John Pal, senior lecturer in Retailing at Manchester Business School was interviewed for BBC Radio 4’s You and Yours programme this week discussing customer loyalty schemes and the cuts to their value.
John discussed loyalty schemes in the food retailing sector, explaining why they aren’t as rewarding as they once were. He noted that everything has a price, and that even loyalty schemes which are perceived as ‘free’ need to be paid for and ultimately this cost is passed onto the consumer. Loyalty schemes have become more noticeable to the big supermarkets as eating into their profits, therefore hindering their efforts to compete with emerging stores such as Aldi and Lidl, who focus on low prices.
He also commented that shoppers’ behaviour is changing. People now prefer low prices to the benefits they receive with loyalty cards. Driving factors behind shoppers’ choice are now convenience and price; people are less inclined to make a choice based on what a loyalty card can offer.
John Pal concluded with the opinion that shoppers are now cherry picking where they shop – it’s certainly true that attitudes are changing across the retail landscape.