CASE: Coop Prime

CHALLENGE
Customer loyalty amongst the Danish supermarkets is rapidly decreasing – both concerning visit frequency and basket size. And with foreign and domestic competitors having a focus on price as well as an increased quality and a growing product range, the competition has intensified significantly in recent years. Therefore, it was necessary to turn things around and redefine the value proposition offered on the daily supermarket trip. Based on this, it was important to find a solution that would recapture more trips to the supermarket, heighten loyalty amongst existing customers and increase the basket size. In the meantime, the activation of the new value proposition ought to ensure high RROI levels and that loyalty and business do follow each other. Currently, Coop offers an app where customers receive personalized offerings that gives a discount on the most frequent bought items and provides customers with a “Scan & Betal”- solution in the supermarkets, which enables one to get through the store quickly and easily. However, there was a need for an additional layer that could tie Coop members closer to the business and the community. And with the intense competition amongst the supermarkets, it was necessary to introduce a game-changer that could challenge the existing retail and benefit mindset.

SOLUTION
The solution was PrimeKonto (re. Prime Account) – an extension of Coop’s current loyalty program, and a new payment solution in the existing Coop app that can be used in the store and on Coop.dk MAD (re. FOOD). The loyalty program provides families with yearly cash saving up to DKK 6.300. You simply pay a minimum of DKK 1.000 each month to the Prime Account in the Coop app whereafter you will receive an extra bonus of 15% on some of Coop’s best signature products. Each time an additional DKK 1.000 is put into the account, you get access to more benefits like TV2 Play and Mofibo. Furthermore, PrimeKonto consists of five “benefit steps” that all give access to more benefits depending on how large the food budget is transferred monthly to the account. However, there was a challenging communicative task ahead of us, as PrimeKonto can seem complex with its staircase benefits. With the “bonus family” as the creative hook, the communication was made simple and opened up for several familiar situations, which gave PrimeKonto an entertaining and colorful twist that stood out in the market and positioned Coop at eye level with the primary target group: the family with children.

RESULTS
The expectations for sales and loyalty were high, as a significant revenue increase was needed to reach break-even. With that in mind, we achieved an increase that was 31% higher than the objective. The initial results show that it is really good business and is worth the whole investment!

  • Revenue has increased amongst the 30% new PrimeKonto users
  • In 8 months, Coop has recruited 53.711 members, which is 3.000 more than the objective – this results in a RROI on the investment case of 59
  • The understanding of the message is 54 against the benchmark of 38 (Kantar analysis)
  • Response is on 79 against the benchmark of 33 (Kantar analysis)
  • 85% of the users are satisfied/very satisfied, which results in an NPS score of +35 in general and tops in the segment “family with children” with +39
  • If we look at Coop.dk MAD (re. FOOD), PrimeKonto customers are growing at a double rate in comparison to non-PrimeKonto customers
  • PrimeKonto customers buy 30% more of Thise and Änglamark (selected brands) compared to non PrimeKonto customers

With a total of 56.026 subscriptions on the 28th of May 2021, the objective of reaching 50.000 active users has been achieved and the best part is that both the loyalty and visit frequency is growing the longer you are a PrimeKonto user. Oh, and then it also benefits the cashflow of more than 100 million on the first in every month, which also has a commercial value. This makes it a win-win situation!

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