M&S’s new scheme aims to ‘spark’ customers, but has it done enough to keep loyalty alight?

M&S’s new scheme aims to ‘spark’ customers, but has it done enough to keep loyalty alight?

With customers now more than ever aware of their worth to brands, and of the power of shopping around, the focus for retailers has shifted from winning new customers to retaining them.

M&S is just the latest retailer to announce a new incentives programme, claiming to offer a ‘members club’ exchanging points and rewards for customer loyalty.

The trouble for UK retailers is that the British public is already falling out of love with traditional loyalty programmes. Data firm GI Insight has found that while 94% of us belong to at least one loyalty scheme, half have never actually used them.

Initiatives based on collecting points are increasingly alienating consumers who yearn for more tangible rewards and live in a culture of instant gratification at the point of sale, fuelling the rise of supermarket challenger brands like Lidl and Aldi.

Points are no longer enough to keep people faithful, with recent figures showing that £4.5 billion worth of loyalty points are lying dormant across three of the most popular schemes – Tesco Clubcard, Nectar and Boots Advantage.

A good loyalty programme needs to be simple and take a tiered approach, offering rewards for every type of spender willing to engage regularly with them.

This is what all successful schemes have at the heart of their proposition. It is not immediately apparent what the points are worth within the M&S programme, outside of the ‘big ticket’ prizes that will be exclusively for big spenders.

Loyalty programmes have to be valid to all and it will be interesting to see how this develops for those customers who aren’t spending hundreds of pounds per month – what will be in it for them?

It’s also worth noting how different this approach is to that of Waitrose, whose new loyalty programme focused on everyday shopping.

That said, if Marks & Spencer can get personalisation right then the rewards could still merit a significant step ahead for the brand.

The retailer has a famously loyal customer base, so encouraging them to spend even more could bring big profit – particularly if it shepherds more of its food customers to also spend on general merchandise, which is the retailer’s weaker link.

Moving away from the core loyalty aspect, there are a number of other interesting elements to this new scheme. 

The way that it rewards different forms of behaviour, such as online product reviews and taking part in the retailer’s Shwopping recycling scheme, is particularly innovative.

With this, M&S is encouraging engagement with the brand – not just transactions over the counter. 

Yet as the scheme will launch via a plastic card only, with no plans to include a digital variant, it risks being an analogue scheme in a digital age, following many retailers still committed to card-based schemes.

With almost 38 million smartphone users in the UK glued to their screens, the demand for a seamless and intuitive retail experience has reached a tipping point.

Most of us would prefer an app over another card in our pockets, so as the mobile payments revolution gathers pace, there’s only so long retailers can stick with plastic. 

Equally, while the location-based marketing potential of beacon technology is ever closer to becoming realised, it would be a foolhardy retailer that does not invest in a mobile loyalty scheme.

By focussing on personalisation, M&S’ new Sparks offering has the potential to be a step forward. However it must keep pace with technology to retain the loyalty of changing, tech-savvy consumers.

Andy Oldham,managing director of cashback website Quidco