Lessons in loyalty from Canada's Sobeys and Loblaw

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Tim Mason

Three significant innovations in the retail and grocery landscape have taken place in Canada and the north west of the US in recent weeks. A fortnight ago in Seattle, we saw the Amazon Go cashier-less c-store open for the first time. And two of Canada’s largest grocers have just announced partnerships with leading UK tech companies - Sobeys with Ocado, and Loblaw with Eagle Eye.

The Canadian grocery market is worth $75bn annually, and these high-profile commitments to digital and omnichannel retail are a clear sign of the direction the industry is heading in. So, what can UK businesses learn?

Amazon Go is an exciting step forward in retail tech. But in order to enter the store, you have to have already downloaded the app and linked it to a credit card.

No bricks-and-mortar retailer would dream of creating these barriers to entry. However, they should not underestimate the importance of accessing customer data, as evidenced by Amazon’s success to date. There are less onerous ways of gathering and using this data - through personalised digital promotions, digital loyalty schemes and other shopping-enhancing digital tools. But what won’t wash is not knowing who your customers are, and not having an owned direct channel for communicating with them. The competitive disadvantage to the Amazon model will be insuperable.

The way to compete is with a single customer view across a truly omnichannel retail experience. This is precisely why Sobeys has partnered with Ocado. Sobeys can now become an omnichannel brand in a country that has previously been regarded as too large, with too widely distributed a population, to make e-commerce viable.

And finally, Loblaw. With apologies for self-promotion, it is Eagle Eye powering this merger of two of Canada’s most popular loyalty schemes to create the PC Optimum programme. Using Eagle Eye’s flexible technology, Loblaw has been able to maintain the points-earning characteristics of both original schemes.

Loyalty schemes can no longer be about blanket discounts and price, but must now feature personalised promotions, greater convenience, and flexible redemption options. For Loblaw, this means customers can earn and redeem points in almost 2,500 locations and online, where they will get targeted, personalised offers. This means Loblaw is able to measure every promotion and then re-tailor, ensuring maximum consumer satisfaction and sales uplift for a defined investment.

It is important UK grocers understand these initiatives and what is at their digital heart, ensuring innovative British technologies are not creating more value abroad than at home.

Tim Mason is CEO of Eagle Eye

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