[14:05] Tim Richards

The Evolution of Retail Loyalty Schemes

Business Loyalty and how it's changing

Those who remember the good old days of Green Shield Stamps will more than likely also know that when a business offers its customers a well-thought-out loyalty and reward scheme, the benefits can be significant both in terms of growing sales instantly and with long-term brand building. 

The Green Shield Stamp promotion started in the UK in the late 1950’s rewarding shoppers with physical stamps that were originally ‘lick and stick’ in the same way as the postage stamp of the day before today’s self-adhesive postage stamp was introduced. 

Each Green Shield stamp had a nominal value of 0.075d in old money, 0.03p today, stamps were awarded with each qualifying purchase. The distinctive stamp, complete with their perforated tear-off edge, was moistened and applied individually to complete pages within a saving book. Each complete saving book had a reward value. 

Initially, it was the small independent stores such as the local butchers, fishmongers, or fruit and veg shop that offered reward stamps. Later in the 1960’s, as the number of chain stores grew, they also joined in with the increasingly popular scheme. As participating retailers grew their customer loyalty, in turn those returning customers were awarded free gifts. 

Thrifty customers could exchange their complete books for an incredible range of products, from a set of cutleries, through to furniture or even a Silver Cloud speed boat. A 19-inch TV could be yours for 88 completed books of stamps. There were many editions of the Green Shield Stamp catalogue with a vast range of products on offer. 

Many other loyalty schemes along the same lines evolved. Notable, the ‘Co-op divi’ stamp promotion. As the name suggests, the co-op principle was slightly different and based on scheme members being awarded a dividend, but the principle of collectable stamps was the same. Other schemes such as Blue Star and Thrift Stamp evolved but did not have the same level of take-up as Green Shield which later became the Argos catalogue. 

It may be that the earliest UK schemes took their inspiration from America where Sperry & Hutchinson offered their S&H green stamps for sale to retailers who in turn passed on as a loyalty bonus to their shoppers as far back as 1896. 

The original UK stamp schemes slowly evolved into different offerings. However, until very recently a ‘stick-on’ stamp card was used very successfully for many years by the largest fast-food takeaway diners in the country. A tear off card and stick-on stamp attached to each McDonalds coffee cup meant that completed cards could be exchanged for rewards in the form of a hot drink. 

And a great many café style outlets still use the same style of physical stamp card today. A completed card is redeemed in exchange for a reward. Not that far off the original Green Shield Stamp concept from the 1950’s.  

Now the well-established principles continue to evolve, but with the same objectives in mind. Using technology, and in general, consumers’ dependence on their mobile phones, the migration to digital gathers pace.  

With the benefit of cloud computing and the uptake of consumers using mobile devices and mobile applications, we move into a completely new generation of merchants offering their customers loyalty points and rewards. The benefits to the business in terms of deployment, efficiency, and scalability are significant and it is much easier to operate a digital scheme across multiple venues and brands. 

There are many notable examples of well-established digital loyalty schemes in the UK, driven mainly by the largest retailers.  The Nectar scheme launched in 2002, originally merged existing loyalty schemes of Barclaycard, BP and Sainsburys and has since become the UK’s largest and perhaps the most notable multi-partner loyalty network with more than 18million shoppers registered. 

In today’s world, even the smallest businesses can create their own digital loyalty scheme with much of the same functionality that the largest brands offer. As an independent bar, coffee shop, restaurant, or as part of a multi-site operation, today’s EPOS till system handles digital loyalty efficiently without the need for additional back-office resource and functionality. 

Integration with the pos software means that the Vine self-order app can be used to make purchases and at the same time acquire or redeem points within a single transaction. Redeeming, for example 200 points for a free coffee, is as simple as it gets, building your brand and encouraging repeat business, time and time again. 

Savvy customers who enjoy acquiring loyalty points are fully aware that there is an exchange, and in return, the business captures their data and valuable spending patterns. And this is where the real benefit comes into play, for both the business and the consumer who want to offer and receive tailored promotions, there is a great mutual benefit.