Its nice to see an idea come to market, even if it is seven years late. The idea in question is personalised price promotions for customers, recently launched by the Waitrose supermarket chain as "Pick your Own Offers". You select 10 of your favourite products, and you save 20% on them every time you shop. We suggested this idea back in 2008 for Tesco, but they never picked it up!
I think this is an interesting move for several reasons.
The Pick Your Own idea feels fresh and a bit different from the sea of different money-off promotional offers fielded by most supermarkets. And unlike many loyalty schemes that give you money off coupons for future use, this one is more immediate.
2. Mass personalisation
The Waitrose Pick Your Own is an effort to personalise what the brand offers to customers, making you feel that this is a company who does care about what you want to buy, not just what they want to push this week.
3. Potential to drive penetration
Loyalty levels between brands in a given category tend to be quite similar, with the difference in size more related to penetration. Therefore, at first hand you might say Pick Your Own Offers is wasting money on a loyalty programme. However, I think that this activity has the potential to stand out and potentially attract new shoppers, thus driving penetration. This is what happened with the mobile network O2's "Rewards" program. As Peter Field of the IPA says here, "Telling non-customers that your existing customers are well-treated is good way to attract them. Two-thirds of the very considerable growth that ensued (for O2) came from new customers".
In conclusion, I think Waitrose's Pick Your Own is a distinctive idea that has the potential to help Waitrose continue to survive and even thrive in the supermarket wars.