Research conducted by retailer Pick n Pay shows that their customers are increasingly spending their points on airtime and data through their Smart Shopper programme.
The retailer said that over R1 million worth of points has been switched for airtime and data.
The ability to use your points to purchase airtime and data has been available since October 2023.
The research showed that consumers especially use the function the days leading up to pay days.
Pick n Pay said that there are pre-selected data and airtime bundle options across all mobile networks to purchase, but they noticed that 90% of customers select their own amount based on their accumulated Smart Shopper points.
According to the e 2023/4 Truth and BrandMapp Loyalty Whitepaper around 58% of South African customers who earn less than R10,000 per month prefer benefits that would allow them to purchase airtime and data.
The whitepaper research also showed that even among “economically active customers” with higher incomes, 27% favour these digital rewards programmes.
Pick n Pay also conducted a survey among its customers and found the following data:
37% of respondents prioritised points
29% of respondents prioritised cashback
17% of respondents prioritised vouchers
The retailer said that the Smart Shopper programme is trying to evolve in order to meet the changing needs of its customer base and will use data and research to influence its rewards programmes.
“As more South Africans face economic pressures, it's not surprising that they're seeking greater value from loyalty programmes. Our Smart Shopper programme has always been tailored to meet these evolving needs, providing immediate savings off millions of products and the added benefit of earning and accumulating points for future cashback options,” Wayne Mhlanga, the digital transformation officer at Pick n Pay said.
"Our customers use these rewards strategically, opting to accumulate them over a few months to substantially reduce the expenses of a major grocery trip or treat themselves at Pick n Pay Clothing. Others indulge in frequent, smaller rewards throughout the year, such as regular airtime or data purchases using their points.”
You can also use your points to pay bills
Earlier this month, Pick n Pay said that they introduced a new “bill payment functionality” within the Smart Shopper app.
“The new function would allow customers to utilise their points to settle various bills,” the retailer said.
Another function that Pick n Pay noted that has been popular has been the ability to earn points through partners such as BP. Customers can earn points when they purchase fuel at the garage.
Pick n Pay tries to catch up to Shoprite
Pick n Pay has struggled over the last few years to claw back some market share of the grocery space, as Shoprite maintains market dominance.
There is no doubt that the company is taking major steps to address this issue through new leadership and new programmes to tempt more consumers to shop at their stores.
Research from the Outlier showed that in 2007, Shoprite and Pick n Pay were on par in almost every respect. Both companies had roughly the same revenue and employed around 60,000 people.
The only major difference is that Shoprite had 1,180 stores and Pick n Pay had 762 stores.
Cut to 2023, and Shoprite reported an annual revenue of R215 billion, which is R106 billion more than Pick n Pay for the same period, according to the analysis.
In its latest trading statement, Pick n Pay reported negative growth in retail sales for the 47 weeks trading period to January 21, 2024 which was further to the R570 million post-tax loss for the half-year period to the end of August 2023.
Pick n Pay was also given a lifeline earlier this month when FirstRand allowed the grocer to renegotiate the terms on the loans it carries on its books.
IOL BUSINESS