Did you know that by signing up to a loyalty scheme you’re letting your supermarket or retailer track your personal information and spending behaviour?
Companies generally want to know their customers better so they can more accurately target them with offers, and what better way to do this than to keep a record of the things people buy on a regular basis.
“Retailers get a lot out of loyalty card schemes. You use their outlets more often, you don’t use their competitors, and they get a lot of personal information that can be shared within their group of companies to target you with offers and advertising,” according to consumer champion Which?
A report by the Australian Centre for Retail Studies said that companies use loyalty programmes to collect and collate customer demographics, home address, most visited/highest value store, products purchased, frequency of purchase and transaction value, among others.
By combining all the relevant information, merchants can actually develop a portrait of their customer, showing what food they eat, shampoo or lotion they prefer and how much they’d normally spend in a week or month.
“[The word] loyalty programme is something of a misnomer,” said the report, authored by Steve Worthington and Josh Fear.
“In return for providing information about themselves and their spending patterns, members of a loyalty programme receive rewards in proportion to their spending. The company operating the programme can then use the information that these programmes generate to more accurately target offers to customers, refine their marketing approaches, and potentially to also then sell aggregated information and insights about consumer behaviour to their suppliers.”
While such studies could make a privacy-conscious consumer cringe, loyalty scheme providers argue that there’s nothing wrong with collating customer information.
“One of the main reasons companies partner with a loyalty provider such as Air Miles and its parent company Aimia is that we deliver precision customer sciences, including detailed customer insights, which allows our partners to target customers with the most relevant rewards at the right times,” said an Air Miles spokesperson.
Air Miles recently carried out a survey which found that the majority of UAE respondents are happy for organizations to use their information, to personalize product and service offers.
“This is no surprise, as people are happy to receive useful offers and information, but quickly become irritated when bombarded with more useless information in a world already crowded with commercial messages,” the spokesperson added.
