Woolworths rejigs loyalty scheme, again

Sue Mitchell
Aug 22 2016
AFR
Woolworths has rejigged its customer loyalty program for the second time in 10 months, scrapping Woolworths Dollars for Woolworths Points and reintroducing Qantas Frequent Flyer points.
Under the new scheme, which starts on August 31, members will earn rewards on every dollar they spend in Woolworths’ supermarkets, BWS liquor stores and, for the first time, Caltex Woolworths fuel outlets.
Points can be redeemed for cash off shopping bills, banked for Christmas, or converted to Qantas Frequent Flyer points at a rate of 870 Qantas Points for every 2,000 Woolworths Points.
Under the current scheme, which was introduced last October, members could only earn rewards on a small range of orange ticketed products – triggering complaints from customers that they were earning far less than they were under the original scheme and could no longer collect Qantas Frequent Flyer points.
An analysis by The Australian Financial Review earlier this year found the average earn rate was just 0.5 per cent, less than half the 1.25 per cent earn rate that Woolworths promised when it launched the new scheme.
Hasn’t helped sales
Analysts believe the poorly structured and executed program has contributed to weak like for like supermarket sales, which have been falling for four consecutive quarters.
Woolworths also struggled to convince suppliers to participate in the scheme and fund rewards because of the poor consumer response. Many customers stopped swiping their cards, depriving Woolworths of crucial data.
Woolworths chief executive Brad Banducci conceded in February that the program had fallen short of expectations and promised a review.
Unveiling the new program on Monday, Woolworths’ director of loyalty and customer data, Ingrid Maes said Woolworths had taken on board customer feedback.
“We are pleased that our members have responded positively to automatically getting money off their shopping. However, we’ve acknowledged that we didn’t deliver enough orange ticket offers in-store and while many of our members have been rewarded well, too many have not,” Ms Maes said.
“By introducing a guaranteed reward per dollar spent at Woolworths supermarkets, BWS and selected Caltex Woolworths sites, all members receive a reward when shopping with us.”
More changes to come
“This isn’t the end of improvements to our loyalty program. We’ll continue to listen to our members and introduce new, attractive features to evolve the program in line with member preferences and feedback,” she said.
Under the new scheme, members will be able to earn double points on a range of essential household categories, including fresh fruit and vegetables, fresh meat, deli and seafood products.
Members will automatically get $10 off their shopping bill each time their points balance reaches 2,000 Woolworths Points, or they can choose to bank the savings for Christmas.
After almost abandoning direct email offers over the last few months, Woolworths will also make more personalised offers based on what members are already buying.
“Overall, we are confident these changes will be well received by our members,” Ms Maes said.
The chief executive of Qantas Loyalty, Lesley Grant, said the improvements to the program would be well received by its 11 million members.
“Qantas is very pleased to continue its relationship with Woolworths and to give our shared customers more ways to be rewarded when they spend,” Ms Grant said.
“The ability to earn with every dollar spent, plus special offers to earn more, will really help Frequent Flyers grow their points balance, so their weekly shop helps them get closer to their next holiday.”
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