Audio Transcript

#183: Denmark's Salling Group Customer Program's Highly Successful Launch (51m)

Paula Thomas

00:00:00

Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas. And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world. Cheetah Digital’s relationship marketing platform, bridges the gaps in your customer data, moving people from unknown consumers to loyal brand ambassadors with customer acquisition, multi-channel messaging and customized emotional loyalty programs. Cheetah Digital is a one-stop-shop for enterprise brands looking to simplify and scale their relationship marketing strategy. Learn how brands such as American Airlines and Discovery Incorporated use Cheetah Digital to drive increased revenue with video case studies available on cheetahdigital.com.

Hello, and welcome to episode 183 of Let’s Talk Loyalty where we’re chatting about the wonderful design and development of a customer program in Denmark by a retail conglomerate called The Salling Group with retail businesses across grocery coffee shops, restaurants, and discount stores.

Paula Thomas

00:01:33

The Salling Group employs over 60,000 people and over 35% of the population of Denmark shops in one or more of their stores, today’s conversation is with Andras Szocs, the Head of Customer Programs and Center of Excellence who joins me to share their strategic objectives and the most powerful tools that are delighting customers off The Salling Group. So, first and foremost, welcome to Let’s Talk Loyalty.

Andras Szocs

00:02:06

Thank you very much. It’s a pleasure to be here.

Paula Thomas

00:02:09

Great stuff. You’re joining us from Denmark. I believe. Am I right?

Andras Szocs

00:02:12

Yes. I’m in the beautiful city of our host <indiscernible> or headquarter is the second biggest city of Denmark and that’s where Salling group coming from.

Paula Thomas

00:02:20

Wonderful. And we will definitely start with our usual opening question, but I think immediately after that most important thing is to explain how impressive and actually it’s just an incredible retail story, The Salling Group. So you might give us an introduction because we have a lot of people, for example, listening in the us and the UK and even in Australia, for example. So we’re not as familiar maybe with your brand, but doing all of my research for today on Drasha it’s an incredible story. So before we get into Salling Group, tell me, what is your favorite loyalty program?

Andras Szocs

00:02:54

Yes, I was thinking a lot about, and actually I was picking one based on my personal interest and personal favorite and it’s like, why I really love Nike is I think they are brilliantly composing and mixing the, the business and the professionalism and the fun and the sport. So it’s really, really close to the overall Nike brand experience, which why I like my life, obviously I’m using multiple applications of them. So I’m a using their, their app store, their web application, ordering like stuff. I’m a runner. So I’m losing the Nike running club and I was just started to use their Nike training app. And I really liked the way how they combine the three combined my accounts and sharing with me, not just news, but they encouraged me to run more sport, more being my personal trainer.

Andras Szocs

00:03:45

And obviously since I’m using all the sports app, I just realized that nearly all my sporting gear is coming from Nike. So it’s a, it’s a really, really cool way how they brought me into the, to their universe. Why are the sport? I don’t feel I’m, don’t feel that I’m just, I just boat by different promotion and different messages, but I don’t actually belong to a community. And this is I think, an ultimate success for club loyalty program or customer program that I will be, we call it. Yeah. I have a personal favorite experience, which had happened with me a few days ago or a few weeks ago in Paris, which I was not even aware of. We were walking on River Seine and when we got close to a Nike store, my Apple Watch started to beep that, “Hey, it seems that you are close to the Nike store” and then let us turn the Nike app into an in-store mode.

Andras Szocs

00:04:38

And this in-store mode was completely hidden before for me. And I just started to explore what the in-store mode can do in a Nike official factory store, which for example, helped me to bring another size to the fitting room. Also offered me that if I don’t want to carry the bag, they are happy to send it to home to me. So it was really a really a factor and working in the loyalty industry, there are area, there are very few occasions when I have a aha moment in regards to, or related with an app. That was a point which I rarely feel wow. So that’s why I selected them. So congratulations to them. If anyone listening from there.

Paula Thomas

00:05:19

Do you know what they have just gone to the top of my wish list as a guest on the show. So, which is exactly the purpose of the question and anyone listening, I guess if you’re, you know, not even in retail, but I guess, especially if you work in retail loyalty to understand the community piece, which you mentioned, what I do think is absolutely critical, but also the integration of the content moving away from anything that feels too transactional, adding value. And this whole idea. I think what I’m hearing from you, if I’m right, is they’re showing loyalty to you as a customer, creating as much value as possible. And then as you said, you somehow up commercially buying all your stuff from them, which was something you weren’t even conscious of by the sounds of it.

