The scheme is getting more personalised. Is that what shoppers want?
If Waitrose was hoping to generate buzz earlier this month with its promise of a loyalty scheme reboot “in the coming weeks”, it will have been sorely disappointed.
Rather than getting excited by the promise of more personalised offers, Twitterers – and headlines – slammed the termination of Waitrose’s offer of a free newspaper for loyalty customers spending £10 in store. One typical Twitter user said it had already “lost my loyalty”. Another added: “I used to walk down to Waitrose a few times a week for top ups and the free newspaper was a real bonus, now the local Tesco will do just fine.”
This week Waitrose finally unveiled details on how MyWaitrose is changing, ahead of the relaunch on 23 February.
So why did it drop the free stuff (the tea/coffee was halted in 2020 for health & safety reasons)? How has it changed the scheme? And will it work better and overcome sceptics?
It’s clear there were a number of issues with the scheme. Despite the apparent love for the free paper, only 5% of members took advantage of it, according to Waitrose. And its research points to wider limitations: members receive a quarterly booklet of personalised (paper-based) voucher offers, but only half found the offers relevant.
The research also showed 91% would like discounts based on items they buy most as opposed to the 57% who preferred coupons for products selected by Waitrose.
Bryan Roberts, founder of Shopfloor Insights, says the voucher system was actually more generous towards disloyal shoppers, because it gave every MyWaitrose cardholder the same rewards regardless of how frequently they shopped.
The new scheme – which Waitrose says is its biggest customer value investment in over 10 years – has two major changes: the range of weekly offers will cover 15,000 product lines (up from only 50 previously); and replacing the quarterly booklets will be weekly personalised offers, redeemed now via the membership card/app. Both now will make offers based on products shoppers buy the most. There will also be exclusive, one-off savings, such as a 20% discount across all food counters in the first month.
Deals on more lines
But Waitrose has said little about how it has improved personalisation, and Roberts suspects it still isn’t using data “half as intelligently as Tesco is through Dunnhumby or Sainsbury’s with Nectar360”.
Early trials certainly suggested teething problems at the very least. One customer, a participant in trials of the revamped scheme Waitrose began running last year, was offered 20% off caviar products. With prices ranging from £19.99 to £125 it was “absolutely not in my budget”, she said.
Poorly chosen personalised deals can actually result in “disloyalty”, according to Grocery Insight CEO Steve Dresser.
Sentinel Management Consultants CEO David Sables agrees that they can “irritate the hell out of loyal customers”. The challenge is nailing the data-led “sweet spot”, in which lies deals on products that are not already in the basket but which recognisably complement those that are. Like “suggesting mustard when the shopper’s bought steak”.
It’s hard to say how well it goes down until it lands next week but against a backdrop of soaring inflation, Waitrose needs to “do a lot more than provide a few personalised discounts”, warns retail analyst Nick Bubb. Even well-off Waitrose customers are unlikely to “ignore forever the fact they are being charged so much for their weekly shopping”, pointing to a recent Which? report that found grocery prices at Waitrose have risen more than three times faster than at other supermarkets.
Roberts worries that for Waitrose shoppers there is more to value than prices. They know its prices are “out of line with the rest of the market and always probably will be”.
“My worry is availability, service and experience have declined relative to rivals. A premium price is great if you’re getting a premium experience, and I no longer believe that’s necessarily the case with Waitrose.”
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