As Marks & Spencer relaunches Sparks this week, Retail Week reviews some of the top loyalty schemes around the world and pulls out lessons on what works in loyalty today

Marks & Spencer has revamped its loyalty scheme Sparks by scrapping the current points system in favour of instant rewards for shoppers at the checkout.

The changes have been made following feedback from 250,000 Sparks members and are designed “to deliver immediate and clearer value”.

Many retailers have loyalty schemes but few encourage true loyalty and change how consumers shop.

Former TCC Global insights director Bryan Roberts says: “Loyalty cards, in theory, don’t actually work. If on average shoppers have 4.5 loyalty cards, they’re not actually being loyal, as if they were they’d only have one.”

“Customers want to see tangible benefits and rewards for spending more to keep them shopping with that retailer.”

Starcount chair Edwina Dunn, who helped launch Tesco’s groundbreaking Clubcard in 1995, says: “The most clever loyalty schemes are those that encourage customers to do more and activate more. A lot of them have got it wrong because they simply give away discounts – obviously customers like this, but it doesn’t actually change their behaviour in any way.

“You want your customers to visit one more time and buy one more item, and if they don’t retailers are stuck with the cost of launching the scheme for little return.”

Retail Week rounds up some of the best loyalty schemes around the world and picks out key lessons.

Sephora Beauty Insider

sephora

French beauty giant Sephora operates a points-based loyalty programme with three tiers – Insider, VIB and Rouge.

Customers are automatically bumped up a tier if they spend more with the retailer and more points are earned per dollar spent on each tier.

Shoppers have the opportunity to spend points on products as a reward, with more options available to members on higher tiers.

The points can then be redeemed at the Sephora Rewards Bazaar, which is open every Tuesday and Thursday at 12pm EST online and in-store, offering free sample products, Sephora-themed novelty items and beauty experiences including make-up classes.

Beauty Insider members are also gifted with free products on their birthday and receive discounts throughout the year – with higher-tier members receiving better offers and the ability to share them with their friends and family. 

Loyalty lesson: A tiered scheme, where rewards clearly improve by reaching the next loyalty level, incentivises shoppers to spend more. Offering experiences, as well as products, is also a smart move as it feels like a true treat for shoppers.

Tesco Clubcard and Clubcard Plus

The Tesco Clubcard is another points-based loyalty scheme where points can be converted into vouchers that can be redeemed at a variety of locations including restaurants, hotels, cinemas and theme parks, or used to pay for train tickets or other services, allowing customers to personalise their rewards. 

tesco clubcard

“For a lot of shoppers, vouchers for a meal out or a theme park are quite aspirational if you’re on a limited budget, so they can see the real value in collecting points,” says Roberts.

Tesco introduced Clubcard Plus in October last year, which adds an extra level to the rewards scheme.

For £7.99 a month, Clubcard Plus members get 10% off two big shops per month in store, up to a maximum of £40. Members also get 10% off other Tesco brands in store such as F&F and Tesco Mobile users are awarded double the usual amount of data.

Loyalty lesson: The ability to collect rewards from other businesses, rather than just spending in-store, is a real bonus for customers and allows them to derive real value from the scheme.

Clubcard Plus moves the loyalty scheme into a subscription, where guaranteed lower prices will lock customers into shopping with the grocer.

North Face VIPeak Rewards

Outdoor brand North Face’s loyalty programme offers members benefits beyond simply money off their next purchase.

North Face VIPeak

As well as the usual perks such as early access to new products, the retailer understands that for its most loyal customers outdoors is their passion so chooses to reward them with things to fuel this from adventures with athletes and exclusive access to expeditions.

The scheme allows customers to redeem a reward each quarter for points collected during that period, which encourages shoppers to engage with the brand on a year-round basis, not just during ski season.

Loyalty lesson: Think beyond just offering money-off purchases and offer unique experiences that cannot be replicated by other brands. Offering quarterly rewards encourages more regular shopping, which could be a smart way to encourage more frequent buying for retailers with seasonal peaks.

Tarte Cosmetics Team Tarte

Tarte

US make-up brand Tarte does not just reward purchases, it incentivises all customer engagement – be it opening an email, reacting to social media posts, referring friends, completing surveys or leaving reviews. Each interaction earns points that are redeemable against product purchases.

Team Tarte members can log into an activity page that tells them what they can do that day to earn extra points, as well as earning 100 points per full-sized and 50 points per mini-sized product bought. 

Removing the transactional element of the loyalty scheme keeps customers constantly talking about the brand even if they can’t afford to keep buying all the time.

Loyalty lesson: Rewarding engagement as well as loyalty turns customers into free brand ambassadors.

Net-a-Porter EIP

EIP NAP

Designer fashion website Net-a-Porter’s EIP (Extremely Important People) programme gives true VIP treatment to its biggest spenders.

Those who spend more than a whopping £55,000 a year get access to an array of premium benefits including their own personal shopper, complimentary worldwide delivery, priority access to new products, and invitations to private sales and fashion events.

EIPs can also order up to 30 items to try on at home without paying upfront – payment is taken for the items they keep and the rest is picked up directly from their doorstep.

Net-a-Porter’s scheme takes exclusivity to the next level to retain customers with the highest spending power and offer them the best service possible to keep them spending more.

Loyalty lesson: Always reward your very best customers with the status and experience they deserve. Offering exclusive access from everything to Sale products to fashion events, customers feel like a true VIP.

Starbucks Rewards

Starbucks’ loyalty programme digitises the good old-fashioned coffee-stamp card. 

Starbucks Rewards revolves around its mobile app, which customers can scan to earn points, as well as use to make orders.

Starbucks app

Members earn two stars for each $1 they spend in-store and can only start redeeming for rewards at 25 stars, which will earn them an extra espresso shot, flavouring or dairy-substitute milk.

More stars are redeemable against bigger products, for example, 200 stars get a customer a free sandwich or protein salad. 

Rewards card users are also eligible for free refills of brewed coffee or tea.

The app is the biggest draw for the coffee chain’s scheme, however, as it gives users the opportunity to order and pay for their coffee to be collected, saving valuable time.

Customers can also participate in games and special offers on the app to earn more points.

Loyalty lesson: Ditch the plastic. Shoppers do not want to delve through their wallets so adopt an app to make things easier.

Starbucks has upped the convenience further by making its app transactional, which gives a quicker and easier way to pay, eliminating the need for shoppers to queue.

Boots Advantage Card

Boots Advantage Card is one of the UK’s best-known loyalty schemes and more than 85% of women over 15 are active users.

Boots Advantage Card

Members earn four points for every pound spent with the retailer. Each point is then worth 1p, which is redeemable against future purchases.

Advantage Card users can also sign up to extra clubs including the Parenting Club, which gives them extra points on baby products, or the Over-60s Club, where extra points are earned on Boots-branded products such as No.7 make-up.

Boots builds up a wealth of data on customer preferences from the data collected, which it uses to better target customers. It also uses this information to offer personalised rewards.

Loyalty lesson: Boots’ scheme keeps things simple – customers can see their points accumulating and know that they’ll be able to spend them in future. Personalisation rewards make customers feel valued and also give retailers more information about what products they want

Read more: Deep dive - Can M&S become the nation’s favourite shop again?

Marks & Spencer has gone from turnaround plan to turnaround plan since the turn of the millennium, but time is starting to run out. As Britain’s favourite retailer loses relevance to today’s shoppers, Retail Week asks: can M&S be saved?