You are what you eat

There has been a long running loyalty program battle in the UK between Tesco (who were first to launch a loyalty card strategy in 1995) and Sainsburys who are a member of the Nectar coalition loyalty program (which I've written about before here). Much of the reporting about these retailers right now relates to their use and expenditure on their respective loyalty programs.

The battle heated up just before Christmas with Tesco doubling the points customers could earn - effectively doubling the value. Sainsbury's seems ave followed suit this month with an increase in the number of nectar points offered.

Tesco also mailed out GBP 67 million of vouchers in November that would normally have been sent in February.

So - who's winning?

Christmas trading results are due out in the next few days for Tesco but there's a concern that they've not got it right. Some analysts expect that their sales growth will be below that of their rivals. They're also concerned that Tesco will include GBP 100 million worth of loyalty vouchers in their sales figures (though the same analysts suggest that if they do this - decreasing their reported figures by 1.5% will deliver a true reflection of like-for-like sales).

Sainsbury's has already reported better than expected results for the Christmas period. In headlining these results - Sainsbury's CEO Justin King noted that "There will be a big difference between the haves and have-nots, with data. Those with loyalty data can see what customers are doing. If they are going elsewhere for a certain product, we can incentivise them to buy it with us.”

This is language that, in the past, would only have been heard from Tesco and their loyalty program partners dunhumby. In the Nectar program this data is worked by LMG Insight and Communication for Sainsbury (full disclosure : LMG is a sister company to Carlson Marketing. We're both owned by Groupe Aeroplan).

At Carlson we have always promoted the use of data to drive customer programs. The data in question for these two giants of UK grocery retailing is all the food their customers buy. The data that flows from customer's purchases of food is so accurate in determining their future buying habits that, in the words of the team at LMG, "You are what you eat".