Woolworths reviewing partnership with Qantas Frequent Flyer.

[ABC1]

Goodbye Woolworths after Dec 31st for me

 

[Captain Halliday]

Strangely, I don't remember being asked my preference or take at any stage on this. Did any other AFF members do a survey that hinted at this possibly taking place?

I remember about 3-4 months ago completing a survey about EDR. It wasn't sent by Woolies, but rather some research company. I didn't think much of it at the time, but maybe, just maybe, I was actually asked.

 

[Mattg]

Re: Everyday Rewards is becoming Woolworths Rewards

A vibrant discussion is already underway here: http://www.australianfrequentflyer....iewing-partnership-qantas-frequent-71514.html

 

[amaroo]

Interesting numbers..

Woolworths claims its research suggests only 9 per cent of customers were chasing frequent flyer points when they shopped at Woolies compared to 68 per cent, who wanted cheaper groceries.

Less than half of Woolworths 9 million card holders are linked through to the Qantas Frequent Flyer program

 

[love_the_life]

Just received the email from WW - Coles is looking good. The only reason I shop at WW is for the QFF points and anyway what members told them they really want money off. They didn't ask me.

Members told us what they really want is money off their shopping, so we’ve changed points for Woolworths Dollars! On Wednesday, Everyday Rewards will become Woolworths Rewards. Your new card will arrive shortly, so look out for it in your mailbox. In the meantime, just keep scanning your current card. This means your existing member rewards are changing. You can continue to earn Qantas Points through Woolworths Rewards, but only until 31 December 2015 – for more information, check out our FAQs.

 

[Himeno]

Apparently how it will work is that selected items marked with orange labels will earn a certain amount of "Woolworths Dollars". These dollars can then be put towards savings at the checkout in blocks of $10, and you can store up to $50 worth of Woolworths Dollars on your account at any one time. The example the rep gave is that a $10 product might earn $1.30 in "Woolworths Dollars", but apparently that is merely an example - not an actual earn rate.

I would expect that the current discounts offered on the orange "EDR discount" special tickets are the sorts of earn you'll get to WWD. I see the auto $10 save with no chance of saving up past $10 or picking when to use them will be a big issue and lead to many complaints at the checkouts.

(Where did you get this "Store up to $50" thing from? There is no mention of that in any document I've seen in WOW Store Portal or StoreNet)

If they really wanted to offer savings, why not just make the hypothetical $10 item $8.70 in the first place and ditch the whole scheme?

Because the items earning WWD aren't always the same. They will change week to week.

 

[Mattg]

I would expect that the current discounts offered on the orange "EDR discount" special tickets are the sorts of earn you'll get to WWD. I see the auto $10 save with no chance of saving up past $10 or picking when to use them will be a big issue and lead to many complaints at the checkouts.

(Where did you get this "Store up to $50" thing from? There is no mention of that in any document I've seen in WOW Store Portal or StoreNet)

The Woolworths rep I spoke to on the phone said that Woolworths Dollars would be redeemable in blocks of $10, and there would be an option once $10 was reached to either redeem the dollars or accumulate and store them on the card, up to a value of $50.

 

[Himeno]

The Woolworths rep I spoke to on the phone said that Woolworths Dollars would be redeemable in blocks of $10, and there would be an option once $10 was reached to either redeem the dollars or accumulate and store them on the card, up to a value of $50.

@_@ Sounds like they are telling the store teams something different to what they tell the call center.

 

[eastwest101]

Woolworths claims its research suggests only 9 per cent of customers were chasing frequent flyer points when they shopped at Woolies compared to 68 per cent, who wanted cheaper groceries.

You can come up with any numbers you want if you couch the questions to get the result that you want. e.g

"We polled a panel of concerned citizens and there was universal support for eliminating capital punishment."

* panel consisted of inmates on death row

Classic case of a false 'either' 'or' question.

Less than half of Woolworths 9 million card holders are linked through to the Qantas Frequent Flyer program.

Eh? What happened to the 10 million number? Someone has been fibbing.

 

[amaroo]

With one strike of the pen thru the QFF agreement Woolies has gone from funding $80M a year to zilch ... bet those orange tickets are linked to supplier funded discounts. Smart!

 

[Princess Fiona]

Interesting numbers..

Lies, damned lies and statistics

I wonder what the proportional spend of the 9% points chasers was

 

[Himeno]

With one strike of the pen thru the QFF agreement Woolies has gone from funding $80M a year to zilch ... bet those orange tickets are linked to supplier funded discounts. Smart!

You should hear how much some suppliers pay Woolworths for product placement etc.
Pipsi and Coke are often paying millions to get displays and prime ends for their stock. Twinings paid on the order of $80 million to get an entire bay of a new tea flavor in 400 stores about a year ago...

 

[amaroo]

Lies, damned lies and statistics

I wonder what the proportional spend of the 9% points chasers was

80/20 rule

 

[Mattg]

With one strike of the pen thru the QFF agreement Woolies has gone from funding $80M a year to zilch ... bet those orange tickets are linked to supplier funded discounts. Smart!

