Retailer buys 100% of Australian rewards scheme
Major shake-up planned for country’s loyalty market
The Coles supermarket chain has bought 100% of FlyBuys, Australia’s biggest loyalty scheme.
The retailer paid around Aus$10m for the stake in the FlyBuys coalition scheme that was held by its partner National Australia Bank (NAB), and says it will carry out a major overhaul of the rewards it offers to customers.
The supermarket will now be fully responsible for marketing the scheme and have access to data on its 10 million members.
Coles finance director Tony Buffin said the acquisition would allow it to more directly target the programme to its customers with an offering including more points for shopping at Coles or other stores, more businesses to earn points with, more ways to redeem points, and more value for redemption.
FlyBuys members can currently earn points at Coles, Kmart, Target, Coles Express, Liquorland, and other participating companies.
The scheme has come in for criticism over the perceived poor value of its reward offering. Cardholders currently get two FlyBuys points for every Aus$5 spent at Coles supermarkets, or four points if they use a Coles-branded MasterCard.
Points are redeemable on items including shopping vouchers, movie tickets, childen’s toys, and Virgin Blue airline tickets. The lowest-value reward is a $20 Coles shopping voucher in exchange for 2,500 points – for which shoppers would need to spend a minimum of $12,500, or $6,250 if paying with a Coles MasterCard.
NAB will continue to participate in the 17-year-old FlyBuys scheme, awarding one point to shoppers for every $5 spent on eligible credit cards, but will now be required to compensate Coles for the monetary value of the points.
The move represents the latest major shake-up in the global loyalty landscape.
In December American Express bought Loyalty Partner (operator of Germany’s Payback coalition scheme) for Eur496m, and Tibco announced a US$23m purchase of Loyalty Lab, which provides loyalty and CRM programmes for major consumer brands.
The same month TeleTech Holdings, which provides customer enterprise solutions, took an 80% interest in customer acquisition consulting firm Peppers & Rogers Group.