Andras Szocs

00:06:04

Absolutely. And, and all services, which, which comes with there with the membership. So another example that they are of course, free of charge to, to send me a new running shoe. But even if I use my running shoe, I’m allowed to send it back if I don’t like, yeah, so this, this kind of service just creates a level of trust and a level of respect to their products, which is amazing. And of course, I don’t know what can be the cost of getting back a use running shoe because obviously they cannot do anything with it, but still it’s building such a great product level loyalty to their shoes, which is incredible. And, and really that in direct pay, they loop me into their products.

Paula Thomas

00:06:47

Brilliant story. So thank you so much undress for that. And so back to Salling group, you’ve told us you’re in Denmark. I know that’s where the headquarters is for The Salling Group, but you do operate in both Germany and I’m just entering Poland’s. We definitely have a story to, to hear from you about that and how that’s evolving, but give us a sense of The Salling Group and the kind of businesses you’re involved in Andras

Andras Szocs

00:07:13

Yes. So Salling group is basically at the biggest and one of the oldest retailer chains in the market, it was a family-owned business. Now it’s owned by a found, which was developed by our great owner, Mr. Salling. And we are a very threaded river, a very traditional retailer with numerous brands and numerous formats across the market. So the whole story started with a department store, which called Salling, and then very, very quickly it’s evolved to a much bigger retail business. Nowadays we have a numerous different format. We have supermarkets, we have hypermarkets, we have discounters, we still have the department store. And we also are in the restaurant industry by owning the license of cars, Juni, or, and Starbucks.

Andras Szocs

00:07:54

So we are also owning these licenses in that mark. And I cannot any more say recently, because it’s still a couple of years ago when we came to the online landscape. So major three or four brands are becoming very omni-channel. Bill is the biggest one on that one. So I have back shops, I’m mostly focusing on a nonfood home delivery and food kick can click and collect and a little bit more than a year ago. We went to, we went to a home delivery food on a taxi tax in Copenhagen.

Paula Thomas

00:08:25

Oh my goodness. Wow. So yeah, an incredible group and very broad selection, I suppose, of industries. And so operationally complex, I suppose, even from a retail perspective. And then you made a huge decision about building a comprehensive customer program loyalty program. I’m sure the terminology varies. And I know you launched it in, in 2020. I was looking at your interview with signals 21. And we were just talking about what a superb job the guys did, Richard specifically in she’s a digital tool to showcase The Salling Group. But my first question, I guess, I’m dressed for you is really where, or when, I guess even when did the idea come for a customer program, because launching in 2020, in a, in a pandemic could be interpreted as it was triggered by I suppose, the change in consumer behavior, but also it could be something that was a long-term milestone or intention for The Salling Group.

Paula Thomas

00:09:26

So, so I’d love to get an insight in terms of your strategic content and where, and when that came.

Andras Szocs

00:09:33

Yeah. So the idea actually born much before COVID came to the picture. So it was just a, just a coincidence that we were launching in the middle of the, of the pandemic. So the ID started to get clarified around 2000, beginning of 2019. And it was basically triggered by a major promotional transformation, which, which I was leading in Salling group. So that was the reason I came to the market. Originally, I worked on commercial for two years and led the promotional transformation project. And during that project, it, it came up a lot that, okay, what is the next big step on the promotional journey? That mark is still a very printed leaflet dependent country in terms of normal classic line and price promotion.

Andras Szocs

00:10:17

And obviously we always try to find a way how to do less, but more, more relevant, more personalized, stronger promotional set, and stepping away from the printed leaflet, channeling, all the promotional communication, more to the digital landscape, more to the customer’s pocket. And as a result of that kind of strategic thinking, it’s pretty obvious that we need to do a customer program. And there is a very good reason why I don’t call it loyalty program because from the very beginning, we decided that we are going to step away from this classic point collection where we are creating a kind of special currency or token to the customers and letting them to collect half to 2% because we realized that that’s very quickly became a hygiene factor.

