LONDON, September 16 (Reuters) – UK supermarket group Sainsbury’s (SBRY.L) will offer its customers lower prices, deeper customer loyalty and lower costs with its digital loyalty program and self-scanning service in the latest wave of innovation to the industry.
Dominated by Tesco (TSCO.L) and challenged by the German discount groups Aldi and Lidl, the British supermarket sector has been characterized by fierce competition and low margins for decades.
Sainsbury’s, the UK’s second largest grocer, said the move to offer bespoke digital discounts through its Nectar program is the most advanced for UK grocers, despite following similar targeted initiatives by some US and French grocery retailers.
Going beyond the traditional loyalty model of customer spend converted into points that can be redeemed for products, it aims to encourage shoppers to use its SmartShop scanner service either on cell phones or on their smartphones, which ultimately increases the number of manned checks reduced. Outs required in the branches.
Sainsbury’s said Nectar app members who shop in stores will have access to lower prices on a selection of up to ten branded and Sainsbury private label products selected for them weekly starting next Wednesday.
In comparison, Tesco’s “Clubcard Pricing” program (TSCO.L) offers all Clubcard members lower prices for certain products, but the offers are not personalized. The smaller retailer The Co-Op offers discounts on fewer items based on buying behavior.
Sainsbury’s chief marketing officer, Mark Given, told Reuters that the price cuts – called “My Nectar Prices” – would be at least 10% per product.
He said more budget-conscious customers would likely get regular discounts on vegetables, fruits, meat, fish and poultry – the main fresh food battleground with Aldi and Lidl, which has forced the entire sector to cut prices.
Loyal Sainsbury’s shoppers are rewarded for things they normally buy and also offer other products they are interested in according to their dates.
“Advances in cloud computing and automation mean you can now process truly unique offerings that are tailored to you with more real-time data,” said Given, adding that his team worked on the personalization algorithms and engines for up to five years have.
The “My Nectar Prices” offers are offered in addition to other loyalty point offers already available in the app.
Sainsbury’s now has eight million customers registered with the Nectar digital app, and CEO Simon Roberts is aiming for 10 million by the end of next year.
The new offering should also encourage greater adoption of the self-scanning SmartShop service, which is on the rise during the COVID-19 pandemic as shoppers seek less human contact.
Sales grew 173% in fiscal 2020-21 and 30% of all cell phone sales were made in supermarkets through SmartShop, more than double the 2019-20 14%.
Given said Sainsbury’s would evaluate customer feedback before finally launching “My Nectar Prices” on the online grocery channel.
Sainsbury’s shares are up 28% so far this year, fueled by bid speculation related to the Morrisons acquisition saga (MRW.L) and signs that Roberts’ “Food First” strategy is beginning to take effect. Continue reading
Reporting by James Davey Editing by Kate Holton and Mark Potter
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