Popular Australian grocery retailer Woolworths recently announced the launch of member-only pricing, giving customers another option to spend less — not more — on their shops. This strategic shift in the Australian market mirrors a global trend, with more retailers amplifying value for members in a loyalty program amid soaring inflation and cost-of-living crises.
Woolworths Supermarkets and Metro stores introduced in-store, member-only pricing for Everyday Rewards members on Wednesday, 23 August. The member pricing, which is also available at Big W, provides discounts exclusively for in-store and online shoppers in the Everyday Rewards program. This has added a new third pillar to the ways Everyday Rewards members benefit from the program.
Three Ways Everyday Rewards Members Benefit
Earning Rewards: Members earn AU$10 off their shopping bill each time they accumulate 2000 points, offering tangible benefits for their loyalty.
Rewards App Boosting: Members can expedite their point accumulation through the Rewards app by Boosting personalised offers, accelerating their journey towards earning discounts.
Exclusive 'Member Prices': Simply by scanning their Rewards card at the checkout, members gain access to special 'Member Prices' in-store, adding another layer of value to their shopping experience.
This multi-faceted approach not only incentivises shopping but also strengthens the bond between Woolworths and its customers, in particular those who prefer different ways of being rewarded to the traditional points loyalty scheme.
Woolworths’ Member Pricing: A Significant Shift for Australian Grocery Retailers
According to Jonathan Reeve (pictured), VP APAC at leading loyalty platform Eagle Eye, this move signals a strategic shift in the Australian market now that the country’s largest retailer Woolworths appears committed to the member-pricing approach.
Reeve says, “It’s great to see Woolworths testing out new approaches. We know there is a group of customers who may not respond to loyalty points schemes but will respond to discounts, so this is a way for Everyday Rewards to appeal to this group.
“Member pricing is already established in Australia at retailers like Rebel Sport and Dan Murphy’s. In grocery, Coles Group and Flybuys have also been experimenting with member pricing, However, Woolworths' move seems to be more of a long-term strategy, indicated by the Group’s CEO Brad Banducci's note, ‘We’re starting small but have exciting plans…’”
The Power of Savings and Loyalty in Tough Economic Times
In light of soaring inflation, high rent and mortgage repayments and skyrocketing energy bills, consumer spending is tightening. This means grocery retailers must find even more innovative ways to remain competitive. “In tough economic times when many households are working within a fixed budget, immediate discounts may be more useful to customers,” Reeve says.
As the overall global economy seems to be inching towards recession, it’s no surprise when Reeve shares that this exclusive ‘member-only pricing’ trend is gaining momentum worldwide. He explains, “This strategic shift in the Australian market aligns with a similar pattern observed among global grocery retailers, like Tesco which led the way with 'Clubcard Prices' in the UK. The British multinational grocer is witnessing significantly increased loyalty scan rates, especially for smaller-size basket shops with its ‘Clubcard Prices’.
Unlocking Savings and Enhancing Loyalty with Member Pricing
Member pricing comes with advantages and disadvantages, according to Reeve, In particular, retailers need to be mindful of how member-only prices are perceived by shoppers who are not in the program. However, one thing is certain, he says, “It undeniably amplifies the value for members in a loyalty program, especially in times of economic hardship. As a result, retailers with member pricing consistently see increased loyalty scan rates, especially for smaller basket-size shops.
“For example, Dan Murphy’s in Australia offers member-only discounts and has one of the highest scan rates of any Australian loyalty program, with 90 per cent of sales linked to a loyalty ID. This delivers more data to the retailer and also means its program is more valuable because it can better deliver other products like personalised offers or retail media to CPG (consumer packaged goods) brands.”
As for the future, Reeve concludes, “It will be fascinating to see how Woolworths’ consumers and other retailers react. In the UK, we've seen many other retailers following in Tesco's footsteps.”
About Jonathan Reeve, Vice President APAC, Eagle Eye
With nearly three decades of experience, Jonathan is a seasoned expert in the retail industry, collaborating with retailers worldwide to ensure they remain at the forefront of digital innovation. After successfully operating his own consulting business for five years and authoring the influential book, "Retail's Last Mile: Why Online Shopping Will Exceed Our Wildest Predictions", Jonathan is now the Vice President for the Asia Pacific region at Eagle Eye, a SaaS technology company transforming marketing through real-time personalised performance marketing. In this role, he helps APAC businesses develop and implement world-leading digital marketing programs that drive customer acquisition, interaction and retention.
About Eagle Eye
Eagle Eye is a leading SaaS technology company enabling retail, travel and hospitality brands to earn the loyalty of their end customers by powering their real-time, omnichannel and personalised consumer marketing activities.
Eagle Eye AIR is a cloud-based platform that provides the most flexible and scalable loyalty and promotions capability in the world. More than 750 million personalised offers are executed via the platform every week, and it currently hosts over 100 million individual loyalty members for businesses worldwide. We are trusted to deliver a secure service at hundreds of thousands of physical POS destinations worldwide, enabling the real-time issuance and redemption of promotional coupons, loyalty offers, gift cards, subscription benefits and more.
The Eagle Eye AIR platform is currently powering loyalty and customer engagement solutions for enterprise businesses all over the world, including Asda, Tesco, Morrisons, Waitrose and John Lewis & Partners, JD Sports, Pret a Manger, Loblaws, Southeastern Grocers, Giant Eagle and the Woolworths Group.
In January 2023, the Group acquired France-based Untie Nots, an AI-powered personalised promotions business, adding Carrefour, E. Leclerc, Auchan and other leading brands to its European customer base.
Visit www.eagleeye.com for more information.
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