Progressive health retail outlet Wellness Warehouse is using insights gained from its loyalty programme to drive merchandising and promotion decisions – and is seeing the benefits.
“The major insight has been that our most loyal customers are nothing like our typical customers,” says Group Systems Manager Elaine van der Westhuizen. “Our top products by sales are one thing – the products our loyal customers are buying are different. They are buying a lot more beauty and food products, especially gluten-free. So we’re expanding our ranges in that area, and targeting promotions much more specifically at those customers.”
The road to these insights hasn’t always been easy. Wellness Warehouse, which opened its doors for the first time in July 2007 and now has eight stores in greater Cape Town, went through two other loyalty programme providers before establishing its current relationship with Innervation.
“We had two bad experiences, one of which did real damage to our brand because the loyalty points system was so unreliable,” says Van der Westhuizen. “We were ready to dump the whole concept of a loyalty programme, but couldn’t disappoint the customers who had stuck with us through all the problems.”
As a result, says Van der Westhuizen, “our expectations were fairly low – we just wanted a loyalty system that we and our customers could trust, and that would be easy to administer. But that was the least of what Innervation delivered. Now that the system has proved itself, and we know what we can do with it, we have a lot of ideas for future expansion.“
Van der Westhuizen says the changes prompted by data from Innervation’s loyalty system have already produced a visible impact on turnover. “It’s given us a great deal of confidence,” she said. “Our core group of loyal customers has doubled since we introduced the new system.”
Now, she adds, “we can start to look at how we truly nurture and reward those customers. For example, we had one product that was such a slow seller we wanted to stop stocking it. But the loyalty data showed there is one customer who buys 20 units a month, so we make sure their favourite store always has it in stock. The store managers are starting to take that kind of initiative.”
“It’s every retailer’s dream to be that proactive for their customers,” says van der Westhuizen. “But as much as we wanted to, we could never do it before because we just didn’t have the information. In fact, when the first few monthly reports from Innervation landed it felt like overload – and the results were so surprising we weren’t sure whether to trust them. Now we’re confident that it works, we have lots of ideas for how to use the information to deliver a better experience for our customers, and we’re seeing positive results.”
The next phase of the relationship between Wellness Warehouse and Innervation will see the loyalty programme go online, as well as the introduction of a coupon and voucher programme. “We have all the physical and systems infrastructure we need at the till in place,” says Van der Westhuizen. “Now we’re excited to see what more we can do with it.”