Loyalty programme in food retail: success stories

20 de June de 2023

In the economic context of recent months, a considerable number of consumers have opted to abandon their loyalty to certain brands, in search of discounts, private label products or promotions that can reduce their end-of-month spending. Against this backdrop of fierce competition, loyalty programmes play a crucial role in the strategies retailers use to captivate their customers.

In this article we will analyse the loyalty programmes of the main Spanish retailers. Which of them do you think stands out as a leader in the loyalty field?

Efficient loyalty programme

As mentioned in the article “How to design an efficient loyalty plan“, the key elements in creating a loyalty programme are based on customer insight, personalisation of the offer and continuous measurement of the programme in order to improve and optimise the customer experience. To do this, it is necessary to know the target audience in depth and to know what the brand’s strengths are in order to exploit them. It is also crucial to know our weaknesses in order to work on them and offer the customer an optimal experience.

The success of a loyalty programme lies in a customer-centric strategy. It is important that the core value proposition (CBO) is attractive, motivating and easy for the customer to understand. Ideally, it should combine a rational offer (with direct discounts and coupons, at the time of purchase) with emotional and aspirational offers, including other benefits such as; periodic accumulation of €, personalised challenges, gamification, customer communities, sub-clubs or collectives, etc. According to Kantar, 74.8% of Spanish consumers belong to a loyalty programme. This figure continues to rise due to the economic crisis in recent months.

Given the intense level of competition in today’s market, it is crucial to offer personalised benefits that meet the individual needs of each consumer. Therefore, in this article, we will look at the benefits and features of the loyalty programmes implemented by leading Spanish retailers.

It is important to note that some programmes offer paid subscription options as part of their core value offering (VBO) aimed at premium segments to extend and enhance the benefits of the standard programme. However, in this article we will focus on the free plans that all retailers offer.

Analysis of loyalty programmes in the food retail sector

This analysis will be carried out in the 5 retailers with the largest market share in Spain according to the analysis carried out by Kantar: Carrefour, Lidl, Dia, Eroski and Consum.

During the analysis, we have identified some common features that all retailers offer in their loyalty programmes:

  • Each retailer has an application that offers various functionalities, such as the display of the receipt and the digital leaflet, as well as the possibility to create shopping lists to gather all the usual shopping basket products in one place.
  • In addition, with the exception of Dia, they provide the option to make payments via the app, which improves the customer experience during the shopping process.
  • Another common benefit is discounts on external brands (partnerships). With the exception of Consum, all other retailers offer benefits or discounts when purchasing products or services from specific brands, such as Endesa or Portaventura.

It is important to highlight the role of Mercadona, as the leading retailer in Spain with a market share of 25.2%. Since 2020, the company has chosen not to implement any loyalty programme aimed at its customers.

Previously, the brand only had a loyalty card that offered the possibility of deferring payments until the end of the month, with a maximum credit limit of 3,000 euros and no additional charges. However, this card did not offer any discounts on product prices.

The decision to dispense with a loyalty programme is based on the company’s strategy. Mercadona continues to follow its “Always Low Prices” (ALP) policy through an efficient management of its assortment, prioritising its private label and relying on national suppliers, thus guaranteeing the most competitive prices in the market.

Carrefour – Club carrefour

The Carrefour group has a market share of 10.1%, making it the second largest retailer in Spain after Mercadona. Its presence extends to more than 1,400 shops throughout Spain. It is the retailer with the highest volume of members in its loyalty programme, which reaches 9 million members in Club Carrefour.

This programme combines rational and aspirational offers in its OBV, making it easy for members to save on their purchases and enjoy other exclusive benefits. Benefits include direct promotions and coupons tailored to the customer’s type of consumption. Through the “My Carrefour” application, members can make payments, access their coupons and the ChequeAhorro.

  • Carrefour’s commitment is centred on a discount policy based on the ChequeAhorro, a coupon that accumulates monthly in the customer’s balance, the calculation of which is based on monthly spending. For example, customers accumulate 1% of their purchases in food, fresh products and perfumery.
  • Collectives: In addition to the main programme, Carrefour offers three additional savings options aimed at young people under 30 years of age, large families and people over 65 years of age. All of them include a VAT reduction on fresh products purchased. This is a very useful strategy, as it focuses on groups that offer additional benefits, which increases the linkage and the feeling of belonging to a group.
  • Partnerships: It also provides discounts on external services, such as the 8% discount on refuelling at Carrefour petrol stations and the 5% discount on car, home and death insurance with Carrefour Seguros. These discounts on additional services represent an important incentive for many customers when choosing the brand.
  • Communities: Carrefour communities offer consumers a space where they will find product news, sweepstakes, tips and conversations between club members. In addition, they also offer experiences in partnership with sports clubs, where they will have the opportunity to enter sweepstakes and keep up to date with the latest news.
  • Gamification: The latest addition to the Carrefour app is the addition of mini-games and challenges for consumers to have fun while using the app.

Lidl – Lidl Plus

Lidl is the retailer with the third largest market share (6.6%) in Spain. It currently has more than 650 shops in Spain.

In terms of its loyalty programme, Lidl has adopted a 100% digital approach through its mobile application. This programme offers exclusive discounts that are renewed weekly, as well as personalised coupons for its users.

