Sainsbury’s and Tesco Loyalty Schemes Effects

Sainsbury’s and Tesco Loyalty schemes effects

Loyalty schemes are structured marketing efforts that reward customers with discounts or other special offers in order to encourage them to continue purchasing, which can potentially benefit a business.

Unlike Asda, Sainsbury’s has a loyalty scheme which allows them to possibly retain and attract new customers. Their loyalty scheme was first introduce in 2002 which was called “the Nectar Card”. The Nectar Card allows one to collect a number of points from making purchases from several places such as Sainsbury’s supermarkets, Homebase, Ford, online stores such as Amazon etc, which then provides all sorts of discount and treats. Nectar card users usually receive 2 points for every £1 spent in stores and online stores range between 1 and 2 points per £1 spent. As of February 2010, The Nectar Card is currently the largest and most popular scheme in the UK, with 16.8 million people using one across the country.

Just like Sainsbury’s, Tesco also has a loyalty scheme which they call “Tesco Clubcard”. The scheme was introduced back in 1990s and rapidly grown ever since. It is quite similar to Sainsbury’s in terms of how customers collect points, by getting your card swiped at the checkout; you'll earn 1 Clubcard Point for each £1 that you've spent. You can also earn extra points when you buy products that carry special promotional offers (e.g. buy this, get 100 free points. Once points are collected, Clubcard holders can then use the points the get rewards or discounts from Tesco stores.

As previously stated in this proposal, the research title is “Introducing the customer loyalty scheme in ASDA” by doing so the company will allow itself to possibly build a relationship with customers which will enable them to identify customers’ behaviours in terms of who buys what, when, where, how much, how etc. It may also allow ASDA to have more