Article by Magda Osman: “Ken Murphy, CEO of the British multinational supermarket chain Tesco, recently said at a conference that Tesco “could use Clubcard data to nudge customers towards healthier choices”.
So how would this work, and do we want it? Our recent study, published in the Scientific Journal of Research and Reviews, provides an answer.
Loyalty schemes have been around as far back as the 1980s, with the introduction of airlines’ frequent flyer programmes.
Advancements in loyalty schemes have been huge, with some even using gamified approaches, such as leaderboards, trophies and treasure hunts, to keep us engaged. The loyalty principle relies on a form of social exchange, namely reciprocity.
The ongoing reciprocal relationship means that we use a good or service regularly because we trust the service provider, we are satisfied with the service, and we deem the rewards we get as reasonable – be they discounts, vouchers or gifts.
In exchange, we accept that, in many cases, loyalty schemes collect data on us. Our purchasing history, often tied to our demographics, generates improvements in the delivery of the service.
If we accept this, then we continue to benefit from reward schemes, such as promotional offers or other discounts. The effectiveness depends not only on making attractive offers to us for things we are interested in purchasing, but also other discounted items that we hadn’t considered buying…(More)”