A social media backlash over its new loyalty scheme has prompted supermarket giant Woolworth to reverse its decision to end its Qantas Frequent Flyer partnership with the companies announcing a new three-year agreement this morning.
Under the new scheme, consumers will be able to redeem $10 in Woolworths Rewards for 870 Qantas Frequent Flyer points rather than taking it off their grocery bill.
In October when Woolworth’s announced it was ending a six year agreement with Qantas and starting its own scheme, MD Brad Banducci said this is what customers wanted.
“We are in a world of immediate satisfaction, people want simplicity, and they want it now, and so this is what the scheme does,” Mr Banducci told The Australian.
“It is really, authentically trying to act on what customers want. It’s very simple. When (customers) have achieved something they want it immediately without any caveats or catches associated with it.”
But he could not have been more wrong.
Consumers derided the replacement ‘Woolworths Dollars’ they earned as virtually worthless.
The catalyst was Scott Mate’s detailed Facebook post which revealed he earned only $4.80 in rewards on more than $1000 supermarket spend.
Previously Mr Mate said he was getting around 10% back in loyalty benefits.
A major reason for the low returns was that Woolworths Dollars could only be earned on selected items, not everything in the store.
Compounding this was no Frequent Flyer points earn,
The post went viral with almost 60,000 likes and 5000 shares. It became very clear that people tracked their rewards extremely closely.
And they also liked their Frequent Flyer points – a lot.
And so Woolworths back-flipped and struck a new agreement with Qantas.
A full launch of the new Qantas Points option is expected in the first half of 2016.
“Between 1 January 2016 and the launch of the new option, customers who previously earned Qantas Points via Woolworths Rewards will receive regular bonus Qantas Points offers,” Qantas said in a statement.
“Those with a Qantas Frequent Flyer-linked credit card will continue to earn points each time they shop at Woolworths.”
Qantas said in the first six years of the relationship, “around 9.4 million flights were redeemed using points earned at Woolworths.
“About 80 per cent of points redeemed by Woolworths shoppers were on flights and the remainder were for items in the Qantas store (where the most popular items are gift cards, household appliances and personal electronic devices).”