Sainsburys trials a massive Nectar shake-up – no more ‘1 point per £1’

We were invited to the Sainsburys head office in London on Wednesday for a presentation on the future of Nectar points.

Regular Shopper Points readers will remember that Sainsburys bought the business back in February.  Despite being its biggest client, the scheme had been owned by a Canadian loyalty group, Aimia.

To be honest, I was VERY surprised by what Sainsburys had to say.  Starting today, they are launching radical changes to the Nectar points scheme – but only on the Isle of Wight!  The trial will be closely monitored and it will not roll out nationwide if it goes badly.

The thinking at Sainsburys goes like this.  Giving a flat ‘1 Nectar point per £1 spent’ does not reflect your personal loyalty to the supermarket.  If you spend £30 per week – but that is your entire food bill – then you are more loyal than someone who has a £200 weekly food bill but only spends half of it in Sainsburys.

Someone who has shopped in Sainsburys for years should be rewarded more than someone who is a new customer.  Someone who visits frequently but only spends a little each time should be treated better than someone who makes the occasional big shop.

You may or may not agree with this strategy.  However, it is the basis for what Sainsburys is about to do.

Nectar points changes on Isle of White

How Nectar points are changing (on the Isle of Wight!)

The Isle of Wight is seen as the ideal testing ground.  It has, apparently, the full range of Sainsburys outlets (Local, supermarket, petrol station) and a relatively standard population, with a skew to the elderly.  This is important as the new Nectar scheme is app based and Sainsburys needs all age groups to ‘buy in’.  The older demographic will obviously be harder to win over.

This is how it will work.

A new Nectar smartphone app needs to be downloaded to your phone.  A card stored in the app can be scanned at the till (Isle of Wight tills have been upgraded) when you shop – no plastic card needed.  It looks like this:

Changes to Nectar points coming

You will NOT receive any base Nectar points when you shop.  A £20 spend could earn nothing.  However, the new Nectar app will select various bonus points offers for you based on what you usually buy.  The algorithm is continually learning more about you, and you can reject certain offers if they are of no interest – you won’t see them again.  The average customer will have nine offers at any one time.

Importantly, the more ‘loyal’ you are believed to be, the more generous your offers will be.  One person may be offered 50 Nectar points on a box of Weetabix whilst another may be offered 100 points.

If you don’t have a smartphone, there is an alternative.  You will receive a weekly email from Nectar showing you what offers are available to you.  If you click a button in the email, the offers will be loaded to your Nectar account and you will receive the points automatically if you shop and swipe your plastic Nectar card as usual.

Nectar points changes

Is this a good idea?

If you ever shop at Waitrose, you will realise that this sounds a bit like the Waitrose app-based ‘Pick Your Own Offers’ scheme.  Unfortunately, Waitrose has just closed that down – see this article from The Guardian, which includes a quote from Anika.

My concern is that Sainsburys is assuming that shoppers are willing to spend time going through the app before every shopping trip to see what offers are there.  I don’t think life works like that.  People have busy lives and I’m not sure they want to add an extra routine to their day to day tasks.

There is another aspect which worries me.  The more loyal you are, the more generous your bonus Nectar offers will be.  But how will shoppers know this?  If someone tries Nectar for the first time and only gets weak offers, are they not likely to abandon the scheme?

We will see.  Sainsburys will be monitoring the Isle of Wight trial closely and it will not be rolled out to the rest of the UK until (and unless) they are completely happy with it.

They are NOT trying to kill Nectar by stealth.  It makes no sense to buy the company just to run it into the ground, at least on purpose.

Are redemptions changing?

I asked this question and the answer was ‘no’.

I think this is another error.  Nectar desperately needs aspirational redemptions.  Redeeming 500 points for £2.50 off your shopping is not exciting.  This is now the case more than ever if the supermarket hopes that you will spend time looking at offers in the app before you shop.

That said, apparently 4 million Nectar cardholders save their points throughout the year and then redeem during December to help defray the cost of their Christmas shop.  Not everyone empties their account as soon as they can.

What you can do with the new app is set up a list of shopping goals.  If you decide to eventually treat yourself to a bottle of champagne with your Nectar points, you can select one in the app and whenever you log in you will be told how close you are to achieving it.

Conclusion

You can’t accuse Sainsburys of not being ambitious, especially as it is only two months since it bought Nectar.  I am not necessarily convinced that this new strategy will work, but they are being sensible in giving it a long trial on the Isle of Wight.  I am sure that they will only extend it nationwide if it turns out be a hit with shoppers.

