Barclaycard, BP, Debenhams and J Sainsbury have banded to launch Nectar – a joint loyalty card scheme devised and run by the founder of Air Miles, Keith Mills.
The Nectar programme will hit Britain’s high streets this autumn backed by a £50 million ($72.88m; €77.61m) marketing campaign.
It claims – wrongly – to be the UK’s first collaborative loyalty card. But it lags by five years the ShellSmart programme launched in 1997 and backed by Shell UK in partnership with the RAC, Commercial Union, John Menzies, UCI Cinemas, Victoria Wine and Vision Express.
Nectar boasts that its card will ‘capture’ fifty per cent of all British households within one month of launch, bucking a waning trend if it succeeds in doing so. Such programmes are costly to run and their competitive advantage doubtful given that almost every major retailer now touts a card.
Which is precisely the rationale underlying Nectar, claims Mills. “"A number of UK customers have become cynical about the way these programmes work. There are only so many pieces of plastic you can carry around in your wallet.”
“Nectar will almost eliminate [the promoting companies’] operating costs,” Mills explains, “which are usually between 5-20 per cent of the entire cost of a programme. The rest is the cost of the rewards going to the customer.”
Mills’ company, Loyalty Management International, is backed by US private investment bank Warburg Pincus.
Data sourced from: Financial Times; additional content by WARC staff