Sir, Dr Clive Black is right to highlight the changing behaviour of consumers and retailers in light of the current economic conditions ('Second Opinion', 29 October). However, I would caution against 'diluting loyalty' in exchange for price drop initiatives and instead encourage retailers and brands to consider how the two can work together.

During the slow economic recovery, it is essential that retailers look to improve their understanding of customer behaviour. Data from loyalty schemes is an important source of insight, enabling businesses to communicate in a more targeted fashion, avoiding simply offering a great wave of promotions that can be irrelevant and waste valuable budgets. 

In fact, low-pricing initiatives and data-driven loyalty schemes work most effectively when not deployed in isolation. With real incomes falling, retailers will look to generate headlines by highlighting drops in prices. But without a clear understanding of which products to reduce and who to target, these initiatives can go to waste.

David Buckingham, UK general manager, Intelligent Shopper Solutions