Earlier today, we noted that loyalty programs often result in consumer spending rather than saving. Here’s some concrete local proof: customers who get sent gift card rewards by Myer typically end up spending more than triple the value when they use the card.
Picture by Timothy H
That interesting factoid emerged in a discussion of Myer’s marketing plans in the weekend Australian Financial Review:
The Myer One program comes at a cost: the retailer rewarded customers with $51 million in gift cards last financial year. But it also delivers returns: Myer One customers spend on average 3.3 times the value of the gift card on redemption.
The lesson? If you’re being disciplined, only buying stuff you actually need at Myer and then only spending the gift cards you get sent, you’re using the system efficiently — but you’re also a statistical anomaly. (Myer has 3.7 million customers on its database, and more than two-thirds of its sales are to members of the Myer One program.)