NOMPU SIZIBA: The Shoprite Group has today [October 12, 2020] launched a new rewards programme for its Shoprite branded stores. The programme kicked off today. It’s called the Shoprite Xtra Savings card and the company says consumers are set to make substantial savings.
Well, to tell us more about it. I’m joined on the line by Neil Schreuder. He’s the chief of innovation and strategy at Shoprite. Thanks very much, Neil, for joining us. So you’ve launched the new Shoprite Xtra Savings Card for your customers – how does it work, and on what sort of products can people make savings?
NEIL SCHREUDER: Thanks, Nompu. Yes, we’re super excited. It’s actually the one-year anniversary of the launch of the Xtra Savings programme in our Checkers brand, and it was met with such an incredible response from consumers that our Shoprite customers have been asking from last year, “When are you launching, when are you launching it?” So today we are proud to announce that we are launching it, but it really is meant to just re-energise what our brand stands for – kind of lower prices for everybody.
So today, if you go into a Shoprite store and sign up at any one of our 550 stores, we’ve got savings on stuff that people buy and need every day. We’ve got a R35 saving on 5kg frozen chicken; you can get R60 free airtime if you buy a Pampers value pack; we’ve got Sunlight washing powder, where you can save 30%. And, even if you’re in the mood for something a little bit fancier, we’ve got R1 000 off Johnnie Walker Blue Label, for only R1 899.There’s really a range of everything you need and everything you might want as well.
NOMPU SIZIBA: We know, like you mentioned, that you launched the Checkers Xtra Savings reward card last year. Are the two pretty similar in terms of the benefits and rewards? And if someone has a Shoprite card, can they claim benefits or rewards from Checkers and vice versa?
NEIL SCHREUDER: It’s a great question. Firstly, the programme is very similar in that our customers told us that that they don’t want peers, levels and slow earning points. They want to see material savings on their daily groceries instantly at the till without having to do anything but swipe their cards. So the programme is fundamentally based on savings on products instantly off your till slip.
But one extra benefit for Shoprite shoppers is that we also have lots of airtime deals. So you swipe your card and you’ll get free airtime independent of any network that you may be with from a mobile perspective. So as I said, Pampers – you can buy a pack of Pampers now and get R60 worth of free airtime printed on your till slip as well. So that’s the one edition.
And then most importantly, you could use your Checkers card, if you’ve already signed up, to get the deal at the Shoprite store, and vice versa. You can take your Shoprite card and get the deal in a Checkers store. You need only one card to identify yourself.
NOMPU SIZIBA: So, since starting the Checkers Xtra savings card last year, you indicate that some five million customers signed up for it. What overall benefit did consumers get?
NEIL SCHREUDER: In the first year alone we’ve given back more than R1 billion in real instant savings. So over a R1 billion given back consumers. We built the programme on our true customer-centricity, which means we will never put smoke and mirrors in what we’re giving you. It’s very clearly marked on the shelf, on your toll slip, and in our advertising. And we’ve managed to sign up 15 000 customers every single day for the past year, since we launched the programme at Checkers. So customers have responded in their numbers.
NOMPU SIZIBA: How were you able to be profitable in offering these kinds of savings? And why is it important for Shoprite to have these kinds of reward programmes in the first place?
NEIL SCHREUDER: I think it’s important for us.
Our number one priority as a business is to become more customer-centric.
That means we want to make more decisions based on our customers and what they are telling us. The reward programme helps us to just get to know our customers better, what they buy often, how old they are, where they shop, where they may work, when they would like to get savings, how they want to get discounts, what kind of discounts they get. And to do that for the group’s 24 million consumers is very, very difficult manually. So the card is just a way for us to identify customers when they’re shopping and tailor products, promotions, and prices over time to their shopping needs. So our hope is that by giving customers more transparent value, they pick us more over time, and then there’s a commercial upside for us as well.
NOMPU SIZIBA: Now, the Covid-19-related national lockdown has brought about serious economic harm, including millions of jobs lost and an uncertain future. What are you reading into consumer needs and priorities right now?
NEIL SCHREUDER: I think the timing of it for a programme like this that gives extra back to customers couldn’t be better. Household incomes are definitely under pressure after Covid. Many millions of people have lost their jobs, and we are seeing people look for what we call unavoidable value. You can’t hoodwink consumers. You need to be clear about what you offer. It needs to be clearly marked. It needs to be honestly priced. Consumers are way too savvy to fall for old retailing tricks and gimmicks. There’s definitely an increased sense of making your money go further. People are clubbing together. We’re seeing a lot of group buying, for instance, but most certainly people are almost desperate for increased value. And retailers that manage to deliver value better than anyone else will win over time.
NOMPU SIZIBA: Of course, one of the issues that’s been highlighted for corporates who are savvy and on top of the trends that are happening in the country and in the world is ESG. Beyond those who can come in and afford to buy and get the basics from a Shoprite/Checkers store – with the help of their trusted Rewards card, of course – what efforts will Shoprite be making in ensuring that leftover food on your shelves that couldn’t be sold on the day is not wasted and can go to those in need, as we do understand that the pandemic’s effects will see even more people in society go into deeper poverty?
NEIL SCHREUDER: We have multiple arrows in our quiver when it comes to hunger alleviation. It’s our number one social cause that we champion, being a food retailer. So, on the one hand, we try and drive everything to be as affordable as possible. Our group’s purpose is to be Africa’s most affordable and accessible retailer. So we’ve got a programme, for example, where a loaf of bread costs R4.99. Our mantra is that a single R5 coin should be able to fill your tummy. And we’ve been subsidising that below any other retailer for the last three years, with no price increase. If you go and check other retailers, they charge more than double that for a loaf of bread. We’ve committed to not raising those prices.
We also have an entire range of hot foods in our deli that are all under R5. We really target the lowest price point possible, so that people can afford decent food on their table. And then we complement that with a partnership with many FoodForward partners, where food waste is given to them to distribute to the needy.
NOMPU SIZIBA: That was Neil Schroeder. He’s the chief of innovation and strategy at Shoprite.