Shoppers still have to spend a lot to get rewards from loyalty schemes: Consumer NZ

Wednesday, 10 May 2017

Shoppers value customer service above rewards schemes, Consumer NZ says.

Baby-boomers are the most likely to think they are getting good value from their loyalty rewards schemes, new data shows.

Loyalty schemes have been in the news over recent months as many made changes.

Jessica Wilson, of Consumer NZ, says the value proposition of rewards schemes has not moved much since recent changes.

Countdown's Onecard joined forces with AA Smartfuel, Fly Buys and Airpoints split and the number of retailers offering Fly Buys points has shrunk.

The New World Clubcard has also expanded into the North Island and Farmers made changes to how cardholders collect rewards, offering more points but reducing their life span from one year to three months.

New data from Canstar shows that 50 per cent of New Zealand Baby Boomers think they get good value from being part of a loyalty scheme, compared to 42 per cent of Millennials and 46 per cent of Generation X.

Women are more likely to rate the schemes higher - 51 per cent said they offered good additional value, compared to 41 per cent of men.

Consumer NZ spokeswoman Jessica Wilson said her organisation's researched showed the changes had not changed the value proposition for shoppers.

'Big rewards still require a big spend,' she said. 'Rewards may be a bonus if they come without effort. If, however, you're spending more just to earn rewards or changing your shopping patterns rather than shopping by price, you're likely to be losing out.'

To earn enough Fly Buys points to earn a $100 Helloworld travel voucher, you have to spend $15,250 at New World.

'Both Airpoints and Fly Buys sell the same Bodum Columbia Coffee Maker in their online stores. The coffee maker costs 199 Airpoints Dollars and 1005 Fly Buys points. If you calculate the required spend to earn the coffee maker, based on acquiring points at New World, it would cost $25,125 with Fly Buys and $26,892 with Airpoints,' Consumer NZ's report said.

Consumer also estimated that you would need to spend $2000, swiping your Fly Buys card each time, to qualify for a bottle of Lindauer which often sells for just under $10. You'd have to spend almost $850,000 to get enough Fly Buys for a TV.

At Countdown, you have to spend $2000 to earn a $15 voucher. At New World, $2125 in spending gets 15 'New World dollars'.

The Canstar research showed that loyalty schemes did not change behaviour much. Almost 60 per cent of people said they went to the supermarket closest to where they lived.

Wilson agreed it was not a key driver of shopper behaviour. 'They rate well below price and customer service as a reason to do business with a retailer.

'In our last retailer satisfaction survey, loyalty points didn't rate as a key factor affecting consumers' choice of retailer.'

Contact Energy said it had a good response from new and existing customers when it swapped its allegiance with Fly Buys for membership of Smartfuel.