Loyalty schemes for retail and hospitality are no longer a differentiator. They are a baseline, which means a bad one is worse than none at all. The Competition and Markets Authority’s review of loyalty pricing in the groceries sector found that 97% of shoppers belong to at least one supermarket loyalty scheme and the average shopper belongs to three.
Your customer is already carrying Clubcard, Nectar and probably a coffee app. The question is not whether they will join a scheme. It is whether yours earns the space, and whether it does anything for you beyond handing back margin.
That the savings are real, but trust in them is not. After analysing around 50,000 grocery products on loyalty promotions across five supermarkets, the CMA found very little evidence of retailers inflating usual prices to make loyalty deals look better.
The executive summary reports average savings on loyalty priced products ranging from 17% to 25% across the five supermarkets examined, and 69% of shoppers thinking loyalty pricing offers good savings. But 40% said they do not trust that loyalty prices are a genuine saving on the usual price, and 43% consider it unfair that members pay less than non-members. Supporting survey work by the National Centre for Social Research found one in five regular grocery shoppers hold five or more scheme memberships.
Two lessons follow for a smaller operator. First, transparency is doing real work, because customers are primed to suspect the offer. Second, sheer scheme proliferation means your customer’s attention is the scarce resource, not their willingness to sign up.
Because it gives away margin and tells you nothing. Buy nine, get the tenth free is a 10% discount applied to your most frequent customers, who were coming anyway, with no record of who they are, what else they bought or when they stopped coming.
The value in a loyalty scheme is not the reward. It is the identification. Once a customer is identified at the till, every subsequent transaction attaches to a record, and that record is what makes anything else possible: knowing your genuine visit frequency, spotting a regular who has quietly lapsed, understanding what a returning customer is worth over a year rather than over one bill.
A paper card cannot do any of that. Neither can a third-party app that keeps the data.
Because a scheme bolted on beside the till is a scheme staff will skip during a rush. When loyalty runs natively in the EPOS, identification is one tap at the start of a transaction and the reward applies automatically, in the same flow as everything else.
Native loyalty also means the data lives with your sales data. Spend by customer, by product, by daypart and by visit frequency all sit in the same reporting rather than in a separate dashboard nobody opens. That is the difference between a loyalty scheme you run and a loyalty scheme you have.
ICRTouch loyalty runs through the same platform as TouchPoint, TouchOffice Web and your member or customer records, which is set out on our loyalty schemes for retail and hospitality page.
The behaviour you want more of, which is usually not the one a stamp card rewards. Most schemes reward volume, which mainly rewards customers who were already high volume. The more useful targets are:
We looked at how the underlying pattern of eating out has shifted towards fewer but higher value visits in Fewer Visits, Bigger Spend, which is the strategic context for all of this. When visits become intentional rather than habitual, being the venue somebody chooses deliberately is worth designing for.
Whichever your customer will still have on them in three months. There is no universally right answer, and the CMA specifically flagged accessibility, noting that supermarkets should consider whether schemes work for people under 18 and people without smartphones.
In practice most operators run more than one route. A physical card suits clubs, older customer bases and anywhere a credential also opens a door. A digital wallet pass suits customers who resent another piece of plastic and removes the cost of reissuing lost cards. A phone number or email lookup at the till is the fallback that catches everybody else.
For members clubs there is a particularly strong case for a single credential that carries loyalty, member pricing and door access together, which we cover in our post on access control for pubs, bars and clubs.
At the point where the customer is already deciding. Digital screens driven by the till can show member pricing beside standard pricing, so the value of joining is visible while somebody is looking at the menu rather than after they have paid.
Self-service kiosks are similarly effective, because they can prompt every single customer to identify themselves or join without a member of staff having to ask. We covered how to get a return from screens in Beyond the Menu Board.
CCR Systems has supplied EPOS and loyalty solutions to pubs, clubs, restaurants and retailers across the North West and the wider UK for more than 40 years. If you already run a scheme and cannot tell whether it is working, that is a conversation worth having.
Call 0151 644 8296, email contact@ccrsystems.co.uk or get in touch here.
