Coles announces game-changing plan
Coles is set to launch a revamped loyalty program that could give it the edge over Woolworths in the supermarket wars.
Called Flybuys Max, the new program will give shoppers 5 per cent off all fresh produce and free delivery on online purchases in return for a $10 monthly or $99 annual fee. Coles currently charges between $4 and $18 for online delivery.
To sweeten the deal, Flybuys Max subscribers will also be offered cheap movie and theme park tickets and even access to an online film streaming service.
Coles has taken a page out of online retail giant Amazon’s book, with its subscription service which provides free delivery, access to streaming services and discounts products.
Marketing Focus’ Barry Urquhart told finance expert Ross Greenwood Coles has “underperformed” online.
“At the moment, online and home delivery is not performing. They’ve got to reach out and get better engagement with their customers,” he said.
Woolworths currently has a service called Delivery Saver that costs the same as the new Coles subscription, but only offers free delivery if a customer spends more than $100 in a single transaction. There are also no extra offers such as discounts off products.
Coles told news.com.au the Flybuys Max is currently a “trial” and there’s no rollout date yet.
However, Flybuys general manager Alex Chruszcz said the feedback had been “very positive” from the customers who had trialled it, but the final product might change.
“Flybuys Max has been developed to offer members a range of compelling long-term benefits they want like discounts on fresh food, movie tickets and theme parks, free Coles Online delivery, bonus Flybuys points at Coles Express and online video streaming.
“It’s currently being tested with a small group of members so that we have the best possible offers available when it rolls out nationally.”
Gary Mortimer, a professor of marketing at Queensland University of Technology, said Flybuys Max would mainly benefit customers who regularly shopped online, a market worth more than $3bn a year.
“It’s a smart move getting ahead of the game and it really is the first move Coles has made ahead of Woolworths for the last couple of years.
“Online shopping represents around 3 per cent of total food and grocery sales, so while it’s still a small proportion of the market, it’s certainly growing as more and more people choose this particular channel.”
But he noted Coles’ larger rival would see Flybuys Max as a threat.
“I imagine Woolworths will be very, very quick to do something similar,” he said.