Thursday, June 5, 2008

Books and cards: an update

Further to my engaging treatise on loyalty in the Aussie book retailing space, there's been some movement. Angus & Robertson, which incidentally failed in its recent bid to buy out the Borders chain in Australia has recently jumped into the loyalty space with its own program. It appears to be a fairly standard spend-$100-get-a-$5-voucher deal, similar to Dymocks Booklover, which rewards you at the same 5% level without the need for the $100 threshold.

A&R ignored my sage advice that they were previously creating a point of difference via their mouth-watering $5 discount tables. Presumably that wasn't doing enough for them, but I wonder if this program is more a defensive strategy. And interestingly, A&R has used as its platform the graphic card interface promoted by NZ-based Visible Results. The neat looking technology rewrites the loyalty entitlements and other marketing info on the loyalty card at each successive visit to the retailer. While this technology has been bouncing around for some years now (Mobil Max, an early competitor to Fly Buys in New Zealand was among the first in 1998), and the Brazin Pulse program is the most "visible" Australian client, it's curious that Dymocks moved on from this technology in favour of a traditional card format when it revised Booklover a few years back. I don't know the ins and outs but presumably A&R is happy to jump into a format that didn't appear to suit its competitor. Can't wait till the next chapter!

Thursday, May 22, 2008

Reverse thrust for Boost loyalty?

Boost juice bars have been one of the retail success stories of this decade, with rapid expansion and acquisition taking the chain from its first store in 2001 to not much short of 200 stores today under the leadership of entrepreneur Janine Allis. The fresh, bright, youthful execution of the brand has been one of the keys to the success of the venture.

But in the loyalty stakes, I'm not sure the execution has been handled as brilliantly. Boost's first loyalty device was an unremarkable stamps-on-card, get-nth-juice-free deal. Then came the VIBE club, accompanied by a nice bright piece of plastic, and an unfettered 10% discount on every juice purchased. Great deal for the consumers, but who were they rewarding? Well in my case, I was by any measure an infrequent visitor to my local Boost juice bar, but on one such visit, I was given a VIBE club card - no questions asked! I think I may have just had to hand over an email address - easy-peasy.

So I was a happy camper, but I couldn't help but wonder, why were they frittering away 10% of their margin on me? In my case, I enjoyed the discount, but I'm just not so keen on those bars and it certainly didn't increase my frequency, and I don't think I particularly hunted out a Boost bar compared with the competition. So any sense of rewarding your best customers, or providing an incentive targeted at gaining the maximum sales uplift appeared to be missing.

Fast forward a few years and the impact of whatever happened in the intervening period meant that Boost had to change their tune for their valued club members. And they did so via a simple message - the 10% off deal was gone.

Withdrawing a benefit isn't easy. Perhaps if Boost had garnered its best customers under this scheme, say the best 20% of their juice-buying public that was generating 70%-80% of their revenue, they would have considered providing a 10% discount ongoing. As it turned out it was hard not to avoid leaving a pithy taste among their juice-buying public.

Monday, April 14, 2008

Loyalty: inside the shoppers purse

Vogue Australia's website forum provides an often fascinating insight into the hearts and minds of a interesting slice of Australian heartland.And a thread I came across recently gives us a sly peek inside the purses of what I suspect is probably a hard-core shopping sisterhood.For those seeking insights into the each of loyalty programs and discount cards, it's some interesting research that comes for free!

When prompted to empty their purses and handbags for their favourite or most-used cards, three were heavily mentioned - FlyBuys, Myer One and Priceline. No surprises there I suppose. For me, it shows that the Myer program has come a long way in relatively short time. And for Priceline, an affirmation of its place in Oz loyalty land despite my misgivings. What came next, or didn't come next, was of more interest. Clothing retailer cards are dime-a-dozen, and Country Road, Cue and Portmans stood out from the pack. But food-related cards were surprisingly prevalent, with the Boost Juice card the 4th most cited overall. The Dymocks booklover program got a few mentions, but after that it was the ones not mentioned much that was of interest.

The ubiquitous Qantas frequent flyer program rated only a handful of mentions. Is it not regarded by shoppers as a loyalty program? Is the overlap of heavy shoppers with frequent flyers that small? That had me guessing. Also, the various pharmacy programs were rarely mentioned. Amcal Club, with its million-plus members, barely hit the radar. Is visiting the pharmacy seen as drudgery, to the point that its hard for these programs to engage? The comparison of supermarket / petrol purchasing and FlyBuys perhaps suggests something else is at play? Has Priceline moved into Amcal's space?

Bulletin boards and forums aren't immune from bias and even viral marketing, although there's not much evident in this thread. Readers of Vogue may not perfectly match middle Australia, but their news and views do provide loyalty food for thought.

Monday, January 28, 2008

Seduced between the covers

There’s a nice little battle taking place in my local strip shopping centre. Within a stone’s throw of each other, there’s each of Dymocks, Angus & Robertson, and Borders. The latter, definitely cast in the role of foreign interloper, has made a splash since its arrival in my local centre a year or two back. Massive range, extended hours, adjoining coffee shop, unlimited browsing. Not quite the David & Goliath battle tellingly portrayed in You’ve Got Mail, but certainly a massive threat for the local incumbents.

Part of Dymocks initial response was flawed, appealing to local bookworms’ sense of patriotism, proudly pointing to its long tradition of Australian ownership. For what does this count in the loyalty stakes? Not much at all, I'd suggest. Retail Australia is littered with the remnants of Buy Australian campaigns. However, it is worth reflecting on the other loyalty devices used by these chains. Dymocks has invested over the past few years in its Booklovers program. Quite a neat loyalty card, where 5% of your purchase price is redeemable as a discount on your next visit. Options to receive email newsletters, but unimpressive servicing options (their web page refuses to recognise my card number).

Over at Borders, you're encouraged to receive their weekly emails, which contain the usual book reviews etc, but also contain weekly discount offers. These discounts are variously targeted by product (e.g. DVDs only, children’s books only), by quantity (buy 3 books, get 20% off) or sometimes just a sizeable unconstrained discount (30% off any book). The gregarious nature in which the emails are offered combined with the attraction of the discount suggests that a reasonable proportion of their sales are subject to these discounts. Mere observation of the number of Borders customers armed with the discount coupons at point of sale tends to reinforce this. How much is this loyalty device costing Borders? A hint that Borders itself is questioning this device came in the form of a recent online survey which queried whether there was anything in the email newsletters that was of interest, apart from the discount coupons.

Across the road, Angus & Robertson has bravely resisted jumping into structured discount programs, either the formalised loyalty card of Dymocks or the emailed discount schedule from Borders. If anything, the bargain bins have been A&R’s go. And I have to say I was mightily impressed this month to see some reasonable titles thrown out for just $5 – genuine bargains. That in itself has been sufficient for me to make sure I pop my head in to see what’s on offer. You don’t always need a highly structured or technologically elegant loyalty solution.

Who’ll win out in the end? Borders seems likely to have the resources to come on top in any fight. For the others, who knows? For the time being, the winner just at the moment appears to be the book loving public – bigger choice, longer hours and good prices. Or have I just been sucked in?