Loyalty programme helped Checkers steal R4bn market share

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Checkers says Xtra Savings helped it gain R4 billion in market share in the last financial year.
Checkers says Xtra Savings helped it gain R4 billion in market share in the last financial year.
  • Checkers says its rewards programme has been instrumental in it gaining R4 billion in market share from competitors.
  • It launched its rewards programme in October 2019, after other retailers.
  • The retailer had to be creative and offered instant cash savings.

Checkers says its loyalty programme, Checkers Xtra Savings has helped it take away roughly R4 billion in market share from competitors in the last financial year.

The food retailer launched rewards card in October 2019, quite a late arrival as most food retailers including Pick n Pay, Woolworths and Spar had been rewarding their customers for being loyal for years.

Checkers said on Tuesday that since Xtra Savings was launched a year ago, it has been signing up more than 15 000 customers daily. The programme now has more than 5 million members.

"Xtra Savings has been instrumental in Checkers gaining R4 billion in market share from competitors in the last financial year, according to Nielsen. It has seen a phenomenal uptake," said the company in a statement on Tuesday.

When Checkers finally joined the rewards game, it had to be more creative as competitors like the Pick n Pay Smart Shopper which had already amassed a large member base and constantly innovating and offering personalised discounts to keep customers engaged.

Checkers decided to deviate from the rewards points system used in many retailers' loyalty programmes, choosing to offer instant cash savings instead, similar to Woolworth's WRewards.  

The retailer launched its offering at a time when usage and novelty of loyalty programmes was wearing off among South Africans. According to the 2019/20 Truth & BrandMapp South African Loyalty Landscape Whitepaper, usage of loyalty programme in the country had declined by 7% points since 2017. According to BrandMapp, the top reason why people stopped or didn't even begin to use loyalty programmes was that they did not spend enough to earn "decent" rewards, too complicated to understand or because the redemption of points was too complicated.

Neil Schreuder, chief of strategy and innovation for the Shoprite Group said Checkers believed that it was the fact that its customers don’t have to jump through hoops to receive discounts that helped the retailer gain market share. He said the discounts Checkers offered also came at a crucial time as South Africans have become more price sensitive.

"We are delivering lower prices in a time that shoppers need discounts most.  When customers are truly rewarded without the smoke and mirrors, they do come back," said Schreuder.

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