Woolworths learns from Qantas loyalty rewards debacle
In October 2015, Woolworths had announced the launch of a new rewards system, which gives customers “Woolworths Dollars” for the purchase of selected ‘orange ticket’ items.
The scheme revised yesterday now allows these points to be converted to Qantas points at a rate of 870 points for every 10 Woolworths Dollars earned.
This scheme had replaced the previous ‘Everyday Rewards’ scheme which offered Qantas Frequent Flyer points and petrol discounts for every dollar spent over $30.
Woolworths Dollars will remain the default option under the Woolworths Reward system; however customers who have selected the Qantas points option will be able to convert their Woolworths Dollars automatically into Qantas points.
The new scheme is anticipated to commence in a full launch in mid-2016, according to Qantas media release on 15 December 2015. Mail outs are expected earlier in the year to allow customers to opt-in to the new scheme.
Social media backlash
While Woolworths customer surveys have shown only a small percentage of customers making use of the Woolworths/Qantas rewards scheme, those customers took to social media to express their displeasure of the ceasing loyalty points for Woolworths purchases.
Other criticisms included poor rewards earn rate, the small numbers of products available to attract rewards and a lack of rewards on fresh food.
To make up for the gap between the ceasing of the current scheme and the introduction of the new opt-in scheme, Qantas has also announced that customers previously earning Qantas points via the Woolworths Everyday Rewards system will “receive regular bonus Qantas Points offers”.
The original Qantas and Woolworths rewards scheme was launched in 2009 and had allowed Woolworths customers to earn one Qantas point for every dollar spent over $30. However, this air miles points scheme was reported as costing Woolworths between $60 million to $80 million annually. Woolworths’ management are looking at ways to reduce this code and were also trying to renegotiate a better deal with Qantas.
Other recent Australian Food News articles regarding Woolworths:
- On Monday, Australian Food News reported an ACCC investigation into Woolworths for alleged unconscionable conduct in supplier dealings.
- In May 2015, Woolworths announced a three-year strategy to win back customers
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