Trend to integrating green issues into loyalty programmes

According to the report, of 27 surveyed programmes, only the highly regarded Tesco Clubcard integrates environmental issues into the programme design. Clubcard awards Green Clubcard points to members who use their own shopping bags and who deposit material into collection bins for recycling. The Green points were introduced in 2006 and today Tesco has 7 million Clubcard members earning these points.

Says Bruce Conradie, MD of Razor's Edge, “Green marketing is rapidly becoming a major issue of concern to consumer-products companies around the world and retailers are no exception. Yet, the vast majority of retailers have yet to build green elements into their loyalty offerings.

“The advantages of doing so are just too good to be ignored.”

Advantages

Among the advantages cited by Conradie are that retailers can be seen to be environmental friendly while subsidising the costs through members' contributions. Another advantage is greater ease of targeting eco-friendliness at those consumers who care, rather than at an entire customer base. This is particularly relevant to countries in which environmental awareness is low.

Moreover, loyalty-programme involvement can be a vehicle for empowering consumers, enabling them to feel they can make a significant contribution to relieving the global problem.

“Some may argue that that contribution is more psychological than practical, but either way, the retailer can do the consumer a favour,” says Deon Olivier, part of the project's research team. “Do consumers want it? Well, 7 million Tesco Clubcard members earning points says a lot. Clubcard has 13 million active household accounts, so 7 million is a very considerable portion of its membership base.”

For ideas on greening loyalty programmes, Conradie suggests retailers look for ways of rewarding eco-friendly actions taken by loyalty programme members. It could be as simple as extra points awarded on a range of eco-friendly products. Alternatively, eco-friendly products could be discounted to loyalty programme members. At the very least, rewards programme operators can allow members to donate their points to an environmental agency, such as the World Wildlife Foundation.

The Razor's Edge survey studied loyalty-programme activities only, and not retailers' overall green strategies. The latter governs aspects such as using eco-friendly suppliers, stocking eco-friendly products, and improving the eco-friendliness of logistics and operations. The researchers hold the view that the two strategies are not mutually exclusive, but should be undertaken in tandem.

The ‘Retail Rewards Programmes Around the World 2007 ‘report is available from Razor's Edge (US$1550). Go to www.razorsedgebi.com.