Sainsbury's confirms renewal of Nectar partnership

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By: Wise Marketer Staff |

Posted on March 29, 2007

Sainsbury's confirms renewal of Nectar partnership

The UK supermarket chain Sainsbury's has renewed its contract with Loyalty Management Group (LMG), operator of the Nectar coalition loyalty card programme, and has said it will continue to offer Nectar points in its stores.

According to LMG, Sainsbury's will also be the first major retailer to use the programme operator's new data analytics service to gain additional insight into customer shopping trends from detailed analyses of transaction and loyalty card data.

LMG's data analytics service will analyse the products bought by Sainsbury's customers to help improve understanding about shopping and buying habits. This is expected to allow Sainsbury's to make better-informed decisions and provide better-tailored offers to its customers. The supermarket says it will also be sharing information with its suppliers to help them understand the purchasing behaviour of customers, with the aim of aiding both new product development and customer communication efforts.

Reviewed and renewed According to Sainsbury's CEO, Justin King, the company had reviewed its participation in Nectar as part of its 'Making Sainsbury's Great Again' recovery plan, and the renewal of the contract suggests that the supermarket is confident that its customers value the rewards they can earn through Nectar. King added: "We are also broadening our relationship to enhance our ability to use the data the programme provides, for the benefit of our customers."

Alex Moorhead, CEO of LMG, commented: "This renewed commitment is another significant milestone for Nectar, with over 10 million households participating and having enjoyed over £800 million of rewards. The extension of our relationship through the provision of more detailed data analysis will enable Sainsbury's to make better informed decisions across its business and more tailored offers to customers."

Nectar's growth Nectar now claims to be the UK's largest coalition loyalty programme, with half of all UK households now holding at least one Nectar card, with which they collect points on everyday shopping. Nectar has grown from its 4 launch partners to 16 companies issuing Nectar points nationwide, with a High Street presence in more than 6,000 outlets.

Partnership in the programme has also helped other partners, such as the department store Debenhams, to expand, LMG told The Wise Marketer. Rob Templeman, CEO for Debenhams, explained: "Nectar has played an important part in helping us develop a greater understanding of our customers and their shopping habits. We use the programme to understand potential catchment areas for new store openings as well as enhancing our offer to existing customers."

Real-time redemptions coming The department store has recently run a trial programme in which Nectar collectors can redeem their points in real time for full or part payment toward purchases in the store. The uptake among consumers has been encouraging, and the retailer now plans to extend real time redemption to all of its stores.

Nectar's operator has also said it is to simplify the way collectors can use their rewards. Starting in mid-April 2007, Nectar collectors visiting a Vue cinema will be able to swipe their Nectar card for free entry (costing 1,000 Nectar points). In fact, collectors can already swipe their Nectar cards for money off at Debenhams, catalogue retailer Argos, and Sainsbury's. They can also present their Nectar cards at Blockbuster to pay for DVD rentals (costing 500 Nectar points), Tussauds Group attractions (including Alton Towers, Thorpe Park, and Chessington World of Adventures) and Legoland to pay for tickets (starting from 4,300 points per adult, and 3,000 points per child).

LMG's structure LMG is a privately-held company that develops, owns and manages large retail-based customer reward programmes and provides database and analysis services for retailers and service providers globally.

The group owns and operates the Nectar brand as well as the Air Miles brand. LMG now employs some 175 staff at its headquarters in London, and also has operations in Newcastle (England) and Mumbai (India).

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