Loyalty wars: Retailers reap rewards of membership frenzy

Supermarket giants Coles and Woolworths are also using their loyalty programs to personalise sale offers and promotions for members.

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“We have put greater personalised value through individually tailored offers, which resulted in greater membership overall and greater usage of Flybuys as customers seek better value,” Coles boss Steven Cain said earlier this month.

Meanwhile, drinks giant Endeavour Group believes Dan Murphy’s policy of beating its competitor’s prices for members of the company’s My Dan’s loyalty program remains a critical pillar of its strategy in the current spending environment.

“What we’ll continue to see in this half is perhaps more conscious consumerism as it relates to the cost of products … that stands us, I think, in good stead, when you consider the fact that members at My Dan’s – members at Dan Murphys – get an automatic price beat of everybody in the market every single day of the year,” Endeavour chief executive Steve Donohue said.

The focus on loyalty has also been big among pure-play retailers, with electronics marketplace Kogan growing its “Kogan First” subscription memberships by close to 48 per cent over the past year to 404,000 customers. The company says these customers show stronger loyalty and repeat buying behaviour.

Kogan revealed last week that inflationary pressures had led the company to raise the annual fee for the program from $79 per year to $99.

Kogan chief executive Ruslan Kogan said customers should be willing to wear the increase, given they were already getting more value from the scheme than the amount they paid each year.

“Our customers love the program, it’s very unique in the sense that we’re giving people big, chunky discounts and offers,” Kogan said.

“Customers are loving it, you can see that come through in the numbers.”