Loyalty battle escalates as Nectar claims “UK’s biggest scheme” crown
Over one million new cardholders
The number of people with a Nectar loyalty card has increased by over one million in the last twelve months, which the rewards scheme says makes it now the largest and most popular scheme in the UK.
Nectar now has 16.8 million UK cardholders – more than those with cards from its next two biggest rivals, Tesco Clubcard and Boots Advantage.
Loyalty schemes have become an increasingly important tool for retailers in the recession with their capacity to gather valuable customer data.
The loyalty battle has been heating up with launch of Barclaycard’s Freedom scheme in January offering a major new competitor for Clubcard, Nectar and Air Miles. Freedom rewards credit card expenditure at selected retailers and could lead to rivals ramping up their rewards to compete.
Tesco sent out its February Clubcard statement to members before Christmas in an attempt to generate extra festive sales, a move which is thought to have helped its excellent Christmas results.
Asda, a long-time opponent of loyalty schemes, has been offering money-off vouchers to customers who spend over £50 and £100 in an attempt to combat falling revenues and get more people in-store.
Nectar says a major attraction of its scheme is the number and range of its partners. In addition to Sainsbury’s, there are 14 partners including over 400 online retailers in the programme and 50% of UK households collect points when shopping in stores and online, booking a holiday, paying household bills, buying petrol and eating out.
The scheme claims its recent growth has been partly driven by shoppers wanting more for their money during the recession. Other factors have been new Sainsbury’s store openings and the addition of Homebase as a partner.
Sainsbury’s enhanced its loyalty offer to customers with the introduction last September of its ‘coupon at till’ initiative. In the retailer’s biggest investment in loyalty since it launched Nectar in 2002, customers are rewarded at the till with money-off coupons for hundreds of branded and Sainsbury’s own brand products. The Nectar card database is used extensively as part of this scheme – the historical data on customers’ shopping choices ensure that coupons are specifically targeted at what Sainsburys’ Nectar card holders actually buy.
Gwyn Burr, Sainsbury’s customer director, said, “Customers are increasingly ‘savvy’ and they shop around for the best value for money they can find. At Sainsbury’s we have lowered prices, offer great value promotions and sell high quality, ethically sourced products – and we reward our customers’ loyalty with Nectar points and money-saving coupons as well.”
In November, online ticket exchange Viagogo partnered with Nectar to give cardholders points for buying tickets on the site.
Sainsbury’s is the UK’s third largest supermarket, and says it had a “record Christmas performance” after posting a 6.2% rise in total sales for the quarter ending January 2.
In response to the news a spokesperson for Tesco told Loyalty: “Clubcard continues to grow in popularity, especially since the launch of double points. We’re very proud of the number of active card users we have – over 15m in the last 2 months – which shows that Clubcard is a regular part of our customers shopping experience.”