Loyalty cards are now widespread in the UK, with most of the major food and non-food retailers offering a range of rewards to loyal shoppers. One of the notable exceptions to this rule has been Marks & Spencer, the rejuvenated food and clothing retailer - until now.
The company yesterday announced that a new combined credit card and loyalty programme called &more would be launched throughout the UK on 6 October, allowing regular shoppers to earn points which can then be exchanged for vouchers redeemable in all M&S outlets.
M&S only began accepting credit cards other than its own Charge Card in 1999 after years of dwindling sales - the percentage of sales made using the company's own card dropped from a high of 30 per cent to the current 17 per cent - but the new &more card will now allow its customers to use their M&S cards in all stores which accept credit cards.
The existing 2.6 million Charge Card customers will be automatically upgraded to the new system throughout September, with new customers allowed to apply from October.
Roger Holmes, M&S chief executive, said that the new loyalty programme would provide the company with a strong platform for future growth, after an 11-month pilot scheme operating in South Wales had proved to be a great success.
With an APR of 14.9 per cent, the current retail standard, the new &more card will be cheaper than the M&S Charge Card, which charged a whopping 18.9 per cent APR. In addition, customers will earn one point per £1 spent in Marks & Spencer UK stores, and one point per £2 spent outside Marks & Spencer stores.
The jury is still out as to whether loyalty card schemes really work, with some operators such as Asda opting for lower prices across the board while others, such as Tesco and Sainsbury, continue to expand the range of products and services available to card holders.
The combination of the points programme with the credit card could prove to be decisive. Retail banking in the UK is becoming increasingly popular, with the stores often able to offer rates which are far more attractive than many of the high street banks, but forcing M&S customers to use their credit card to earn points (other schemes reward customers however they pay, offering more points for those who choose to pay with their store credit card) could be seen as somewhat stingy.
After all, M&S financial services arm, rebranded as M&S Money, will benefit from the interest payments on the card, essentially giving back their own money to its loyal shoppers in the form of vouchers.
But M&S has always had a loyal clientele - customers who are prepared, for example, to pay the relatively higher prices for the company's food products because of the chain's commitment to quality. Rewarding these customers is a good way of keeping them loyal - and of course if the company can make a bit more money for its financial services arm on the side, so much the better.