By James Davey
LONDON, Sept 16 (Reuters) - British supermarket group
Sainsbury's will offer lower prices to customers using
its digital loyalty scheme and self-scanner service, deepening
ties with shoppers and cutting costs in the latest wave of
innovation to hit the industry.
Dominated by Tesco and challenged by German
discount groups Aldi and Lidl, Britain's supermaket sector has
been marked by fierce competition and low margins for decades.
Sainsbury's, Britain's second largest grocer, said the move
to offer tailored digital discounts via its Nectar scheme was
the most advanced for UK grocers, though it follows similar
targeted initiatives by some U.S. and French food retailers.
It goes beyond the traditional loyalty model of customer
spend translating to points that can be redeemed on products and
is designed to encourage shoppers to use its SmartShop scanner
service, either with handsets or on their smartphones, which
ultimately will reduce the number of manned check-outs required
in stores.
Sainsbury's said that from next Wednesday, Nectar app
members shopping in stores will be able to access lower prices
on a selection of up to ten branded and Sainsbury's own-brand
products selected for them on a weekly basis.
In comparison, Tesco's "Clubcard Prices" scheme
offers lower prices to all Clubcard members on certain products,
but the offers are not personalised. Smaller retailer the Co-Op
offers discounts on fewer items based on spending habits.
Mark Given, Sainsbury's chief marketing officer, told
Reuters the price reductions - called "My Nectar Prices" - would
be a minimum of 10% per product.
He said more value conscious customers would likely get
regular discounts on vegetables, fruit, meat, fish and poultry -
the key fresh food battleground with Aldi and Lidl that has
forced the whole sector to cut prices.
More loyal Sainsbury's shoppers will get rewarded on things
they usually buy and also offers on other products their data
suggests they would be interested in.
"Advances in cloud computing and automation mean you can now
process genuinely unique offers that are personalised to you
with more real time data," Given said, adding his team had been
working on the personalisation algorithms and engines for up to
five years.
The "My Nectar Prices" offers will be additional to other
loyalty points offers already available on the app.
GOING DIGITAL
Sainsbury's now has eight million customers registered with
the Nectar digital app and CEO Simon Roberts is targeting 10
million by the end of next year.
The new offering should also encourage a greater uptake of
the self-scanning SmartShop service, which has taken off during
the COVID-19 pandemic as shoppers seek less human contact.
Sales were up 173% in the 2020-21 financial year and in
supermarkets with handsets, 30% of all sales were through
SmartShop, more than double the 2019-20 level of 14%.
Given said Sainsbury's would assess customer feedback before
eventually rolling out "My Nectar Prices" to the online grocery
channel.
Shares in Sainsbury's have risen 28% so far this year,
buoyed by bid speculation on the back of the Morrisons
takeover saga and signs Roberts' "food first" strategy is
starting to work.
(Reporting by James Davey Editing by Kate Holton and Mark
Potter)
