Woolworths has become the latest Australian supermarket to introduce an exclusive product-testing group and experts say it could bring the “VIP” aspect back to loyalty programs.
“The Bunch” is open to any Woolworths loyalty cardholder, but customers must apply to join and will not be accepted automatically. Shoppers in the group (known as “Bunchees”) are then sent emails offering samples of Woolworths’ Own Brand products, which are then registered to their loyalty card and the price deducted when the item is purchased in-store.
Read more: Woolworths has Australia’s biggest loyalty program — but do rewards schemes work?
The testing group, which launched this week after a trial in 2016, uses an incentive system to get customers to leave reviews on the products they receive, with more samples made available to customers as they review more products.
Woolworths will use the data it gathers from the program to further improve its private label Own Brand range, with senior Own Brand portfolio manager Gemma Howells saying in a statement the feedback will “shape the future” of the range.
“[Customers] can experience some of our new and existing range of products and provide us comprehensive feedback on how we’re doing,” she said.
“If they like it, we know that we are on the right track, however, if they don’t, we can immediately capture, take on board the feedback and work with our product development teams to review the products.”
However, customer behavioural specialist at People Patterns Bri Williams believes the testing group is more than just a way to receive in-depth product feedback, telling SmartCompany the exclusive group would also “stimulate the buzz” and get more people shopping at Woolworths.
“Testing clubs are a good way of stimulating a bit of hype around the shopping occasion, by both offering free stuff and making it exclusive,” she says.
Discount German supermarket Aldi recently opened applications for its own testing group — a year-long membership program that provides free samples to customers and gives them “significant influence” on what the retailer will stock in the future. Thousands applied for the positions.
The exclusive aspect of these groups are what give them an edge and drive customer engagement, says Williams; those in the group feel they’re receiving a service “no one else is”, while those outside the group look at it “with envy”.
Williams says typical loyalty programs have become distilled over the years, with barriers for receiving a loyalty card having gotten lower and lower until “anyone who walks in” can receive one. Introducing these testing groups can bring back a sense of being a “VIP”, says Williams.
“Loyalty to a supermarket these days is more loyalty to its proximity and the size of its car park, those are the things that drive customers,” she says.
“A lot of businesses have missed the opportunity to treat customers who are loyal better than people who might be everyday random shoppers.”
SMEs can learn from the way these supermarkets are approaching customer loyalty, says Williams. Customers who are treated well and made to feel part of the business will become “advocates” for a brand, she says.
A “tiered” loyalty approach for businesses could help SMEs receive feedback on their products while simultaneously driving customer engagement, she says, but the key is to not alienate those shoppers who only visit occasionally.
“The opportunity for SMEs is to have tiered loyalty programs which encourage involvement in business decisions through product trials to a select group,” she says.
“This comes at a risk of alienating the rest of your customer base, so it’s about striking a balance of exclusivity, encouraging loyalty without excluding customers.”
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