UK Grocers Reimagine Loyalty Programs to Keep Customers Engaged

To attract customers, U.K. supermarkets compete to offer the best loyalty scheme. And British shoppers sure do love their loyalty rewards.

One PYMNTS survey found that 63% of Brits are signed up for their favorite supermarket’s loyalty program. The findings, documented in the report “What UK Consumers Expect From Their Grocery Shopping Experience,” a PYMNTS and ACI Worldwide collaboration, also found that 44% of Brits spend more at supermarkets that offer a loyalty program.

When it comes to retailers’ affinity for such schemes, the story isn’t much different. Another PYMNTS  study, “Big Retail’s Innovation Mandate: Convenience and Personalization,” found that 81% of U.K. merchants believe in the importance of loyalty programs.

In a bid to gain an edge over their competitors and make the most of Brits’ love of loyalty cards, over the years the country’s biggest grocery brands have expanded their programs and branched out from the classic model.

Of course, the basic premise remains the same: collect points to earn rewards. But beyond that, supermarkets in the country are continuously innovating.

For example, some members of M&S’s Sparks reward program were recently invited to join a new, paid-for tier called Sparks Plus.

For £120 (about $145) a year, members of the new enhanced loyalty program will receive a monthly £10 voucher, unlimited next-day delivery, and a free monthly hot drink from M&S cafes, among other perks.

The latest move follows the launch in October of an M&S store card, Sparks Pay, exclusively for members of the company’s rewards scheme.

And M&S isn’t the only retailer in the U.K. to incorporate financial services into its loyalty program.

In 2021, the country’s biggest supermarket chain, Tesco, launched its own debit card, Tesco Clubcard Pay+, which enables customers to earn Clubcard points on all their purchases, not just those made at Tesco.

The Rise of Loyalty Apps

While embedding its loyalty program into a debit card means Tesco customers don’t need to always carry a separate card around with them, another option is for Clubcard members to collect points using the company’s mobile app.

As PYMNTS has reported, app-enabled loyalty schemes are helping British shoppers embrace mobile-assisted retail experiences, and Tesco is leading the charge.

While the company’s first foray into loyalty apps in 2010 simply relocated the member identification function from a card to a mobile device, since then, Tesco has continually added new features. Now the Tesco Clubcard app can be used to view current promotions, access rewards and apply discounts.

Moreover, since 2020, the advantages of being a Clubcard holder, through the app or otherwise, have increased further since the grocer introduced a tiered pricing regime that gives Clubcard users discounts of up to 50% off hundreds of items.

Following the launch of the Clubcard Prices initiative, Reuters reported that the app picked up an additional 1.9 million users between October and December 2021. That means that of the over 20 million members of the retailer’s loyalty program, 8.5 million of them access it through a mobile app.

For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.