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Mark Mortimer-Davies , the chief executive of Air Miles, says the UAE is on a steep learning curve. Pawan Singh / The National
Mark Mortimer-Davies , the chief executive of Air Miles, says the UAE is on a steep learning curve. Pawan Singh / The National
Virgin has launched The Card for use in its stores in the country. Antonie Robertson / The National
Virgin has launched The Card for use in its stores in the country. Antonie Robertson / The National

Points win prizes with store cards

Loyalty schemes, long established in the West, are now making an impact here. For shoppers, even a small return on spending is a bonus. For retailers, the schemes provide data that can help with marketing, as well as encouraging consumers to spend more.

Richelle Fosberry is worried that one day she will have more loyalty cards than she can count despite having just two so far, for Air Miles and Shukran.

But at the rate that retailers are announcing new schemes, the Dubai resident says she might eventually need an extra wallet - just for loyalty cards.

"It's a bit of an issue that you have to keep all the cards in your wallet. You might have to have more of these cards than your important ones," jokes Ms Fosberry. But if you are a fan of a particular retailer, "you just have to give your card and build the points".

Carrefour and Virgin have launched loyalty programmes in the Emirates in recent weeks, joining other big players such as Al Tayer, with its Amber card, and Landmark Group, which runs the Shukran scheme. BinHendi Enterprises is also to begin offering a luxury programme, BinHendi Stars, in a few weeks.

Aimia, a global loyalty card company that runs the Air Miles card in the Middle East, believes the penetration of loyalty cards will increase tenfold in the next five years as the region catches on to a trend that has been prevalent in other parts of the world for more than 10 years.

Shukran's membership has grown to more than 2.7 million in the region since the programme's launch in October 2010 with more than 1 million in the Emirates.

"It's about giving the best customer service," says Tarek Moussawer, the regional marketing manager at Virgin Middle East. "This loyalty programme is about giving the customer something back as a reward."

That "something" differs from card to card, but the essence of every loyalty programme is a points system. In the end, points mean rewards. But the number of points that shoppers can earn and spend in stores or on discounts varies widely, depending on the retail sector involved.

For many coffee shops, the classic offer is a free cup of coffee for every 10 bought. At Dubai's popular Lime Tree Café, 10 stamps on a loyalty card means the customer spent Dh160 (US$43.50), and that gets you a coffee worth Dh16 - a 10 per cent return.

For other retailers, shoppers have to spend more to see a benefit. At Virgin, if you spend Dh2,500, you earn 2,500 points, which earn a Dh25 voucher. Virgin cardholders also receive discounts on products as well as giveaways, such as tickets to festivals. "There's many objectives [to the card]. Number one is making our customers feel special. Giving them opportunities and rewards," says Mr Moussawer. "We are hoping this will increase customer loyalty … and we are hoping this will ultimately increase sales."

Supermarkets in Europe have long been among the major beneficiaries of loyalty cards.

The Tesco Clubcard and Sainsbury's Nectar programme have been hugely successful in boosting sales and retaining customers.

Carrefour is the first major hypermarket in the region to launch a loyalty scheme, called MyClub. For every Dh5,000 spent at Carrefour, the customer gets a Dh50 redeemable voucher - a 1 per cent return.

"This programme, combined with our increasing store footprint and continued commitment to value, quality, convenience and choice, is placing Carrefour at the forefront of the retail industry in the Middle East," Henry Changeux, the head of Carrefour in the GCC, said at the launch.

In the Virgin and Carrefour schemes, shoppers have to spend significant amounts to earn enough points to pick up products. For Al Tayer's scheme, customers need 10,000 points, worth a maximum Dh10,000, to start cashing in on the benefits.

But some shoppers say spending the money and receiving even a small percentage back is worthwhile, because they would be shopping in that store anyway.

"There's no harm in getting a card. It's no hassle," says Ms Fosberry, who adds that she has earned Dh500 in two years on her Air Miles card, which has a number of retailers on board, including Spinneys and Damas.

Mohi-Din BinHendi, the president of BinHendi Enterprises and the chairman of the Retail Business Group in Dubai, is convinced shoppers in the UAE have begun to expect discounts on products, given the popularity of some loyalty schemes, group buying websites and discount voucher booklets.

"This market is now a very discount-oriented market," says Mr BinHendi. "In America, they all have cards. It's become a way of life where you shop here and you get some value out of the cards. You are appealing to your customers and they expect to get some benefit."

But apart from retaining customers, retailers also benefit in other ways from introducing loyalty cards. They collect data from shoppers that can be used to improve marketing campaigns, give an indication of what to stock and when, as well as encouraging shoppers to spend more - and more often.

Vipen Sethi, the chief executive of Landmark Group, says standing out is vital in a retail market such as the UAE, which he describes as fiercely competitive.

"[The] UAE is extremely aggressive as a retail market," he says. "Many retailers offer great benefits to customers through shopping events all year round.

"To remain relevant in this environment, Shukran has created a system through which we offer points even during ongoing promotions."

It's clearly on the cards that loyalty schemes are here to stay.

rjones@thenational.ae

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