spend the whole amount in one go. Plasic saver cards as Asda provide allow you to spend small amounts frequently over Xmas. Loyalty incentive would keep me regularly at Morrisons if it could compete with Tesco and Sansburys.

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  • So, they do this at Morri after seeing the advantages Tesco enjoys by having a Loyalty system?

    The cost of having a loyalty system is huge. To buy customers who are already in their shops. Tesco's Christmas performance is hardly stunning is it, yet it apparently knows what it's customers want and when. Not only that but Tesco should know what it's customers might not realise they want (through the huge data collected, they should be able to target and suggest ideas that appeal)

    So why doesn't it work? Why does the World's largest retailer not do it?

    Personally speaking, I know my sister, my Mum, my Dad, my best friend... I know them so incredibly well, and I have collected data in my head about them for years, even decades. Yet I still struggle to know what to buy them for Christmas and birthdays.

    The people paying for the loyalty scheme will be Morri's customers. If the store and online experience was great, and prices competitive, what would the need for a loyalty scheme be?

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  • I would welcome loyalty points as I cannot get to shop every week for the christmas scheme...I willwelcome the delivery service can't c ome soon enough

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  • I pop into morrisons regularly at least 4 times a week but rarely spend more than £15 at a time. I prefere to pick up fresh groceries as I need them, so some kind of loyalty scheme would be great.

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  • the loyalty card shuold be run the same way as tescos i do a big shop once a fortnight and im unemployed- the points i would save up and get food for christmas and new year i have a morrisons shop very near me

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  • A loyalty card that works the same as the Tesco one is a great idea for me :)
    I have always shopped at Tesco but have really gone off it has the shelf life of a lot of things is very short! Tesco is also convenient to me as I have to go across town to Morrison's but now feel it is worth it :)

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  • I like Morrisons, its not loyalty cards and schemes they need it is more stores. I would shop there week on week if they just had one near me. You see an Asda and a Tesco on every corner, where there is no big supermarket there is a Tesco Metro or an Asda where Netto used to be. Morrisons? Not for miles. Just make the stores more accessible or ramp up the online shopping - oh hang on fewer stores in some areas means inability to fulfil online orders......I see a vicious circle............

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  • I love the tesco loyalty scheme, I visit Morrissons every week and spend between £10 and £25 . I used to also visit once a month and spend between £100 and £200 and have to get a taxi home , I have never benefited from the XMAS scheme so I now get my big shop from tesco delivered and that's cheaper than a taxi , and I also get points which I save up

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