On 31 August 2016, the existing Woolworths Rewards scheme will be replaced with a new program in an attempt by the beleaguered supermarket chain to attract more customers. The current rewards scheme, which has been in place for less than10 months, has disappointed shoppers primarily because it offers points only on a very limited range of products.
Previously, Woolworths had a loyalty program (Woolworths Everyday Rewards) which had been in existence for over six years. Everyday Rewards gave shoppers one Qantas Frequent Flyer point for each dollar spent over $30 at supermarkets and one Qantas point per $2 spent over $30 at BIG W.
But in October 2015, the supermarket chain scrapped this program.
Why was the six-year-old loyalty program discontinued? Woolworths’ scheme simply was not working. A report carried out by the Daily Telegraph last year pointed out that most Everyday Rewards’ members did not redeem their points.
According to internal research obtained by The Sunday Telegraph, 60% of Everyday Rewards’ members who enrolled in the Qantas Frequent Flyer program failed to redeem any points in the past year. Also, an additional 33% of members had never redeemed any points.
Further research carried out at that time indicated that 68% of customers preferred to convert points into money off their shopping instead of waiting for several months to get the benefit of the points that they had accumulated.
Justifying the switch-over, Woolworths Food Group Managing Director Brad Banducci said, “The feedback was overwhelming – we needed a simpler rewards program.”
Change introduced in October 2015 – The program announced 10 months ago discontinued Qantas points altogether. This move alienated those shoppers who were users of the frequent flyer points.
Another drawback that this program had, was that it offered points only on a limited range of items.
Woolworths was quick to realise that a new scheme was needed.
What does the reward program effective from 31 August offer? Just 10 months later, the company has come up with a revised program which tries to cater to a broader range of customers. It includes several new and reintroduced features.
Every dollar spent in store and online at Woolworths’ supermarkets, BWS, and Caltex Woolworth fuel outlets will give shoppers 1 point. When 2000 points get accumulated, it will automatically result in $10 being deducted from the rewards program member’s next bill.
There is also an option to change the redemption settings. Customers can do this online. There is a choice between accumulating points for Christmas or converting rewards into Qantas points. Both these benefits will accrue on 15 December.
How Qantas points work under the new scheme – Conversion of Woolworths points to Qantas points can be done only after first accumulating 2000 Woolworths points. Every $100 spent gives members 43 Qantas points. This compares with 70 Qantas points in the earlier scheme that was valid until October 2015.
Will Woolworths’ new loyalty plan succeed? The company’s nine million loyalty plan members can opt for Qantas frequent flyer points or an immediate discount on their shopping. Fresh fruit and some essential household items carry double the reward points. This benefit is also available on vegetables, fresh meat, and at the deli and seafood counter.
The program extends across 990 Woolworths Supermarkets, 1270 BWS stores, and 530 Caltex Woolworths outlets.
The only possible drawback is that the rapid changes in Woolworths’ policy may have left shoppers confused.