As Morrisons makes significant changes to its loyalty scheme, it’s time to reassess what’s really important to customers, says Swapi Founder and CEO Pete Howroyd.
Shopping around
Morrison’s is the UK’s fourth largest supermarket chain, with over 500 stores and a thriving online grocery home delivery service. Their innovative partnership with Amazon – offering free same-day grocery delivery to Prime members – was established in 2016 but has grown exponentially over lockdown as both retailers tried to support customers staying at home. It’s safe to say that Morrisons know what their customers want. So why the fuss over recently announced changes to their loyalty scheme?
From points to personalised money-off vouchers
Morrisons has moved away from its’ ‘More’ loyalty points scheme to launch the My Morrisons app. Rather than saving up points to redeem whenever and on whatever customers choose, shoppers will receive instant rewards in the form of digital offers and promotions, tailored around the products they already buy.
There are of course benefits to the changes. Any paper-based vouchers or coupons come with behavioural barriers – keeping them handy, remembering to pick them up, digging them out at the busy check-out. Getting rid of the plastic card has positive environmental benefits too.
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But product-based promotions bring challenges. For example, shoppers often have to stick to their usual brand to receive their discount, which may mean walking past other, potentially cheaper, point of sale bargains. Limited-time discounts may encourage customers to buy things they don’t need that week, which doesn’t fit with today’s anti-food waste ethos.
The perils of personalisation
Personalisation can be a double-edged sword. For every customer delighted to receive a small discount on items they purchase regularly, you’ll find another who wants to stay in control of how they spend their rewards, from shop to shop. Whether it’s saving them up to put towards the huge Christmas shop, stockpiling for the annual splurge on school uniform, or simply spending a little extra on a nice bottle of wine for Saturday night. Based on some of the backlash Morrisons have experienced in media and on social media, continuing to allow customers to choose where and when they spend those points matters.
After all, points are earned. Customers feel that sense of ownership – it’s ‘their’ money and they want to spend it where and when they please, rather than being nudged into getting 10p off a packet of butter.
At Swapi, we’ve spent a lot of time getting under the skin of customer behaviour. When it comes to loyalty rewards, we found that customers want more flexibility, not less. For example, with our app customers will be able to seamlessly swap their points from one retail brand to another – so if they want to put points earned from the grocery shop towards a nice meal out, why not? These are your points – we believe you should be in control.
There’s no doubt that Morrisons have meticulously planned and researched this change. I’m equally sure that the retail industry will be watching the results closely as the battle for customer loyalty continues to rage up and down the re-booted high streets and retail parks of a post-Covid world. Watch this space.
Pete Howroyd is the CEO and founder of Swapi, a start-up tech company aiming to change the game in Loyalty. Set to launch in summer 2021, the Swapi mobile app is an industry-first ‘digital wallet’, allowing shoppers to swap unspent loyalty points and cashback for valuable offers in the Swapi marketplace. Pete has directed some of the world’s best known loyalty programs during his time working at Harvey Nichols, Harrods, Myer (Australia) and Sigma Healthcare, amongst others. He is recognised as a leader in the loyalty field internationally across fashion, pharmacy, and luxury industries.
