Client Support Wavers for UK Loyalty Card Giant

26 October 2004

According to UK tabloid the Mail on Sunday, major marketers are reconsidering their membership of Nectar, the nation's largest 'omnibus' loyalty card scheme.

Nectar, a project conceived by Air Miles founder Keith Mills (now chief executive of the London consortium bidding to host the 2012 Olympic Games), is an electronic points collection card backed by a number of major retailers and services - among them ailing supermarketeer J Sainsbury, department store chain Debenhams, the petrol retailing arm of BP, Barclaycard and Vodafone.

The Mail claims that at least two of Nectar's sponsors are unconvinced that the card has sufficient positive impact on sales to justify the costs of participation.

It quotes one sponsor who prefers to remain anonymous: "We are certainly not in a rush to renew the contract." Another opined to the newspaper that Nectar is "not quite as exciting as we were led to believe it was going to be".

The response of Nectar's client services director Brian Sinclair to the allegations was a brisk 'tush!' Says he: "It's the best possible investment. We are confident that our sponsors feel that."

Nonetheless, at least one member of the scheme, Debenhams, declared publicly almost a year ago that it was reviewing its Nectar membership [WAMN 30-Dec-04]. Contracts with the scheme's initial participants are likely due for renewal at any time now.

And some analysts have publicly questioned Nectar's efficacy, implying that participation costs outweigh the value of incremental sales. Others query the effectiveness of loyalty cards, arguing that most shoppers prefer immediate price discounts.

Data sourced from BBC Online; additional content by WARC staff