Waitrose: rewarding loyalty
Waitrose came late to loyalty schemes. Back in 1999, Mark Price, then Waitrose’s marketing director, dismissed loyalty cards as “intrusive and expensive”. But 12 years later, by then managing director Price had clearly changed his mind and was fully behind the 2011 launch of the company’s myWaitrose scheme.
By 2016, the company was able to report 6.4m cardholders – an increase of 7.5% between March and September that year – while its annual report recorded that: “The myWaitrose scheme deepens relationships with our customers and… 70% of sales are to cardholders”.
Unlike many loyalty projects, myWaitrose does not offer points for purchases. Instead, there are targeted discounts – competitions, magazines, access to the ‘Quick Check’ self-scanning system and free newspapers, tea or coffee when you shop. The ‘pick your own offers’ scheme allows customers to select 10 products for a 20% discount whenever they buy them. In keeping with Waitrose’s ‘foodie’ image, cardholders can also claim a 10% discount on courses at any of Waitrose’s cookery schools.
The impact of the myWaitrose scheme has been significant: more than a million cardholders joined the ‘Pick your own offers’ scheme in the year following its launch in June 2015. Waitrose has also used the card data to make targeted offers. Working with Monetate in the run up to Christmas, for example, the company identified shoppers who had previously bought their Christmas turkeys at Waitrose but had so far failed to do so that year. A million cardholders were targeted with a special turkey discount offer, which produced a 20% increase in promotional conversion rates.
Waitrose has also used the card data to examine online shopping habits, finding that once a customer has bought online five times, they are more likely to become a loyal regular. Again, working with Monetate, Waitrose developed a scheme to give shoppers an £80 discount spread over five shops. This produced a 24% increase in orders from new and early stage customers.
In the six months to September 2016, online sales grew by 4.3%, Waitrose’s market share in the grocer sector is up to 5.2% and a striking 70% of John Lewis’ click-and-collect orders are now picked up from Waitrose stores.
Mark Price is now retired from Waitrose and, as Lord Price, is a trade minister in the current government. He said in the company’s latest annual report: “Winning customers, gaining market share and growing profit in this tough market is a tribute… to everyone in Waitrose.” It might also owe something to myWaitrose and deepening engagement with customers.