Qantas has played down the implications of a sudden reward switch by Woolworths, confirmed yesterday.
Woolworths has decided to scrap the rewards program which gave its customers Qantas Frequent Flyer points for grocery spend. Instead, the Australian supermarket giant will offer its nine million rewards customers cash off their grocery bills.
The move was tipped by marketing site Mumbrella and has now been confirmed.
Mumbrella reported that Woolworths was rebranding its Everyday Rewards offering and ending its Qantas Points arrangement. Mumbrella called the move “one of the biggest shakeups in Australia’s loyalty marketing sector in recent years”.
In an email to customers sent out yesterday morning, Woolworths confirmed the rebrand would take place this Wednesday, with the new brand being called Woolworths Rewards.
Woolworths customers currently earn Qantas Frequent Flyer points for each dollar over AUD 30 spent on a single shop.
The Sunday Telegraph yesterday quoted a Woolworths executive saying the chain had taken note of customer demand for an instant reward. The executive spoke of “points fatigue”, a term denoting customer distaste for lengthy lead time in redeeming a benefit.
Independent research had found 68% of Woolworths customers wanted money off their shopping. Only 9% preferred a points-based scheme, the executive said.
The Woolworths-Qantas arrangement ends on the last day of this year.
Asked at the Qantas annual general meeting on Friday about the impending move by Woolworths, Qantas chief executive Alan Joyce said the carrier did not expect any significant financial impact.
“We are still talking to Woolworths about what the deal will look like past the expiry date of the end of December this year,” Joyce said.
Latest emails from Qantas and Woolworths indicate that while Qantas is talking about a possible new partnership with Woolworths in 2016, Woolworths is not mentioning that.
Woolworths and rival Coles, who form Australia’s supermarket duopoly, are engaged in a cost-cutting war. While the two supermarket titans are preoccupied with each other, fast-growing German-based chain Aldi is gaining market-share fast. Instead of fiddling around with cards and loyalty, Aldi just offers rock bottom prices.
Last year, Aussie entrepreneur Dick Smith made the bold prediction that Aldi would wipe out Coles and Woolworths within 15 years.
Written by Peter Needham