A retailer’s motivation for offering a loyalty card is to create a mechanism to link the customer’s identity to the content of the market basket. Every customer purchase is stored in a database which, which the retailer can mine to understand the individual customer’s purchase preferences and behaviours. Do they prefer specific brand names or do they seek only sale items? How frequently do they shop? On which days? At what times? What’s the typical spend? Do they use coupons? Redeem their loyalty points?
Armed with this information, the company can look at sales per individual to see who's profitable and who isn't – and devise marketing programs to engender loyalty and encourage increased/more profitable spending.
The company’s benefits are clear. But are the customers better off? In today’s modern world, the answer is a resounding “Yes!” While the local retailer of yesteryear might have known each customer individually, anticipated their needs, and made...
