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September 2013

Loyalty Innovation in Retail, Global

The Goal

Founded collaboratively in 1994 by the retail chain Coles (then Coles Myer), National Australia Bank and Shell, Flybuys was Australia’s largest shopping rewards program. But over the years it suffered from low investment and attention. Members grew frustrated, while several loyalty competitors emerged. Realizing Flybuys’ potential, Coles in 2011 took complete ownership and committed to revitalizing the program.

The Initiative

In relaunching Flybuys, Coles wanted to “rip up the rule book on reward cards.” With the backing of its board and senior management, it committed to providing its members with more points, more partners and more rewards, while using the collected data to inform its business decisions. And it collects a good amount of data – Coles’ employees service more than 19 million customer transactions a week.

The first step was to simplify. Coles increased earnings to one point for every dollar spent – it had been two points for every $5 spent – and it eliminated expiration dates nor active members (a sore point earlier on). It also brought on new partners in telecommunications, travel and energy, to expand earning and redemption options. Other enhancements included the ability to load cash directly onto the Flybuys card (as a virtual gift card) and instant cash off for Coles MasterCard holders at Coles stores.

In April 2012, Coles sent out 17.3 million new Flybuys cards, enough to stretch from Melbourne to Brisbane, to virtually every household in Australia. It secured British actress Dawn French to lead an award-winning relaunch campaign, resulting in an 87% recall. In the store, it offered “docket deals,” targeted offers at the point of sale, while personalizing its messaging in direct mail and email.

The Results

Coles’ commitment to Flybuys resulted in renewed interest by members and partners, one of which saw a 12-fold return on its marketing investment. Active cardholders increased by 47%, to 6.9 million from 4.7 million, while year-over-year visits to the Flybuys website rose by 2.5 times to eventually beat all competitors as the most-visited website.

“The rate at which Flybuys attracts new members continues at about three times the level prior to relaunch. … for the first time in Flybuys history, one-to-one communication has become an integrated part of ‘business as usual.’ Additionally, buoyed by the success post relaunch in engaging with customers, Coles is supporting ongoing innovation by Flybuys as new channels and technologies emerge.”

– Coles

2013 COLLOQUY Loyalty Awards: Coles