Russian retailer X5 reports successful loyalty launch

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By: Wise Marketer Staff |

Posted on June 6, 2007

Russian retailer X5 reports successful loyalty launch

In Russia, the retailer X5 Retail Group has announced the successful results of the launch of its 'Club Perekrestok' loyalty programme, which was unveiled in retail stores at the end of 2006.

Three Perekrestok stores in Khimki launched the Club Perekrestok pilot programme in November 2006, with reports within one month of the programme's enthusiastic uptake by consumers.

Moscow also added From January 2007 a number of the group's retail outlets in Moscow and the surrounding region began exchanging Perekrestok and Merkado discount cards for Club Perekrestok loyalty cards, with the card being distributed to all applications from April onward.

The programme replaced the group's original discount and sale programmes, although Perekrestok kept its existing 5% discount for pensioners, disabled people, and other socially vulnerable consumers. The Club, in cooperation with municipal authorities, also gives priority to families with multiple children.

Earning and burning Programme members who make regular purchases at the chain's stores can earn points using their Club Perekrestok loyalty card, and then pay for purchases with the points they accumulate.

Points are earned with every purchase, with 10 points being equivalent to 1 Ruble (approx. US$0.04). Bonus points are also awarded under several circumstances: for purchases over 500 Rubles made in the morning; for buying Perekrestok private label brands; for purchasing brands on special promotions; or if it is the customer's birthday.

Member benefits Programme membership costs 99 Rubles (approx. US$3.85) at the time of application, although the membership fee is immediately credited to the loyalty card in the form of 1,000 points. The Wise Marketer notes that this method achieves two significant objectives for the programme operator: First, it removes consumers' willingness to simply acquire multiple cards (as often happens when a free-to-join loyalty card is left at home) and, second, it encourages new members to experience the redemption process very quickly - a vital step in programme engagement, as the member soon experiences the feeling of getting a bonus (even though it isn't actually free).

When joining, participants receive two plastic cards: a primary card (that allows the earning and spending of points) and an additional card (which only allows points to be earned). Club Perekrestok then uses checkout receipts, text messages, the programme web site, a telephone call centre, and e-mail to communication with programme members on a regular basis.

Membership growth After one months of general distribution of the cards, some 12% of purchases and 18% of turnover in the Moscow region's stores are already attached to the loyalty card. The average checkout bill of loyalty card users has also been an average of 60% bigger than non-members.

On 1st May 2007, the Club claimed membership of over 200,000 active points collectors.

Supplier targeting The programme's ability to help sell additional products has also attracted the interest of some of Perekrestok's suppliers, and test campaigns are now being conducted, catering to customers in a number of carefully targeted segments.

Initial and follow-up communications are now being made, in which customers are offered additional points for buying the products of the sponsoring supplier.

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