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Loblaw finally gets into the loyalty game

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After years of competing almost exclusively on low prices, Loblaw has entered the loyalty-program game.

The parent company of the Real Canadiawn Superstore recently launched its PC Plus card, a smart loyalty program that rewards customers with points for buying their favourite items. Upon reaching a certain threshold, those points can be redeemed for cash off their grocery bill or items in the store.

PC Plus has its own app, which sends personalized offers directly to your smartphone. If you prefer to roll old-school, you can get the physical plastic card for your wallet.

Uwe Stueckmann, senior vice-president of marketing at Loblaw, said the company had offered points for many years but they were tied to the company’s President’s Choice line of credit cards and other financial-services products.

"It’s about finding the way to reward our best customers with disproportionate value, giving more value to our best customers. In order to do that, we need to know who they are and track their shopping over time," he said.

Loblaw may be late to the loyalty party, but Stueckmann is confident its offering is the most modern.

"Traditional programs in the market were designed at a time when what we’re doing wasn’t possible from a technological point of view because smartphones didn’t exist and the analytics for processing (data) was unaffordable. We’re building a program for today’s customer and using today’s technology," he said.

For years, Safeway had the grocery store-loyalty program business virtually to itself with Air Miles, but over the last number of years, Sobeys has launched its Club Sobeys card and Target came out with its Redcard. When Red River Co-op takes over four Safeway stores this spring, it will bring its popular cash-back program from its gasoline retailing to its grocery operations.

John Winter, a Toronto-based retail analyst, said PC Plus is effectively a personalized conversation between the retailer and customer on what items they like and don’t like.

"I think that a loyalty program is very positive. It gives you a direct link to the people who are signed up. There’s no question these various loyalty programs work. Loblaw had to get into it eventually," Winter said.

Michael Benarroch, dean of the I.H. Asper School of Business at the University of Manitoba, agreed. He said if Loblaw didn’t realize the benefits of a loyalty program before, it would have after it bought Shoppers Drug Mart last summer for $12.4 billion.

Shoppers has offered its Shoppers Optimum card for many years.

"I think loyalty programs are obviously an important feature of what a lot of companies are doing to retain their customers. It’s something (Loblaw) has to do to remain competitive. You can’t take the chance (of not having one) with the competition right now," he said.

PC Plus members can also access online tools, including personalized dinner suggestions, recipes, a shopping list and meal plans.


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