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Woolworths launches new rewards program to mixed reaction

Woolworths has announced that it is making significant changes to its loyalty program beginning Wednesday 28 October. The old ‘Everyday Rewards’ program saw customers collect points, which could then be traded for a number of rewards, including frequent flier points with QANTAS. The new program, called ‘Woolworths Rewards’ will instead offer customers the chance to earn $10 off their shop.

The company published the following press release on Sunday 28 October.

Woolworths today announced it will launch a revitalised loyalty program, ‘Woolworths Rewards’, enabling members to earn $10 off their shopping at least twice as fast as its major competitor’s loyalty scheme. [1]

The program delivers a multi-million dollar increase in rewards beginning Wednesday, 28 October 2015.

Woolworths has said it will not be beaten on price and Woolworths Rewards takes things a step further, offering members an opportunity to save even more money off their shopping.

Woolworths Food Group Managing Director, Brad Banducci, said: “Woolworths Rewards is totally re-inventing our loyalty program, putting our customers’ needs first.

“Woolworths Rewards gives customers money off their shopping, fast. The beauty of the program is customers just shop as normal and the rewards look after themselves. It’s 100 per cent relevant to 100 per cent of our shoppers, totally automatic and hassle free.

“Customers are increasingly value conscious and when it comes to loyalty. Sixty-eight per cent say they want money off their shopping, while only 9 per cent prefer a points scheme.[2]

“Our customers also want relevant offers, tailored to them, from their supermarket loyalty program. Woolworths Rewards will ensure they receive many more offers on products they know and love or are likely to try.”

Research shows the majority of supermarket shoppers think it takes too long to earn enough points in loyalty programs to redeem rewards in points-based schemes.[3]

Woolworths Rewards is not a points-based program. Customers earn ‘Woolworths Dollars’ in participating Woolworths Supermarkets and BWS stores when they buy any of a huge range of items marked with an orange ticket across virtually every product category, encompassing a wide range of brands. When customers buy those items, Woolworths dollars will be added to their Woolworths Rewards card at the checkout. Upon their Woolworths Dollars balance reaching $10, that amount will be taken off their next shopping bill.

The Australian Consumer, Retail and Services (ACRS) research unit at Monash Business School analysis says current Woolworths’ loyalty members typically will see more than double the value through the revitalised program. They will also immediately benefit from many more relevant, targeted offers and continue to receive Woolworths’ popular 4 cents-a-litre fuel discounts.

The ACRS analysis confirms that a typical shopper spending $108 per week could now earn $10 Woolworths Dollars to take off their shopping in just over seven weeks. That is at least twice as fast as in the major competitor’s core program. Those with spending patterns consistent with a family will typically achieve $10 off their shopping in under six weeks and typical senior couples will take under seven weeks.

Modeling from the ACRS confirms the typical shopper need only purchase just under $4 worth of items with an orange ticket out of their entire shop each time to receive their $10 at least twice as fast as the major competitor’s loyalty scheme.

Offers will be focused on commonly purchased items, meaning the typical shopper will achieve this rate without any change to their usual purchases. If they choose more orange-ticketed items, they will earn even more.

Everyday Rewards customers will be able to continue to earn frequent flyer points until 31 December. Avid points collectors will continue to be able to earn points on their Woolworths’ shopping by using a debit or credit card linked to their chosen frequent flyer program. Woolworths will consider any partnership option that does not dilute the core offer and that will add further value for its customers. Woolworths values its long association with Qantas and will look to work with them to endeavor to bring additional value to Woolworths Rewards’ members.

Woolworths currently has nine million members enrolled in the Everyday Rewards program. Members should automatically receive a new Woolworths Rewards card in the post from Wednesday 28 October.

 

While analysis by Catalyst Research and the Australian Consumer, Retail and Services research unit at Monash Business School supports Woolworths’ decision to revamp its rewards system, the reaction from customers on social media has been mixed. Some are excited by the prospect of earning money off their grocery shopping directly, but others are upset that they no longer have a choice about how to earn and spend reward points.

Some media outlets also reported that Coles has hit back at claims the new Woolworths program would allow customers to earn rewards twice as fast as Flybuys. Adam Story, general manager Flybuys and loyalty, was quoted as saying “At Coles, Flybuys members earn rewards on every dollar they spend in our supermarkets and fuel and liquor stores – not just the specific products we want them to buy. They can also earn points even faster through frequent bonus offers. On average Flybuys members are earning more than 2 points per dollar spent at Coles.”

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