  • Aspirational rewards: they offer aspirational rewards through prize draws and special prizes after every purchase, through gamification with their famous “scratch card”, available on the app.
  • Personalisation: Highlighting its commitment to customer satisfaction, Lidl’s app allows users to manually configure their personal preferences and tastes. This allows the discounts offered to be personalised, tailored to the individual needs of each consumer.
  • It is very important to highlight Lidl’s bazaar section, a promotional strategy based on its product hooks by categories or collectives (such as, for example, its famous food processor). These products are so representative for the brand that they form part of its product catalogue both in its online shop and in the app. It is worth mentioning that, despite this diversity of products, Lidl does not offer the possibility of purchasing food products through these platforms.

Dia – Dia club

Grupo Dia is the fourth largest retailer in Spain, with a market share of 4.5%. Its presence is spread across a network of 3,789 shops under the Dia and Clarel brands.

  • Personalised discounts: as part of its loyalty strategy, the group offers a programme that provides benefits, mainly of a rational nature, to its customers with personalised discount coupons. These allow customers to save up to 50% on their favourite products. These discounts are tailored to the preferences and shopping habits of each consumer, providing a more personalised experience.
  • Exclusive prices: Dia focuses its loyalty strategy on double pricing, offering members of the programme exclusive prices, both in physical shops and in the online shop and in promotional leaflets.

Eroski – Eroski Club

Eroski has achieved a market share of 4.5%, consolidating its position as the fifth largest retailer in Spain. The company has a total of 1,645 establishments, including different formats such as hypermarkets and supermarkets.

  • Aspirational benefits: members of the Eroski Club programme enjoy various benefits that enable them to make savings. These include rational offers (coupons and personalised direct discounts), but above all emotional and aspirational ones, with exclusive prices, accumulation of Travel Club points, accumulation of 1% of monthly purchases on the Eroski Club card or the Gold card subscription programme, in which customers accumulate 4% a month, as well as other offers for a monthly fee of €4.99.
  • Gamification: In addition, the brand offers special days on which it gives away VAT and access to monthly games with instant direct prizes.
  • Group actions: through a family plan offering monthly savings vouchers tailored to their needs. A 5% discount is offered on nappies, as well as nutrition and midwife services where they can consult all their doubts.
  • Emotional advantages: through the app, users enjoy emotional advantages through exclusive services. They have the possibility to create a healthy menu and keep track of it on a weekly basis. Along with other nutritional services, for a balanced diet.

Consum – Consum world

Consum is the sixth retailer with the largest market share, with a total of 3.4%. The company has 900 shops, mainly in the Levante area. To become a Consum member-customer, an initial contribution of 10 cents is required, which will be withdrawn in the first gift cheque received.

  • Linkage with the brand: focuses its strategy on linkage, offering its customers the opportunity to become members of the cooperative by making a minimum investment of €150. In doing so, they offer the opportunity to be involved in the company, providing a greater connection and sense of belonging to the brand.
  • Flexible payment: In addition to the basic membership card, Consum offers a card without commission or maintenance costs that includes flexible payment options. This allows the customer to make immediate, end-of-month or special payments, with the aim of adapting to members’ needs.
  • Consum focuses its OBV on emotional and aspirational benefits, with the Gift Voucher at the heart of its offer.

It is sent monthly to the consumer via email or post. In addition, for every purchase of more than €50 made by the member, they can accumulate 0.75% of the total amount of the purchases, accumulating up to 1.25% if they exceed €125.

This cheque is made up of the sum of the discounts obtained for monthly purchases + the discounts obtained for the products “Cheque-Crece” and “My Favourites”.

  • “My Favourites” is one of the main promotions of its offer and the most valued by its customers. In it, Consum involves its members, allowing them to choose a number of products each month to which they can apply an exclusive discount. If they do not make a selection, the brand will decide which products to select. In this way, Consum builds a proactive programme, in which the customer has a say, encouraging two-way communication between the brand and its members.
  • The “Cheque-crece” is about exclusive discounts for members-customers on marked products in the supermarket.
  • They also offer personalised savings coupons based on regular purchases. These are direct discounts that are subtracted in the same purchase, available both on the website and in the app.
  • Discounts and advantages focused on different communities.
    • “Family Friendly” provides exclusive discounts for the whole family and a free nutritionist service is available.
    • “Try & Pass” allows customers to try the brand’s products and earn additional rewards.
    • “Live&Travel” facilitates travel planning by allowing customers to discover new destinations at exclusive prices.

After this analysis we can conclude that, in order to develop a good Customer Relationship Programme, the basic value proposition should include not only rational and immediate offers, but should also offer the customer emotional benefits that link them to the brand. As well as aspirational offers, which encourage them to continue to engage with the brand in order to progress and achieve better benefits and/or greater savings. In addition, digitalisation, omni-channeling, ease of use through mobile apps and tangible benefits are key elements that influence the effectiveness of these programmes.

In this analysis, we have found that each brand has taken a unique approach to its loyalty programme, adapting to the needs and preferences of their respective audiences.

As competition in the food retail sector intensifies, loyalty programmes will continue to evolve to meet changing consumer needs. Retailers must thoroughly analyse their customers in order to anticipate and adapt their strategies to their requirements and earn their loyalty.

Do you want to optimise your loyalty programme?

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