Andras Szocs

00:11:03

And of course it’s a, it’s a pretty significant cost on our P and L. We don’t believe that the long-term, it can drive really the customer value. So on the whole journey, we decided obviously that we are willing to invest two customers back, but we will do it via offers via via campaigns, via periodic, via different tools and not just a simple and cost system for the collection, a collection rate. So the whole story was triggered as a part of a promote transformation. However, we felt that just creating functional loyalty is by far not enough. So from the very beginning of the project, we were searching for different functions and different, different digital, eh, points, which can make also the shopping trip, more convenient, more easy, more lovable.

Andras Szocs

00:11:54

So transforming, transforming a lot of great ideas from classic brick and mortar to omni-channel. And that’s how we compose the apps. And that’s how we ended up in having a program, which is completely ad-based turning or classic loyalty apps into a, into a membership space and bringing it more and more function from the core offline landscape to the, to the online world. So that’s how we ended up in the program. And I’m sure we gonna touch a couple of the functions later, but that was the strategic thinking behind it.

Paula Thomas

00:12:28

Yeah. And there, there, there’s a lot of points I’d love to pick up on the first one you mentioned, you know, literally this decision and clarity of thinking about not wanting to have a points or currency-based program, which in many companies is, is seen as yes. Perhaps not innovative, but it is something that’s understood by customers. So, you know, there’s both the positive and the negative of having a points-based loyalty program. Now I’m very much in your line of thinking in that, you know, I’ve worked on partnership type loyalty. I’ve worked in lots of different models, so I’ve seen the opposite of points, but I can also see the opportunity with points.

Paula Thomas

00:13:11

So how clear were you, like, was this something that you just said we just don’t want to do it, or how did that decision get made at the beginning? I’m fascinated.

Andras Szocs

00:13:22

Yes. I think a classic food retail is, is the answer here. So obviously there are numerous industries, but I completely believe that a reasonable amount of points and a reasonable share of, of payback to the customers would make sense. Most probably all our listeners know that food retail is not the industry where there is a heavy two-digit profit at the end of the, of the game. So it is a very, very difficult, there are difficult decision to give back from the profit, a significant amount of customer’s pocket, but the non-significant payback is not really something which the customers are fascinated about.

Andras Szocs

00:14:04

So, you know, spending in a numb or some amount of money and in a quarter, basically earning points, which is eligible to buy a can of beer or a Coke, that’s the kind of experience. So that was, that was the major thinking that for us as a business, it’s a significant investment, but we’re not sure that for the significant investment actually customers are happy enough. So we were more thinking in a way that let’s give back the same amount of money by creating personalized offers, creating great experience, creating games, creating a special function and that set of functions and, and, and the financial benefits must be equitable.

Andras Szocs

00:14:49

And for even more, which we can give back and think like this as a trade plan. So think, think in the customer program benefits as, as, as another, any other channel, like a promotional leaflet or in-store activities. So campaigns that’s, that was the core discussion and decision we made wonder.

Paula Thomas

00:15:10

And you made that very early. I know, and I think that clarity of thinking probably helped a huge amount when it came to building the actual programs. And the next part I wanted to ask you about was exactly the plural, the word programs. So even though Salling group obviously operates in all of these different retail verticals, you did decide to keep different programs and aligned with the existing retail brands, rather than trying to create, for example, a loyalty branch, which in this market where I live, and rush is exactly wash at tends to be the decision. And I tend to think again, actually, that you’re absolutely right. The, the retail brand is where there’s already the trust.

Paula Thomas

00:15:52

There’s already the shopping behavior. So to me, I like this idea, but again, just wondering if you debated, you know, the idea of creating a loyalty brand for all Salling group stores, or it was always just obvious to keep it within the individual brands.

Andras Szocs

00:16:08

It’s a, it’s really special that you are asking this question. Of course, this was the biggest question during the process. So as you said, we were super clear on the points from the very beginning. This debate was up on the, up on the, on the white board, maybe till the very last moment of the, of the, of the project, because there are obviously benefits and concerns to board’s direction, but you, you got it very right. So our customer facing brands are bill coffered tax and that the one Salling. So that’s what people know, that’s what they can relate to. That’s how we are communicating all the shopping benefits, which you can get every brand is famous about something in their mark and a Salling group previously known as Don supermarket is basically a corporate brand.

