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BizReport : Loyalty Marketing : June 20, 2015

'World-first' supermarket promotion puts customers in the driving seat

In what they are calling a "world-first" a major UK supermarket is letting members of its loyalty scheme choose which products they would like to save money on.

by Helen Leggatt

Waitrose supermarket claims its new 'Pick Your Own Offers' feature, which allows members of its myWaitrose loyalty scheme to choose up to 10 products they want offers on, is a world-first. Members can choose from nearly 1,000 products and the offer is set at 20% discount.

Offers must be picked by 7 July, and it should be noted that this is a promotion and not an ongoing discount for their loyalty members.

According to Mark Price, managing director of Waitrose, what the supermarket is attempting is a "mass customisation in grocery".

"Customers can choose what's valuable to them when they shop for groceries. We really are giving power to the consumer," he said.

Waitrose's promotion is being used to combat competition currently being experienced from discount supermarkets such as Aldi. Earlier this year, Kantar Worldpanel data revealed that Aldi had overtaken Waitrose to become the sixth biggest grocer in the UK.

"The changing structure of Britain's supermarket landscape is illustrated by two facts. Firstly, the so called discounters Aldi and Lidl now command a combined 9.0% share of the market," said.Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel. "In 2012 the same two retailers only accounted for 5.4% of grocery sales. Secondly, the 72.8% share taken by the biggest four retailers is now at the lowest level in a decade."

Price confirmed that the promotion could cost Waitrose as much as "£5m a week or more" (US$7.9 million), based on 20% of the 5.7 million myWaitrose members saving an average of £5 (US$7.90) a week on their shopping bill.

However, he justified the move by adding that it was a calculated risk they were prepared to take. "What you are placing an educated bet on is that this will drive greater loyalty to Waitrose. As a consequence of that, you will get more shoppers, they will spend more with you and that will offset the cost of doing it."

Tags: grocery, loyalty marketing, promotion, supermarket, UK

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