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Coles opens new front in supermarket wars

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Coles launches new FlyBuys offensive

In an attempt gain customer loyalty, Coles begins a massive marketing campaign.

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Coles has taken the supermarket war with Woolworths to loyalty programs, with the relaunch of its FlyBuys card which will enable customers to cash in loyalty points and save hundreds of dollars a year on their grocery bills.

The supermarket giant will send the new FlyBuys card to almost every household in Australia on Monday and blitz the airwaves with ads pushing the new scheme.

It is one of the largest mail outs in Australian history with more than eight million FlyBuys cards sent out.

Coles hopes the loyalty card is the next step in its bid to claw back market share and win customers.

Coles hopes the loyalty card is the next step in its bid to claw back market share and win customers. Photo: Sasha Woolley

It will cost the company tens of millions of dollars but Coles boss Ian McLeod believes the loyalty card is the next step in its bid to claw back market share and win customers.

The new card, which will carry over points from its existing FlyBuys card, has been simplified and beefed up so that each point is worth 50 per cent more for customers. Customers will now earn one point per $1 they spend and, when they earn enough points, can cash the points in at the till.

"Instead of waiting three years to earn enough points to buy a toaster, from day one, customers can start earning," Mr McLeod said.

Coles has also launched a world first, My5, which gives FlyBuys customers 10 per cent off five products of their choice. A new website has been set up with 5000 products and customers can pick five and get 10 per cent off the price. There will be no points expiry, unlike the existing point system which expires after three years.

Customers will go online and covert their points into FlyBuys dollars, and use them at the check-out for money at Coles, Kmart, Target, Liquorland, 1st Choice Liquor and Coles Express.

Coles has also partnered with webjet, Telstra, AGL and others, and said that combined points from partners could save customers at least $400 a year.

By spending $133 a week at Coles and buying five My5s, customers get 10 per cent off five products of their choice, saving $200 a year. If customers also use Telstra, AGL and a few of the other partners they could save at least another $200 a year.

The FlyBuys push is the next step in the Down Down campaign, which has already taken market share from Woolworths.

FlyBuys was launched more than 20 years ago and has 5 million active cardholders. The company expects to more than double this.

Woolworths has a loyalty program with Qantas to earn frequent flyer points. Woolworths' card can also be used to buy discounted petrol.

 

233 comments so far

  • I'm liking the sound of this, especially the points not expiring bit. I have never had enough flybuy points to get anything. Hopefully, without changing my buying behaviour (I never buy something just because it may offer extra loyalty points), I'll be able to redeem them for something.

    Commenter
    Ant
    Location
    Sydney
    Date and time
    April 19, 2012, 11:46AM
    • You say that now @Ant ..... Through your loyalty card away as soon as it arrives in the mail. There is no such thing as something for nothing

      Commenter
      MT
      Location
      Melbourne
      Date and time
      April 19, 2012, 12:47PM
    • Sending me a loyalty card won't change where I shop, even with the 5.7% discount they are offering ($400 saving through $6900 spend).

      If they can really offer 5.7% discount over a year, why can't they offer that same discount through price reductions?

      I suspect there is a hidden price rise coming.

      Commenter
      Wasting Their Time
      Date and time
      April 19, 2012, 1:02PM
    • Seen it all before. Coles will change the rules and points become worthless. It happened twice already with Flybuys. Worthless. Throw it in the bin.

      Commenter
      Jack
      Location
      Tooronga
      Date and time
      April 19, 2012, 1:46PM
    • It won't make me shop at Coles. If they started putting decent products back on their shelves instead of their own brands that would get me back to their store.

      My card will go straight into the bin

      Commenter
      Mel B
      Location
      Melb
      Date and time
      April 19, 2012, 2:01PM
    • Its a pity not all woolies and all coles are the same. indivodual stores are better than others in terms of range of products and presentation/layout.

      For example in inner sydney. Woolworths Town Hall - Horrible. Woolworths Lane Cove - Excellent. (Balmain used to be terrible as well, not sure if its improved)

      Coles can be a mixed bag as well.

      Prices? well always going to whinge about them. But thats why you shop around.

      Commenter
      Tom
      Location
      Sydney
      Date and time
      April 19, 2012, 2:03PM
    • @Wasting Your Time,

      They can offer such discounts because it encourages you to shop in their store more often rather than the competition. It would most likely be included in the company's marketing budget.

      Commenter
      JR
      Location
      Kingston, Qld
      Date and time
      April 19, 2012, 2:23PM
    • @MT's right, there is no such thing as something for nothing, but @Wasting Their Time, they won't need a price rise to cover it, they will make it back in spades selling the data they'll collect when you use your card. At least with this scheme they're actually paying for your data (not a lot, but something at least), unlike companies like facebook where you just give it away.

      Commenter
      Harvey K-Tel
      Date and time
      April 19, 2012, 2:25PM
    • I worked at Tesco in London for a while - I was in their statistics department, analysing data captured by their 'loyalty card' program.

      What these supermarkets know about your spending habits is frightening. Your gender, age, pets, family size, address, alcohol consumption, parties you host, menstrual cycle (I'm not kidding!), marital status, etc are all used to market products to you.

      Coles are the Facebook of groceries it seems.

      Commenter
      bugwan
      Date and time
      April 19, 2012, 3:26PM
    • Agree with Mel B. Coles Broadway no longer stocks my preferred breakfast cereal, my partner's preferred brand of soy milk or our preferred brand of maple syrup (yeah... first world problems... I know), so rather than do two trips, I shop at Harris Farm Markets.

      Commenter
      Matt
      Location
      Glebe
      Date and time
      April 19, 2012, 3:30PM

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