Andras Szocs

00:16:58

So it’s very famous on LinkedIn, but much less famous across the customers. And basically the, the thinking was that we would like something which is, which is possible to collect and, and collect the data and use the data on a group level. But the customer facing application is something we, we, we make on behalf of the, of the, of the formats and it will be to the brand, and that was actually enterprise orchestration or, or architecture. That was one of the biggest and most difficult things to do. So that’s bad. I can already say a very big credit to cheetah because they really supported us and think with us on this journey, which was by far not obvious for any of the, of the vendors to create an, an architecture where we can see the data we can play with the data can share the data in a personalization and targeting or any other points in the, in the, in the program, across the brands.

Andras Szocs

00:17:59

But very clearly we can define the offers and the, and the services and the, and the, and the members. Yeah. And keep it clear for the brands. So that’s how we ended. And that was the reason, basically, because people were mostly engaged with the, with the formats, not with the, with Salling group. And honestly speaking, looking to the data nowadays, I think it was a good decision because we can see of course, a significant amount of people. Who’s our member of all the tree, but this is far away not as big, which we would, which would say that The Salling Group program would make sense. And yes, some people should have three apps on their phones, but I’m still in that mark.

Andras Szocs

00:18:42

A lot of people are unaware using multiple, multiple brands. And honestly speaking, not that even in that mark, everybody ever had that with brands, VR owning. So some customers don’t even know the bill cannot two belongs to the same group and they shouldn’t honestly it doesn’t.

Paula Thomas

00:19:00

Yeah. Yeah. And I guess, you know, I’m sure one of the perhaps biggest questions around making that decision is, is really on the legal and data permissions aspect. Because Europe, as I think everybody listening is very aware is, is absolutely focused on protecting consumers, privacy. So I’m guessing you had to work through very clearly what it sounds like, and please correct me if I’m wrong. It sounds like you’re collecting data and, you know, advising your members that this data is being collected by The Salling Group. So you have access to it. And as you said, at an enterprise level and you use it for their benefits.

Paula Thomas

00:19:42

So that’s wonderful, but yeah, I’m, I’m pretty sure that was a complex piece as well, just to make sure that the legal people in the business were comfortable, that this was something that consumers understood.

Andras Szocs

00:19:55

Absolutely. And, and not just the legal part, of course the legal part is a must, but also as you said, the ethical part and the understanding the understandability part was absolutely key what we, what we were doing and not just of course, legally, but also in between the different formats to align and to make sure that we are communicating very clearly from the very beginning that here you are signing up to a Salling group account independently. If you are coming through FedEx or coming through bill or we’re coming through Neto, obviously it’s a huge benefit. Because for example, once you are registered to FedEx program and you deciding to come to Neto, or even you decide to come to one of four websites with the same credentials you can log in.

Andras Szocs

00:20:38

Obviously, they need to give a marketing consent to the brand to be able to send emails or any kind of marketing communication on behalf of the brand. But this is a very simple customer journey from, from, from once you registered, because you can just come in in the same credential. So there is a lot of benefits for the customers and a lot of simplicity for the customers once they, they came into The Salling Group world. And that’s what we are very vocal about the registration process that here you are creating a Salling group account, which you can use all across Salling group.

Paula Thomas

00:21:13

Yeah. Wonderful. And simplicity is one of my favorite words on Josh. So thank you for, for that. I’ve mentioned actually a few times this week. I don’t know why it comes up, but my favorite book title in any business book I’ve ever seen was one that was called don’t make me think it’s exactly for exactly that reason. And I think actually to credit Scandinavia, I think exactly where you live and there is a very clear way of operating, which is very straightforward. So I think certainly in other parts of the world, we’re not really thinking as clearly, perhaps as that seems to happen culturally there. So it’s a, it’s a wonderful experience. And I like the fact that you’re focusing on it from an ethical perspective, as well as a legal perspective, because you can always do it legally and then, you know, confuse people at a different time or, or disappoint them perhaps if they weren’t aware.

Paula Thomas

00:22:03

So you’re right. Actually it’s the ethical consideration has to come first and then the legal people come in behind.