 

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Comments

  1. Blue Through Crimp says:

    Completely agree with app or email options.
    There’s no way my 70-odd Year old parents would bother with the faff, and they don’t have smartphones anyway.

    • 1nfrequent says:

      I completely agree with this. I have 70-something parents too and they’re deeply technophobic (no smart phones and they rarely use their email). I mentioned this to my mum and she said she’d just cash in her points and move her spending to the Tesco 2 minutes up the street from her local Sainsbury’s.

      Personally, I don’t mind faffing about with coupons and I’ve found that the targeted offers have been very attractive (I’ve actually moved some of my shopping from Tesco to Sainsburys because the Sainsbury’s algorithms have been good at spotting what I buy and what I’m likely to buy and giving me extra points) but the blocker for me is still the lack of aspirational travel redemptions. I’ve redeemed on Expedia before and it can be handy but doesn’t get my pulse racing because I’m still paying for a luxury trip.

    • Wightwashed says:

      Too true. My very able 89 year old mother shops in our Sainsbury Local 2 or 3 times a week, but she doesn’t ‘do’ technology. As a result, if she is to benefit from this at all, I’ll have to register her card via my second email address, then she’ll either have to call the helpline to choose her offers, or she’ll have to come over to my place to choose via the PC. I think, in the end, she’ll just not bother.

  2. Comical.

  3. That new scheme is even worse than the current one. If I never know how much I am going to get, then I am not going to bother looking that up at every shop. They already do bonus points: for example, I got 300 points when I spent £5 on washing powder or 150 for a case of beer. You either get these offers after shopping or you can go to the nectar website and see some offers. Usually, they are not that amazing but the 300 points offer was quite generous. But as I said above: I know how much I am going to get and how much it is worth. I live close to a Lidl now so Sainsbury’s is seldom and these changes are not going to entice me to go there more often.

    • RussellH says:

      Quite ridiculous. We seldom go shopping with a plan – rather we like to see what is really cheap at the time – usually reduced-to-clear and buy that.
      Oh, and Lidl are currently building opposite Sainsbury’s (yes, Sainsbury’s did object, yes, the council rejected their complaint.
      Sainsbury’s can tell just by looking at my Nectar card how long I have had it – they just do not make them like that anymore!
      And no, I neither have, nor want what my little brother calls a smartarse phone.
      🙂

  4. Haha. Useless.

    I might write to Sainsbury’s and offer my services to come up with something better…

  5. What annoys me about bonus offers is that the supermarket is offering a price reduction but not giving you the money, instead offering it as points. If a product is £1.50 but Sainsburys are charging £2 with 100 bonus points, then they are keeping the 50p until the time comes when you redeem your points.
    I think supermarkets need to understand there is no such thing as loyalty these days. What are they going to offer to get me in store? This is either low shelf prices or extras like coffee and a newspaper. Look at the amount of Aldi and Lidl shoppers, no points on offer there.

    • RussellH says:

      Coffee + Newspaper – yes! Which is why we are loyal to Booths at weekends, when we can get a free newspaper provided our bill is at least £10. I know that the margin on newspapers is at least 35%, but by the time they have paid my car parking bill and given me a £3 paper, there cannot be a lot left for the supermarket!

  6. I thought April fools was 3 days ago!

  7. Alastair says:

    That’s the end of Nectar for me; I shall use my points and bin the card.

    Tesco for me from now on.

  8. Too much faff. How many people are actually bothered to check offers before they shop?

    I’m reminded of the way Lidl attacked the complexity of Morrisons price-match scheme a couple of years ago:
    http://www.cityam.com/1412425378/supermarket-price-war-lidl-attacks-morrisons-combative-ad-campaign-in-store-wars

  9. I have boycotted nectar and all business related to them ever since they admitted the racist Daily Mail into the scheme. Unless they kick out the aforementioned I’ll keep on boycotting them. That would be real change.

    • Rocket man says:

      “You Keep Using That Word, I Do Not Think It Means What You Think It Means” — Inigo Montoya

      • Cathy Donaldson says:

        Nonsense!! …..Surely Sainsbury’s can be more innovative than that??
        I do my weekly shop online ….would this then mean I would have to use another app for points? Crazy and would definitely not have time either ordering on-line or when shopping in store to visit an app.
        The purpose is surely to drive more customers to shop and with a strategy like that…… Will Not Happen!!
        Absolutely agree with other comments too!