I don't think you're too far off. I bet the suppliers are going to be paying Woolworths to put those orange tickets on their products, or at least covering the cost of the "Woolworths Dollars". If they play their cards right, the new loyalty program could effectively cost Woolworths nothing.

 

[Himeno]

Interesting numbers..

lol.
The customers in my store are more like 30% don't give a **** about rewards in any way. 30% are after points. 25% are after discounts, and the 15% would rather just steal something.

 

[Himeno]

80/20 rule

You mean the rule that says 80% of sales are from the normal shelve location. only 20% are from off located displays?

 

[amaroo]

You should hear how much some suppliers pay Woolworths for product placement etc.
Pipsi and Coke are often paying millions to get displays and prime ends for their stock. Twinings paid on the order of $80 million to get an entire bay of a new tea flavor in 400 stores about a year ago...

IIRC 20 years ago they were getting $35K per end, per store, per week - there is a reason the EBIT is $3.75B

 

[Dr Ralph]

With all this talk of ditching WoW (for greener pastures) and assuming most here purchase 5% off wish gift cards via cash rewards or motor clubs (expert level tight-coughs), can a similar 5% discount also be found for Coles and Myer gift cards?

If not the weekly shop just got a whole lot more expensive...

Coles 5% are also available. David Jones 10% are fairly easy to obtain as well.

 

[Dr Ralph]

I call BS.... but here's my thinking:

1) If shoppers prefer discounts over QFF points why was there even a tie-up in the first place (didn't woolworths do their homework before entering into a $100m+ deal?)
2) When you ask people point blank what they want in a product, 99% of the population can't accurately articulate and analyse their own thought process. If Apple had asked people what they want in a phone back in 2005, the answer would be 'more memory, more menu options'. It takes a visionary to read between the lines and you can't get this from asking straight up questions like Woolworths is implying, which means they didn't do their homework.
3) Assuming homework has been completed - Woolworths new program would need to have a lower cost base than the QFF alternate, which means there will be less rewarding compared to what QFF points would have cost (factoring in breakage etc..) This means it will be less rewarding for consumers.
4) The beauty of QFF points was that it's an aspirational, subjective reward. Those 25,000 points could mean a $200 voucher or a $2000 flight upgrade depending how you viewed it. The new Woolies program is nothing more than a discount program. No aspirations, no subjective value. No gamification and therefore no long term loyalty/stickiness.
5) Why call it Woolworths Dollars? I'll get over the unimaginative name for a second which any primary school kid could dream up. Using the word dollars instantly locks down the value and creates no room to grow the program into anything more later on. People will link $1 AUD to $1 WWD and means devaluing the currency at any point in the future will make the conversion difficult for many.
6) There will be a portion% of people who don't shop at Woolworths any longer and another % that will change spending patterns to be under $30 (thus messing with average basket size and a bunch of other metrics)
7) The move may attract more low value customers to the brand who are seeking discounts rather than points (Aldi strategy?)
8) Keeping a QFF option to satisfy that market segment seems logical. Terminating entirely suggests some type of commercial conflict or some new thinking none of us can fathom
9) Not delaying the changes after the Flybuys/Etihad deal to re-evaluate..? Or was it? Hard to tell.
10) I doubt we'll see any major (20%+) shift in numbers, but if we did - this would directly affect product placement revenue for Woolies.
11) With more affluent customers who fly and driven by miles shifting to Coles - this adds value to flybuys program, thus hurting other Woolies owned businesses in the process.
12) Potentially now shines more light on Etihad... double loss to QF.
..Lots more... too tired to list it all out.

So either Woolworths has totally failed to have understanding of the loyalty business (which will cost them big bucks, market share, wasted resources, overhead of running the program, additional manpower for customer service etc..) - or the statement about customers wanting this all lies.

AND/OR

QFF didn't bring out the big guns to prove how moving away from QFF as an inducement/data partnerships/knowledge sharing would ultimately cost woolworths even more. Fortunately there is available data for QFF to gauge the impact and re-engage WOW.

AND/OR

QFF wanted better terms, higher point cost or some type of commercial conflict

Either way it's a mess. I don't see much positive coming from this change in the near future.

Seems like sound logic for 4:25am

 

[Ansett]

And They are gone after 31 December 2015

~Why are you removing Qantas Points?

We asked members what they really want from a rewards program, and the answer was clear — money off their shopping. So, we changed points for Woolworths Dollars.

With Woolworths Rewards, you enjoy more relevant benefits than ever before. And because life's busy enough, we designed it so that everything happens automatically. No vouchers. No admin. No hassle. Simply scan your Woolworths Rewards card at the checkout in-store, or login when shopping with Woolworths online, and the rewards will take care of themselves.

While you’ll no longer earn Qantas Points using your Woolworths Rewards card after 31 December 2015, rest assured there won’t be any changes to your Qantas Frequent Flyer membership. You can still access and redeem your Qantas Points at qantas.com/frequentflyer

Woolworths Rewards