Andras Szocs

00:22:10

Yes. And that’s what, that was always our mantra. And I fully agree with you with the simplicity. We debated a lot about, you know, log in screens, number of questions we would like to ask at the beginning to get you in and what kind of verification, what level of different questions back and, and, and resign I resigned in is needed, but we decided to make it in the simplest possible way at the beginning, lets people in. And of course, then we can do unlimited progressive profiling if we really need some data. So that was the, that was the mantra. So, so basically, we will have more of a saying that we use a kind of a grandma test. So if my grandmother was able to sign in that, it’s simple enough.

Paula Thomas

00:22:55

Brilliant. Yeah, absolutely. In one tech company I worked in, we had somebody called Johnny who was an investor and we used to call it the Johnny test. So exactly that he was like, he hated complexities. So we’d ask him to go through all our journeys for us. And it’s important to have that, you know, or a grandma, somebody you can actually yeah. Delight with a simple customer journey. So I lovely, lovely approach there. And yeah, just to emphasize the word that you used. I think progressive profiling probably wasn’t a concept when I was building loyalty programs that had any awareness. I think we all knew there was a direct trade-off between how much information you collected at the beginning versus how many people would have to patients to complete it.

Paula Thomas

00:23:39

And I’ve always been of the view that yes, less is more let’s get the permission let’s get started and over time then when you have the trust, you can absolutely build it up. So definitely a good lesson that you’ve implemented there as well in terms of your strategy. And I’m guessing that’s working, you know, in terms of what you’re saying. So would you give us a sense of, you know, what kind of numbers you have so far and, you know, things you’re proud of in terms of how many members have signed up to your various programs?

Andras Szocs

00:24:11

Of course. So we just hit the 1.2 million members with the registered credit card, which is in context that is a five and a half million country. It’s I think a very, very nice number to celebrate. And also for a reason, I mentioned this registered credit card because we have a single touch identification program, which is honestly, I believe still pretty unique. Obviously, Denmark is a country where, where a payment card share on transactions is extremely high. So we are in a privilege to, to be at the program like this, which means that basically once you are registering your payment card behind our app, every single time you are, you are paying with this payment card, you are automatically identified.

Andras Szocs

00:24:53

So there is no need for another scanning or another token or another code or phone number or whatever, which is obviously super beneficial for the customers because it’s simple. You don’t need to carry another card and even don’t need to fight for another card in your wallet and also super beneficial for us because we have every single time its action captured. So I know from my colleagues and from my great friends, from the industry, that they are really struggling, that once it’s a small transaction or I just popped up to buy whatever in our kiosk, et cetera, usually people don’t take the time to take out the card and scan the barcode. But here we have every single transaction captured, which obviously we can use for the greatest personalization.

Andras Szocs

00:25:35

Obviously, we can use for delivering and developing the program to the right way because we do fully understand our customers. So that’s why this 1.2 million number is even better. Obviously we have a little bit more members who decided to not to share the credit card because of course they still can do having access to a limited portfolio of the benefits, but still it’s a, we are absolutely happy with the share who is giving us the, or the full, full membership, including the card and because see, the customers love this. So obviously there is always a layer who have American weed, things like that, but that’s unfortunate life, but major it of the customers do love the fact that it’s simple.

Andras Szocs

00:26:21

Again, it’s just a one-time hassle. And then just the enjoying the benefits and back to this progressive profiling, of course, I think it’s very important that we just let them in. Then we started to bomb them and bombard them with all the benefits. And then after they enjoyed a lot of benefits, obviously they were very happy to share something more with us because they saw that it’s a kind of a nice give and take and not that okay. They want to know everything from the very first moment and who has what I will get back.

Paula Thomas

00:26:50

Yeah, yeah. You’re totally right. Yeah, no, it works beautifully. And again, I suppose it’s the same point. We, we talked a bit about your earlier it’s demonstrating loyalty to your customers and how wonderful it is to be part of The Salling Group family, and yeah, over time, then they’re more comfortable and they can share, and then you get the word-of-mouth benefit as well. I think Andros because at the end of the day, you know, none of us can afford to go on continual membership drives and, you know, advertising our programs. What we really want and hope and need is for our members to tell their family and tell their friends. So guessing you’re getting a huge amount, particularly with your payment linked loyalty piece.

