Put cards up your sleeves

Small retailers should systematically beat the lower prices of global players with massive buying powers by investing in loyalty.

When the doors swing open to Aswaaq's first store in Dubai's Nad Al Hamar this month, the Dubai-based retailer will launch what it claims is the UAE's first retail loyalty scheme.

According to chief operating officer Eric Poiret, the idea "will be totally new in this market and there is no competition to our programme, offering points redemption, discounts and services".

Predicted to become the UAE's biggest retail project, comprising community centres with anchor supermarkets, stores and services, Aswaaq's attention to this previously neglected area of opportunity should prompt other firms to follow suit.

To succeed in an increasingly cut-throat arena, intelligent grocers need to take advantage of repeat business-spurring initiatives, from home delivery to online ordering.

Jumping on the high-tech bandwagon must become a priority, as retailers in other markets steal a march on regional players by sending tailored promotions to consumers' phones and giving them the chance to place orders and arrange delivery from remote locations.

Admittedly, loyalty cards are frowned upon by critics for their Big Brother-like ability to garner information on your dietary requirements, what you bought and where and how you paid for it, all processed into a databank and tactically slid into highly-targeted promotions.

The UK's health and beauty group Boots, for example, asks consumers on its Advantage Card application form for their employment status, number of children, spectacles or contact lens usage and, if they are pregnant, when the baby is due.

Despite the obligation to impart personal details, these points-mean-prizes clubs have prompted shoppers to willing sign up in droves.

As the UK multiples continue their price war, Tesco has introduced a line of value-focused own brands and selected Clubcard data as its key weapon to communicate the change to the estimated 10 million members of the scheme.

Tesco introduced its Clubcard in 1995 and a year later its holders were spending 28% more at its supermarkets and 16% less at its arch-rival Sainsbury's, lured by the simple process of clocking up points at the checkout and redeeming them on treats, with no obvious catch to the mechanics.

Apart from dramatically enhancing shoppers' experiences by providing them with attractive bonuses in exchange for their loyalty, the databanks of profiles enhance retailers' mass marketing and special offers in the long-term.

And let's not forget the knowledge stocked up from loyalty cards to find new markets, plan new range rollouts and manage fresh food - and in the process save a fortune in costs.

Lynne Nolan is the editor of Retail News Middle East.

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READERS' COMMENTS

Amazing
Posted by Calvin on Tuesday 14 October 2008 at 18:45 UAE time

Once a while, along comes an article made purely by someone who has no clue of the realities of business.

To the writer : you try to do business here in this region in-accordance to your naive beliefs. Gain real hard experience and then re-read your article years later. The content of this article has been eschewed even before you graduated. Realities speak louder than ideals.

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