Zellers' Club Z loyalty program and retail competitiveness

Zellers case study lease I a clear answers Questions part; based ONLY case study (Article) attached (1 source): 1. What author(s)' message? a) Major theme ( tow statement) b) Purpose message. c) Author(s)' viewpoint.

What is the author(s)' message? A Major theme

Retaining customer loyalty in a competitive marketplace is one of the most difficult objectives to achieve for a retailer. Zellers, a Canadian merchandiser, was able to gain additional market share in the 1990s by instituting a program known as Club Z. The then-innovative loyalty program accorded shoppers 'points' based upon how much money they spent at Zellers. There was a strong incentive for shoppers to become part of the program, given that it was free to join. This program was widely credited with 'turning Zellers around' as a company.

b. Purpose of the message

The success of this loyalty program exemplifies the benefits of merging marketing with IT. Zellers pioneered the use of loyalty programs that did not require complicated coupon-clipping. This was only possible through the use of electronic data storage. Club Z. made things easier for both customers and retailers at the store, saving time and hassle. Additionally, consumers could receive extra points if they purchased certain items. The only problem with the program from the retailer's point-of-view is that Club Z. did not track information about consumer buying habits, enabling stores to have more information about what demographics preferred certain items.

Q3. How well is the argument presented? a. Logical consistency

The argument is presented in a logically consistent manner. The author describes the rationale behind the launch of Club Z. And the methods that were used to introduce the program along with the specific metrics that demonstrated its success. This is followed by a few caveats about how the program must be improved, regarding the tracking of consumer data.

b. Limitations and/or assumptions

Loyalty programs have become so ubiquitous it is difficult to feel the excitement that the author has about the Zeller's program. Additionally, the value of such loyalty points for the consumer is not stated: how much are such points truly worth? Finally, there is no survey of consumers, or expression from consumers about how the program has been important in making them choose Zellers over equivalent merchandisers. The program is simply called a success.

c. Completeness

Zellers competitors and their loyalty programs are not analyzed: this would better substantiate the claim that Zellers was truly unique and innovative in its promotional design, and the loyalty program was what brought its popularity back from a relatively stagnant mid-market position.

Q4. What is the significance of this article for marketing management/strategy? a. Managerial usefulness of ideas presented

At present, loyalty programs are very common at most retail establishments. To truly distinguish a loyalty program would require additional 'innovation,' regarding promotions, to bring people to the store specifically to participate in the promotion. However, the merging of IT and marketing in a useful fashion, as exemplified by Club Z, is instructive.

b. Contribution to your understanding of the topic/issue

This article does demonstrate the usefulness of cross-communication in organizations. Only by merging the talents of IT and marketing could Club Z. have become successful.