In today’s fiercely competitive supermarket industry, loyalty programs have become a critical success factor. ASDA’s loyalty program, ASDA Rewards, has injected some genuine creativity into the sector with features like cashback on purchases, gamified special offers and charitable initiatives. ASDA Rewards is an excellent case study demonstrating loyalty programs that work.

What is the ASDA Rewards loyalty program?

ASDA, a major British supermarket chain, introduced ASDA Rewards in 2022. The program aimed to incentivise repeat business and to provide customers with a guaranteed way to save on supermarket purchases.

The innovative program has abandoned the traditional points system in favour of a “pounds not points” approach. Customers earn ASDA Pounds on their purchases which they can redeem on future transactions. ASDA’s objective here was to differentiate from the standard supermarket points program approach favoured by most competitors by instead offering transparency on what value has been earned. This is a core feature of an account credit loyalty program design.

What are the key drivers of success?

ASDA Rewards is simple to join and engage with

Customer can join by downloading the ASDA Rewards app and completing a simple registration process. Existing members can log in with their ASDA Groceries account which will link both accounts, track orders and update rewards. Members simply need to scan their member barcode in the app when purchasing for rewards to be applied, creating a seamless experience.

ASDA Rewards saw remarkable initial growth with over 1 million customers signing up in the first year^[1]. By 2023, the program had expanded to approximately 6 million active users and become a key revenue driver for the business^[2].

Members are given multiple opportunities to earn

ASDA Rewards core value proposition centres around members earning cashback for purchasing certain products in-store or online. The program highlights specific products as ‘Star’ products where members can earn up to 10% back if they purchase. Members can earn even more cashback when purchasing from ASDA’s ‘Super Star’ range of products.

All pounds earned are held in the member’s ‘cashpot’ in their account until they are ready to redeem.

In addition to earning ASDA Pounds on Star products, members are given the opportunity to earn bonus Pounds to increase their cashpot, including:

• Complete missions: Members are set spending, which involves spending a number of times in a set period, buy a specific quantity of product, or spending a certain amount on qualifying products

• Complete milestones: Members are set overall spend targets (for example ‘spend £100 this month’)

ASDA Rewards provides a strong value proposition to customers

ASDA Rewards success lies in its ability to provide true value to members in the form of savings on groceries. As members accumulate ASDA Pounds in their cashpot, they can convert them to a voucher to redeem on their next purchase.

Members do this by navigating to their cashpot in their member account and clicking the “spend” button. A slider is then displayed allowing members to choose how much of their cashpot they want to convert into vouchers. Vouchers can be created in £1 pound increments up to £10, or £5 up to £100.

Once converted, the voucher is available in the member’s account to redeem by scanning the voucher at checkout in-store, or it will be automatically applied to the member’s next online purchase.

Since the introduction of ASDA Rewards, members have saved an impressive £400 million in cashpots. The success of the program has also led to ASDA being able to reduce the price of 800 products in 2023^[2].

How ASDA Rewards increased personalisation to enhance the customer experience

ASDA Rewards has implemented several personalisation strategies to enhance customer engagement and drive loyalty. These strategies leverage customer data to create tailored experiences across various touchpoints.

Year in Review Emails

ASDA CRM team developed personalised “year in review” style emails to showcase the value of the loyalty program to individual customers. These emails included key data points such as registration date, number of Star products purchased, current cashpot balance, and missions completed ^[4].

This personalised approach resulted in a significant 43% increase in direct click-throughs compared to non-personalised campaigns^[4].

Sending these type of communications influences members to reflect on their year with the brand, and reminds them of the value they have unlocked in exchange for their loyalty. Additionally, focusing on the member’s achievements or milestones works to strengthen the emotional connection to the brand by recognising their accomplishment.  

Loyalty Headers

ASDA introduced personalised loyalty headers in their emails, replacing delivery-focused headers. The headers are tailored based on the customer’s loyalty status and cashpot balance where a member with a lower cashpot balance is served with messaging to encourage earn versus a member with a larger balance who is encouraged to redeem. See below for examples.

This simple yet effective personalisation strategy led to an impressive 138% uplift in click-through rates^[4].

