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The John Lewis loyalty gamble

John Lewis loyalty cardDepartment store legend John Lewis announced this week that it will finally be launching a full-blown loyalty card. It’s a big expensive step for them but it’s one that, if done right, could be a game-changer, in one stroke closing a key gap vs Amazon and Tesco, and setting them apart from virtually all other big-ticket retailers.

Unfortunately there’s a good chance that it won’t do either.

Whether free treats for collecting points actually drives loyalty, is still up for debate, and that seems to be how the new card is being positioned. But one thing’s for sure, the segmentation and personalised communication that loyalty card data can bring is hugely valuable to any retailer that knows how to use it, and has the breadth of offer to make it work.

For example, Tesco recently explained that pop-tarts are usually indicative of teenagers in a house, and when, in September, they stop being bought, it’s a sign that parents have become “empty-nesters”. That can signal a change in buying patterns across categories as diverse as alcohol, home furnishings and travel insurance. A change which Club Card enables Tesco to anticipate and capitalise upon. Often, the more diverse the transactions, the more insightful the data.

So why isn’t John Lewis linking its card with Waitrose data? There may not be 100% crossover, but there would be more than enough to build a far richer customer picture than from John Lewis transactions alone. That scale of data could set John Lewis apart from every other specialist retailer, none of whom have access to such a rich seam of potential insights. It’s a huge opportunity to miss... But it’s not the only one.

The key differentiator between John Lewis and the other “big data” players (like Tesco, Sainsbury’s and Amazon) is quality, especially of service. In the big-ticket departments, those competitors that do have loyalty data don’t have expert sales staff. And those competitors that do have specialist staff don’t have big data. That puts John Lewis in a pretty unique position.

Which begs the question: how can they use their loyalty card data to step-change their quality of service, particularly through their in-store staff? If they can manage that, they wouldn’t just be closing a gap on the "data haves", they’d be opening a big new one on everyone.

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