Unit 1: Marketing - Concept and process of marketing - Costs and benefits - Relationship marketing
Supermarket loyalty cards
Supermarket loyalty cards are valuable mechanisms for the big name stores, new research shows
The UK-wide study, funded by the Economic and Social Research Council, tracked the spending of two matched groups of consumers for four months.
Shoppers were asked to keep a diary of where they shopped, how long they shopped, and what they spent their money on.
The researchers at Stirling University found that, per visit, card-holders spent much more time in their chosen store, 38 minutes against 13 minutes, and much more money, £34 against £14, than non-cardholders.
They were not, however, noticeably more loyal, as defined by repeated visits, than non-cardholders.
Defence mechanism
Professor Leigh Sparks, head of the department of marketing at Stirling University, commenting on the findings: "This doesn't mean that you get a card and you immediately spend more.
"Cardholders were probably already more committed to the store before they applied for a card.
"We did find that the cards acted as a defence mechanism for the store; the loyalty card protects their existing good customer base and keeps them tied to the store.
"There was no real evidence, however, that people who got cards would not go to other competing stores.
"The supermarkets have not been able to make people 100% loyal to their stores. People still shop around in all sorts of different ways."
Professor Sparks that the second thing that they found was that retailers were getting a vast amount of data from their card schemes.
"The best of the retailers were able to exploit their data, analyse it at very detailed levels, and apply to the mechandising of goods, the set-up inside stores, and the set-up of individual stores."
Card hassles
Professor Sparks said it had been agreed not to name the shops involved in the study, but it was clear that the major supermarkets were making major strides in the way they were using their data and analysing it.
"We also did some work as an undergraduate project on the idea that we might be reaching saturation level with cards.
"A consumer survey locally in Stirling found that people were fed up with having too many cards, and found there was quite a hassle factor.
"Women had far more cards than men, partly because they shop more and partly because they go into a greater range of stores."
Back to relationship marketing.
