• Monday, March 04, 2024
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Is your loyalty card faithful to you?

loyalty card

Ngozi Adaeze, 42, a housewife, shops regularly in one of the popular supermarkets around Iyana-Ipaja, a suburb of Lagos. As part of the reward of being a loyal customer over the years, she now enjoys a reward card which she could use to make a purchase based on points accumulated.

“The more I shop, the more points I get. I was even surprised when they started sending me newsletters on new products and prices,” she told BusinessDay.

The urban population in Nigeria is growing at 4.6 percent per annum. By implication, an increasing number of Nigerians now participate in the cash economy and have become consumers.

However, one would expect that this would translate to booming sales and profitability for major retail outlets and supermarkets in the country. Sadly, this is not the case.

The recent economic recession in the country, the worst in 25 years, left several consumers with a shrinking wallet while supermarkets and other retail outlets battle with low patronage from customers.

BusinessDay checks show that major supermarkets now have an incentive programme to reward their loyal customers.

A visit by BusinessDay to Spar store on Opebi, Ikeja area of Lagos, reveals that every customer enjoys a point for every N200 spent which can be used to shop once the points get to 500 and above. It also affords loyal customers to shop for free with their points.

“All our regular customers have loyalty cards as it is their reward,” a shop attendant at Spar told BusinessDay.

At the popular Ebeano Supermarket, customers that purchase N200,000 worth of goods enjoy a loyalty card of N2,000 with which such customers can make a purchase at that price.

“And if it is N400,000, then you have N4,000 free purchases. All you have to do is a request for it and under two minutes it will be available. We started giving out these cards last year when we opened our branch; other branches are also doing it. It helps attract customers and it has been cool so far, people have been appreciating it,” Paul, a staff at Ebeano, told BusinessDay.

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At Hubmart stores in Ikeja GRA, a point is equivalent to as low as N100. This is to incentivise customers to shop more and get more points.

Customers, however, expressed divergent opinions on the new initiative by the supermarket.Nike Adeosun, a customer, said the reason she does not use her loyalty card is that she does not think the reward is that great.

“I feel they just give you loyalty cards just to get your information and send newsletters, so you are not really getting value for the loyalty,” she said.

Another customer, Ruth Orji, said she enjoys and gets value for the loyalty reward system programme.

“I remember when I wanted to buy my foundation and I didn’t have enough cash, the foundation was N6, 000 but I had N4,000, so they used my accumulated points of N2,000 to add to the N4,000 I had,” she said.

The retail space has become very competitive with various outlets churning out initiatives that could boost sales and profitability.

Femi Adelu, a research analyst, said the introduction of loyalty cards is expected to revive the sluggish growth in the economy.

“This is not new as most retail stores in other climes adopt this same incentive, but what is important is the value the customers get in exchange for their points,” he said.