Nectar Card to Set Establish the Future of the ‘Membership Economy’

Sainsbury’s is overhauling its Nectar card, hoping they don’t make the same mistakes as Tesco Clubcard scheme fiasco by putting the customer first and rewarding not just money spent, but other facets of loyalty. Below Rob Meakin, Managing Director at Loyalty Pro, comments for CEO Today.

The new move by Sainsbury’s to overhaul their loyalty scheme could work both ways; if it’s simple and genuinely rewards loyalty, customers will love it. On the other hand, they will be hoping to not make the same mistakes as Tesco recently did with their Clubcard loyalty scheme, where the supermarket was accused of confusing and alienating its customers.

Putting the customer first is an absolute priority for an industry which is so steeped in fierce competition; consumers are increasingly looking for the better deals with wallets squeezed tightly due the rise of inflation and uncertain times ahead. Sainsbury’s decision to reward its customers based on how often they shop and how long they’ve been shopping reflects a growing trend of the importance supermarkets, retailers and businesses in the hospitality industry are placing on customer retention. It’s also Sainsbury’s first big loyalty shake-up since buying the Nectar scheme for £60m early this year and the jury is out as to whether this will reap rewards for the supermarket chain.

Consumers now expect a certain level of personalisation with deals they make – this is what we’re calling the ‘membership economy’, where everyone is now expecting the VIP treatment with tailored rewards that reflect the consumer’s own buying patterns. As more and more consider loyalty as a sort of currency, the battle between the UK’s top supermarkets will only intensify. It will surely be a matter of time before other UK chains respond with their own schemes.

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