Marks & Spencer to launch nationwide loyalty card

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By: Wise Marketer Staff |

Posted on June 3, 2003

In the UK, Marks & Spencer's preliminary results statement revealed that the high-street retailer plans to launch its credit card loyalty programme nationally in the second half of the year, following a successful pilot of the scheme in Wales.

According to the preliminary results statement for the 52 weeks ending 29th March 2003, Marks & Spencer has maintained profitability through strong cost control and reduced bad debts in its existing business, while simultaneously investing in and piloting the credit card and loyalty programme (see Nov 20th, 2002).

Luc Vandevelde, chairman for Marks & Spencer, said, "This year we have once again concentrated on restoring the fundamentals of our business and winning back the trust of our customers."

Loyalty pilot
Back in November 2002, when the pilot of the M&S credit card and loyalty programme was announced, the company planned to mail every member a loyalty statement every three months, along with reward vouchers, and a personalised brochure highlighting relevant special offers. The vouchers provided in the mailing are useable in any Marks & Spencer store nationwide.

The key measures being assessed during the trial were the take-up of the new card, average balances, the number of new cardholders, propensity to borrow, card penetration, and incremental sales. On each of these measures, the pilot was deemed successful.

Programme costs
The total revenue costs incurred on the card and loyalty programme during the year amounted to approximately 25 million. These costs covered the development of technological and operational infrastructure as well as the costs of running the pilot.

The revenue cost of rolling out the card and loyalty programme is estimated to be approximately 60 million over the 2003/04 financial year. This sum would cover the cost of developing further infrastructure while becoming a new credit card provider, the cost of providing customer service capabilities, and acquisition and card issue costs.

Future growth
"We are excited about our potential to drive future growth by deepening our relationship with our most loyal customers and extending our appeal to our more occasional shoppers," explained chief executive, Roger Holmes.

In the coming year the retailer will open another 50 food-only stores, launch the combined credit and loyalty card on a national basis, and also open a new concept 'Home store'.

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