Aldi says loyalty programs are a waste of time and only benefit shareholders.
Aldi has attacked Australia’s two biggest supermarket chains, saying that loyalty schemes manipulate shoppers and benefit only shareholders.
The German discount chain says loyalty programs are a waste of time, and cost shoppers up to $1500 per year while forgoing savings at the checkout.
Consumers can wait years before accruing enough points to earn free or cheap flights, discount vouchers and household appliances, says Aldi.
Aldi has launched a biting, yet slightly tongue-in-cheek, advertising campaign to alert members of Coles’ Flybuys and Woolworths’ Rewards programs that they are being duped by the promise of rewards instead of paying low prices every day. It has also launched a “loyalty calculator” to show customers how long it will take – and how much it will cost in real dollars – to get a reward.
Aldi’s calendar shows that if a customer spent $175 a week on groceries, it will cost $2000 and take just under three months to earn enough points for $10 off their next shop. It also revealed that if a customer earnt one point per dollar spent, a one-way Qantas ticket from Sydney to Brisbane, usually costing just $135, would take two years and $18,400 to redeem.
Aldi head of customer service Adrian Christie said that a shopper waiting to earn enough points for a Tefal frying pan, which costs $60, would have to spend $1500 and wait 19 months before having enough points to redeem it.
Aldi claims the same customer would save $60 on their grocery bill in a fortnight by shopping at Aldi and be able to buy the frying pan outright.
“It’s not a mistake that the words ‘loyalty’ and ‘scheme’ are used together as they are a scheme; there is some sort of manipulation going on,” Mr Christie told news.com.au.
Research shows that nine out of 10 Australians are in a loyalty program, with 60 per cent of them saying these schemes influence the way they shop and 36 per cent saying they spend more because of perceived benefits.
“A loyalty program is great for insights that can manipulate and can help shape the market. But in terms of value, is that value for the customer or for the shareholder?” he said.
“Loyalty schemes entice you to spend more, so customers need to realise what they are giving up for the rewards.
“If you spend $20,000, that might get a new toaster but if you were buying a car and the salesperson said, ‘We’ll throw in a free toaster,’ I’m not sure it would get you over the line.”
Mr Christie says that customers could save, on average, $28 on a $175 spend and put the savings towards purchases. Aldi claims that its customers save an average of $1500 per year by being ‘loyal’ to the German brand.
“Our approach to loyalty is to provide good prices,” said Mr Christie.
Are you a member of a loyalty program? Do you find you are sufficiently ‘rewarded’? Or do you pile up points without purpose? Would you trade a better deal on points for lower everyday prices?