  10. I tend to save my points for a long time and then redeem for something big. Last time I redeemed it was for a £300 Expedia voucher that saved me a nice chunk off a NYC hotel booking (flights booked with Avios, of course).

    I’m not sure I can be bothered with checking apps for offers. I just like to see it go up with spending – it’s doing that that keeps me loyal.

    A Lidl just opened closer to me than Sainsburys is… There’s also a Tesco but I avoid that if at all possible due to a disagreement with a manager there once…

  11. A minimum 1% permanent cashback for no effort is not bad especially as I think Sainsbury’s stores are clean and well laid out, usually well stocked and with good prices. However when I go shopping I go just for that purpose, not as an IT exercise, so thanks Nectar but I am not interested in the new you!

  12. MARY HOCKENHULL says:

    From the way it reads to me the shopper who goes in once a month and spends £300 will be treated as a less loyal and less valuable customer than I would be – I go in 3 or 4 times a week, doing several small baskets and I spend under £5 on each shop – often I am doing one item shops so maybe a dozen of these mini shops a week but I would be classed as a more loyal customer? ???
    Also the defunct Sainsburys mycoupons offered up to 50 items but they were never items I ever bought – only about 3 or 4 things a month where things of use, its no wonder it eventually did a death. Are the app offers – maybe between 5 or 9 going to be as useless as the old mycoupons offers?

  13. I think Sainsburys would be better improving the on line shopping experience. I have spent many hours learning how to get the best from the site. Finding exactly what I want is more entertaining than some on line games ! I already get extra points for being a loyal customer. And by compering my offers with a friend -who is a shop anywhere person – I know offers already tailored to individual cards.And yes I’m one of the 4 million redeming points en mass at Christmas /New Year or Easter. Pays for the turkey / lamb/ beef. Happy with current set up . And yes No smart phone!

    M

  14. David Butcher says:

    I cannot believe that Sainsbury’s can get themselves into such a mess. Nectar has always been playing catch up with ClubCard, but has never ever caught up. Tesco seem to me to be the innovative ones – not saying they get everything right – but boy is their Clubcard a hell of a lot more exciting than Nectar. Everything about Nectar is wrong – from the stupid 1 point for £2 system rather than 1 point for £1 – why complicate matters? This new proposal seems to put the card in the same realm as the M&S Sparks card – so complicated and such a faff. Make it simple, make it easy to understand, give us some exciting benefits. Or let it die..

  15. AmandaB says:

    Dear oh dear
    Nectar is so useless redemption wise most times I can’t be bothered to use the card. Shake up the rewards and I might be interested.

  16. Ann Piercy says:

    I never use my phone whilst shopping. Hate shopper’s who have a mobile to their ear! Disappointed with this change.

  17. If it’s anything like the current voucher spits, they’ll give me offers on items that the local store doesn’t stock !!

    If this goes UK wide it will be enough to drive me away to Tesco. (Which is about 3 times the distance from me than Sainsburys)

    Talking of Tesco, they’re bringing back the extra 1 point per 4 quid spent on Pay + ! Just got an email.

  18. I can’t see where to get the IoW app, so if I go over to the IoW (lovely place in the summer) and went into a Sainsbury’s would I get points at the normal rate or would I get nothing as I’d not have any of the IoW promotions? Same applies if someone from the IoW comes to the mainland…

    All I want from this is the ability to use my Nectar card on my phone (officially). I stopped carrying my physical card a while back as it wasn’t worth the hassle, but I’d happily fire up the app.

    • The trial is with IOW stores, so if you go to an IOW Sainsbury’s, you get no points through the usual system, but get be points through the new system is you sign up for it and use it (you can only sign up from 12 April) independently of where you live or where you usually shop.

  19. It might be worth mentioning how small scale this trial is: There are just five stores on the Isle of Wight, including only one proper superstore with a petrol station (There are three local’s and the last one is technically a full store but has more the size of a local). That is less than 0.4% of all stores, so Sainsbury’s seem to be really careful here to trial it on a very small scale…

  20. Sainsbury had a website a couple of years ago where you could add account specific bonus points. Forgot the name of it. Made me a few points before they pulled it.
    i.e . 50 points when you bought a mango, 150 when you bought 2 x Persil etc.

    Till spit wise, been getting hardly any since the Feb £10 spend bonus points promo.
    2 x double points on petrol, 1 x triple points and 80 points for the hot food counter.

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