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All change in loyalty swap
19 December, 2018

A mixed reaction from dealers followed last month's announcement about a major shake-up in the loyalty programmes operated by Esso and BP. It was all change as Esso announced it was moving from Tesco Clubcard to Nectar and simultaneously BP confirmed it was dropping Nectar in favour of a new, yet-to-be-disclosed offer.

Some BP dealers for example, believe Nectar has run its course and are looking forward to something fresh and exciting; while some Esso dealers are rather disgruntled to be losing Clubcard particularly those near a Tesco store without fuel, who have benefited from a healthy boost in customers. No matter what they think, it's all about to change, and hopefully for the better.

Esso and the Nectar loyalty programme jointly revealed that from June 2019, customers filling up at participating Esso-branded service stations will be able to earn Nectar points on their purchases.

David Chilton, global loyalty programmes manager at Esso, explained: "Our customers are our number one priority, so we're very excited to be launching the Esso Nectar partnership, which will allow us to increase the ways in which we can reward their trips to Esso sites. The launch of Esso Nectar will enable us to continue to develop our loyalty offer in step with our customers' needs."

Esso has been working with Tesco Clubcard since 2013, during which time it's been a great success, according to Chilton: "It's brought new consumers to our sites and it's made those consumers more loyal," he explained.

"Why the change? We've been proactive in evaluating the Clubcard offer in the future, versus what we thought we could get elsewhere. We evaluated Nectar, we also evaluated other alternatives. We're continually assessing the market, what consumers want, what our branded wholesalers and our dealers want. The loyalty space is pretty dynamic.

"To keep up with trends you need to keep evolving, otherwise you get left behind. Loyalty for us, particularly in a branded wholesale model is really important we need to have a very strong loyalty offer. It's front and centre of our marketing offer We can't afford to be resting on our laurels. With Nectar we saw the opportunity to be able to be more responsive to the needs of our branded wholesalers and consumers in the longterm."

He said the two programmes were very different. with Clubcard effectively being a Tesco proprietary programme. Tesco has been very open about its strategy, and increasingly wants it to be more Tesco-focused and so are reducing the number of partners.

Nectar is set up in a very different way as a coalition programme. Despite being owned by Sainsbury's it is very focused on developing partnerships. and on maintaining the coalition structure: ""Nectar is a very powerful brand," said Chilton. "It is the largest loyalty programme in the UK with 20 million cardholders and 500 partner brands."

Patrick Rutherford, Esso UK retail sales manager, said: "Esso Nectar will provide more promotional flexibility, better data and reporting, as well as high engagement with local Nectar consumers through targeted digital communication. It will also allow flexibility to have multiple backcourt brands and we're working with Greenergy, as one of our branded wholesalers, to talk with our Esso dealers about this exciting change to continue rewarding Esso consumers' loyalty."

Part of that digital capability is going to be about enabling redemption on Esso sites," explained Chilton: "We know from experience elsewhere in the world that when you add redemption it's like a new ball game. We know that through our future digital offer with redemption it's really going to drive more engaged consumers and customer loyalty for our branded wholesalers and dealers."

Plus points include the fact that Esso dealers will get feedback about customers using their sites; the Esso Nectar programme will also be integrated with Esso's mobile payment app as well as the Nectar app. However, one current hitch on the horizon is what will happen on the Esso Tesco Alliance sites. "We're currently working with Tesco to establish what we believe will be the best fit for Alliance sites going forward," said Rutherford. "But it's unlikely to be both cards."

Dealers can look forward to a big campaign next year to promote the Esso Nectar programme, confirmed Rutherford: "We will work closely with our branded wholesalers over the coming weeks to support the introduction of Esso Nectar at Esso-branded sites to make it Esso's most rewarding programme yet," he said.

James Moir, managing director of Nectar, added: "We're pleased to be welcoming Esso on board the Nectar scheme as of next year. Nectar cardholders will be able to turn their fuel into money off their weekly shop, as well as enjoying hundreds of other rewards that Nectar has to offer."

Meanwhile BP a founding member of Nectar confirmed it would be withdrawing from the scheme in 2019 and introducing a new loyalty programme for its retail business in the UK. The programme will offer customers the opportunity to personalise their benefits with rewards on the wide range of products and services available at BP's 1,200-strong network of retail sites in the UK.

Nikki Grady-Smith, BP's head of UK retail, said: "We've listened to what our customers have been telling us. For the last 12 months, we've been working on how we can bring a compelling and rewarding offer that is personalised and reflects BP's unique combination of convenience retail and high-quality fuels and lubricants. We will be launching the new platform in 2019."

She said mobility and forecourts are changing and that BP's new loyalty platform will reflect these continued changes and support a digital platform that will allow improved engagement with customers on multiple levels.

BP is continuing to expand and develop its retail network in the UK. Over the next year, the number of BP sites featuring M&S Simply Food stores is expected to grow. The offer at BP's Wild Bean Café will be further expanded and BP Chargemaster electric vehicle charging points will be introduced to the network.

"All of these developments are in service and show our commitment to offer BP's customers convenient, differentiated and high-quality products and services throughout our retail business now and into the future," stressed Grady-Smith.


Nectar

20 million users
Launched in 2002
BP was founding member along with Sainsbury's and Barclaycard
500 partner brands
Collect one Nectar point per litre of BP fuel and two points per £1 spent in BP stores
Redeem points on a variety of Nectar rewards


Clubcard

17 million users
Launched in 1995
Many reward partners turn points into vouchers for weekly groceries, fun days out and more
Collect one point for every £1 spent in-store and online
On fuel you earn one point for every £2 spent
150 points gets you a £1.50 voucher


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