Personalised offers

ASDA Rewards offers personalised missions and milestone offers that are tailored to the member’s preferences and past purchases. Certain products are also offered as Star products based on past purchases. Doing so enhances the member’s experience with ASDA Rewards by making the program more relevant, showing the member that the brand knows them and understands what is valuable to them.

How ASDA Rewards utilises digital games to increase engagement

ASDA Rewards utilises digital games strategic times to incentivise their members to engage more with the program and make additional purchases.

Examples include:

• Birthday celebration: To celebrate ASDA Rewards’ first birthday, ASDA Rewards gave away £15 million pounds via a ‘Spin the Wheel’ game. To participate, members had to spend £5 pounds or more in-store or online for the game to appear. Depending on where the wheel landed, 50p, £1, £5 or £100 was added to the member’s cashpot
• Category specific: To drive purchases of specific products, ASDA Rewards introduced a ‘Tap to Win’ game that appeared when a member purchased ASDA’s George general merchandise and homeware range. Prizes range from 50p, £10, and £100 in cashpot bonuses or Home and General Merchandise coupons
• Holiday offer: ASDA Rewards offered members the chance to increase their cashpot to celebrate key holidays. For example, a spin to win wheel was offered to celebrate Halloween, where members could win extra pounds

ASDA Rewards also use gamification approaches to stimulate engagement with the program:

• Progress trackers: In their account, members are able to easily track their progress towards achieving milestones, such as cashpot balance targets. This utilises the Goal Gradient Effect whereby members who can see they are close to achieving their goal, are inspired to get to the goal faster.

ASDA Rewards was recognised for their games and gamification strategy as a finalist at the prestigious International Loyalty Awards in the category of ‘Best Use of Gamification to Enhance Loyalty’.

Commercial success of ASDA rewards

The ASDA Rewards program has significantly influenced customer engagement and sales. It is the combination of developing a strong loyalty model, delivering a personalised experience and utilising effective engagement strategies that ASDA Rewards has delivered positive commercial benefits for the brand.

Total sales, excluding fuel increased by 7.1 per cent last year to £21.9 billion. The supermarket giant has linked approximately half of its total sales to ASDA Rewards members, seeing growth in participation to 52% of transactions in just two years^[8]. ASDA’s CFO credited the program as a “vital tool for customers to manage household budgets” and is a “key revenue driver for the business” ^[5].

ASDA’s commitment to giving back

ASDA has recently launched an initiative called Cashpot for Schools where they have committed to donating 0.5% of each customer’s shopping total to a primary school of their choice. In just four days, ASDA Rewards raised £1.14 million for UK primary schools.

Within two weeks this number climbed to £2 million.The success of this new initiative not only proves the vast number of customers spending with ASDA, but also showcases the power ASDA Rewards wields in mobilising members for a good cause.

Conclusion

ASDA Rewards has proven to be a game-changer in the UK supermarket sector, showcasing the power of data-driven customer engagement strategies. The program’s success lies in its personalised approach, where leveraging customer data has allowed ASDA to create a tailored experience. Additionally the use of games and gamification has stimulated regular engagement among members by constantly offering ways to earn pounds to help members save.

ASDA Rewards offers valuable insights for loyalty consultants as well as brands looking to develop or enhance their loyalty program strategy. The program highlights the importance of personalisation, data utilisation and continuous innovation. As the supermarket landscape continues to evolve, programs like ASDA Rewards serve as a blueprint for businesses aiming to build lasting relationships with their customers and drive long-term success.

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References

[1] – https://corporate.ASDA.com/newsroom/2024/08/08/ASDA-updates-on-q2-2024-trading

[2] – https://www.marketingweek.com/ASDA-price-focus-loyalty/

[3] – https://groceries.ASDA.com/event/ASDA-rewards

[4] – https://econsultancy.com/ASDA-loyalty-email-personalisation/

[5] – https://www.gbnews.com/money/ASDA-rewards-scheme-profit-results

[6] – https://movableink.com/case-studies/ASDA-case-study

[7] – https://www.marketing-beat.co.uk/2024/05/17/ASDA-rewards-loyalty/

[8] – (https://corporate.ASDA.com/newsroom/2024/08/08/ASDA-updates-on-q2-2024-trading)