When the value of the credits reaches $10, customers will receive $10 off their next grocery or liquor bill.
Advertisement
“We have set out to design something that’s 100 per cent relevant to our customers and making it automatic and completely hassle free”, he said.
The group said it was moving away from a points-based scheme as only 9% of its customers said they prefer the same, while 68% said they wanted money off their shopping.
Woolworths is counting on stronger food and liquor sales to cover the cost of replacing its Everyday Rewards loyalty program with a more generous scheme that gives customers discounts off their shopping bills instead of frequent flyer points.
The grocery giant will stop handing out Qantas points at the end of this year, with a new Woolworths Rewards scheme switching to Woolworths Dollars as its coin of the realm for at-checkout discounts.
Launching from 28 October 2015, the programme will now see customers earning “Woolworths Dollars” in participating Woolworths Supermarkets and BWS stores.
“It is hard to tell at this stage whether Woolworths will be spending more on its rewards program post the changes”, Mr Simotas said.
“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”, he said.
Perth shopper “Adam Rooboy Debrincat” claimed he would need to spend $900 to earn a $10 discount.
Using customer shopping insights gleaned from data supplied by 50 per cent owned data analysis firm Quantium, Woolworths will also make targeted and “predictive” offers to customers based on what they are buying and what they might be interested in buying.
Under the newly announced scheme, as soon as a customer earns $10, that amount will be saved on the reward card and can be redeemed when they next shop.
Woolworths says the scheme will allow shoppers to earn money off their groceries at least twice as fast as its major competitors’ loyalty schemes.
“Further, the majority of supermarket shoppers think it takes too long to earn rewards”.
Mr Simotas said the implied $500 million spend was much higher than the cost of Qantas Frequent Flyer points, which was estimated to be between $60 million and $80 million a year.
Woolworths claims that recent surveys have shown little interest in the frequent flyer loyalty program, with only 9 per cent of respondents in favour.
Mr Banducci did not rule out inviting a third party into the rewards scheme in the future, but said the immediate focus was giving customers instant savings.
But Qantas is now working on a new take on its most mainstream retail presence, which would take effect when the existing Woolworths-Qantas contract expires on December 31st, 2015.
“We believe that if we focus and invest behind our customers they’ll put us first”, he said.
However, Woolworths may reduce the value of discounts on promotional items to fund the rewards and minimise the impact on margins.
Advertisement
“It was very important for our customers going into Christmas that we gave them another benefit and we didn’t take something away,”Mr Banducci said”.
