Reward Cards - Still Rewarding?

Faffing with the contents of my wallet today in the supermarket, I began wondering about reward cards - are they still worth the plastic they’re printed on? They’ve been around in the UK for over a decade, and two major supermarkets - Tesco and Sainsbury’s - still use them. I have one of each. However, I sometimes wonder why I don’t throw them away - cash rewards of approximately 1% (presumably all that the supermarkets can afford) hardly seem worth the bother of carrying them.

Safeway (now Morrisons) scrapped their loyalty scheme in 2000, citing that it wasn’t worth the money to run it. They may have been right. Nevertheless, Tesco, now the UK’s biggest grocery retailer, still retains their scheme, and as the Economist states, the information goldmine (the only reason the supermarkets run loyalty schemes) is lucrative - although they don’t say exactly how lucrative. Safeway’s decision indicates the margins can be thin. Despite the low return on hassle I mentioned above, though, there are still plenty of takers - empirical evidence would suggest that more shoppers have loyalty cards than don’t.

There have been other issues; for example, loyalty cards came under fire from David Blunkett in 2004 in a fairly obvious attempt to draw away attention away from the problems surrounding the ID card debate:

Mr Blunkett said the cards produced key details about people's shopping habits but were accepted because they were run by private firms. People should not distrust ID cards because they are a state idea, he said. ... Holding up a Nectar card, he said people voluntarily signed up to allow such details to be collected through such loyalty cards by private firms. "There is a real issue about how that should be overseen and supervised," said Mr Blunkett.

Mr. Blunkett presumably ignored the fact that voluntarily signing up to handing over data about tomato-buying preferences was a more respectable practice than being forced to hand over more medical information to travel. Fortunately, his illiberal idea didn’t seem to gain much traction. In all fairness, though, it’s quite likely than many folks don’t know that their data is used in this way; for that, The Guardian deserves some praise for educating the public.

Maybe reward cards will die out eventually. It’s hard to back that up with public data, although I’m sure Tesco have a hard time quantifying the exact benefit they get from theirs (how do you measure repeat custom accurately - with and without the card?). If I’m right, though, I hope they die because they don’t make business sense - not because the government regulates a harmless practice out of existence. Interestingly, Wikipedia alleges that this has already happened in California.

It’ll be interesting to see where the reward industry is in five years time.

Is There a Long Tail of Supply?

Chris Anderson’s The Long Tail, although now passé for the trendiest MBAs, still seems to be kicking around as a buzzphrase. The canonical example is Amazon - they have a vast range of books available because the cost of maintaining a huge catalogue is low (many books are listed but aren’t in stock; other books are in stock at a third party supplier so Amazon effectively outsource the storage; an online database can be essentially unlimited in size at minimal cost).

This is the long tail of demand; it’s successful because although many sales come from (say) the top 100 books, a significant proportion of sales come from the (say) bottom 2 million. The bottom 2 million couldn’t be readily made available before, so this is why it’s a new concept. Here there is one seller (Amazon), and many millions of customers.

But what about the long tail of supply, where there is one customer and there are many millions of sellers? Does such a thing exist? Could it ever? The long tail of demand seems to exist mostly due to taste: you like that weird music, I like this. That isn’t likely to work where there’s only one customer. Any suggestions?

Civilised Airports Put Stuff After Security Control

I travelled just enough last year (although mostly not on business) to start analysing air travel, as some of my colleagues have done for a while.

And so I’m afraid this post is another whinge about airports. Why o why do they ever put interesting stuff (i.e., shops) before security control? OK, sure, some relatives come to see people off, so a coffee shop or two might not go amiss in larger terminals. But apart from that, why bother? Doesn’t every rational person proceed through security control as soon as they’ve checked in - and don’t they check in as soon as they’ve entered the airport?

I’m sure my mind is missing an airport use case.

Virtual Conferences and Video Content

This year has clearly been the year of YouTube, Google Video and other pretenders to the throne. And as I’ve discussed before, I think Flash-based video is really cool.

However, not everything it’s used for involves cats falling off trees as per You’ve Been Framed, or actors fooling people. One of the best uses has been the huge amount of compelling video that’s been released free from conferences this year. I’ve absorbed tens of hours of it this year, on subjects as diverse as life coaching from legend Tony Robbins (Alexander Kjerulf has been to one of his seminars, and I want to go too), the marketing of spaghetti sauce, and curing aging. ‘Catch-all’ conferences such as Gel, TED, and LIFT have all got in on the act. This, of course, is an alternative to physically travelling, and will surely produce more super-star conferences that attract bigger names, bigger audiences, and grow in stature.

I’d love this video-based content to be one more nail in the coffin of the box in the corner. TV still seems to hold an now-unworthy position, primarily because of the culture of FUD around copyright that scares studios away from the network and causes them to avoid doing anything more adventurous than releasing restriction-encumbered shiny discs. I don’t think this can last, though; despite the nonsense that’s spoken about the ‘ethics’ of ‘owning’ content by those think they’ve bought more than a license, as Cory Doctorow rightly points out, DRM is fundamentally a broken business model. Whichever way the details of the market go, I’m sure we’ll eventually be able to chalk up another win for the long tail. I certainly hope so.

Down with Love

Down with Love is the kind of film I would normally pass by without hesitation based on the promo poster. I only fell into it by accident, on late-night TV. I think I need to learn from this experience: it’s excellent.

Down with Love is everything the Austin Powers series would be if it wasn’t so silly. Set in 60s Manhattan, Down with Love is the story of a feminist author who is seduced by a playboy who turns out not to be the guy who she… well, I won’t spoil the plot. Suffice to say it isn’t the main reason for watching. Down with Love manages to be camp throughout, without once breaking down into nonsense. Performances from Ewan McGregor, Renée Zellweger, and David Hyde Pierce are all hilarious, and the ending of the film, whilst a little contrived, lampoons its own plot beautifully. Superb sets, costumes, and everything else required to re-create a 60s that never existed round it off.

Thumbs up.

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