Paula Thomas

00:27:30

And I had one question on that actually just operationally and because I’ve heard it executed in, in certainly one way, and I’m not sure if it’s available to everyone or if you have this level of, of simplicity, let’s say, is it possible? For example, I come into a store, a Salling store and I don’t even open the app. So if I’ve got my cards in the, the app already, as you’ve said, card on file, I can keep the phone, you know, at home or anywhere else. And just by having the, the, the payment cards swiped as a form of payment, you don’t need the app to open, am I right? I could see her nodding.

Andras Szocs

00:28:09

Yes, yes you are. Right. Obviously, there are some benefits which you need to activate in the app. So we are, we are playing with this to make sure of course that, that, that, that the customers are engaged in two ways. So, or, or key metrics around how we are evaluating our customers have measured them to access. One is how engaged they are with the store. And of course for that one is absolutely enough that they are coming to the store and pay with the payment card, which they registered. But the other one that how engaged they are with the app. And that’s why we keep some, some benefits, some affairs activated in the app. So yes, you don’t need to open the app in the store to not to disturb your shopping trip.

Andras Szocs

00:28:54

But for example, maybe before the shopping trip, when you are planning your shopping journey on your shopping list, for example, which we have in the app, you need to activate your offer, which you would lie to be able to use on the next trip. And that’s keeping a nice balance between authors for everybody, which don’t need to be activated. We call the membership of first and keep a couple of affairs in a, in a coral salvage. We call personalized benefits, which are carefully selected to your segment. And the segment obviously can be one individual more or people who owns a pet in the mark. So we are trying to balance between these two, obviously, you know, the journey is a, is a, is a continuously improving journey.

Andras Szocs

00:29:36

We trying to move more and more into the personalized direction because the membership offers more for recruitment therapists, but we are still kept them live, of course, and, and, and, and make them available for everybody. But our goal is that, of course you are both engaged with the app and with the store, that’s the ultimate golden customers in our mind,

Paula Thomas

00:29:59

Golden customers. I love us. Yeah. And you’re right. I probably haven’t heard that distinction may be four undressed in terms of yes. The, the swipe rates are, you know, I think particularly in the grocery sector and probably the default, or at least my assumption of the default in terms of KPIs, but I’ve also heard great things about the importance of the app, open rates and, you know, a heritage compared for example, to, you know, the cost of, you know, just engaging, let’s say in a different platform, be a digital or TV or other marketing channels. When you look at how expensive it is for your brands to be exposed to a consumer, it’s actually incredibly cost effective to have that direct digital channel, you know, when they do have your app.

Paula Thomas

00:30:43

And as you said, they open and engage. So whether it’s for a coupon or it’s for a game, like you’re actually getting very cost-effective marketing as a result.

Andras Szocs

00:30:54

Absolutely. And this was of course, one of the other main KPI or main goal when we initiated the project to, to, to build this. So yes, we absolutely started to see that moving just simply from a printed leaflet to digital and moving it to Facebook or Google want us to speaking can be as much expensive and it will be maybe even more expensive. So that’s of course a cool journey, but it’s not cost efficient or cost efficient at all. The cost efficient way is if you have your customers and if you have your customers with their app in their own pocket, and obviously what is happening nowadays with cookies and, and data privacy and all of the stuff, and you never know when it’s going to come, that you are not able to communicate with your customers in a, in a shared social wall or, or any other channel.

Andras Szocs

00:31:46

If you have your own customer who decided that they want to get your deck or message into their own app, as the safest again, ethical and best engaging way of communicating with them. So, yes, of course, that’s why it’s super critical for us to keep the app engagement also high and always impress the customers with new information with new games will be new, the new services in the app. So the recent one, for example, we did in that always cannot go. And obviously the scan and go function is embedded into the loyalty app. So we had originally a price canner where you can just check the price of the product and we turn it into an option that you can just scan your items with your phone.

Andras Szocs

00:32:30

And there is a pay button at the end, and you can just walk out, so don’t need to queue, oh my goodness, which is a, of course they love it. You know, who wants to queue? And I’m not saying that you need to queue because obviously you don’t need to queue, but there are some very special occasions. Of course, men of course, operation is not able to keep up with the, with the greater footfall. And it’s a, it’s a brilliant service. So, so obviously everybody who use Canon go opens the app and on the front page, they see their offers, they see the leaflet, they see the newest product and everything else, which we would like them to see.

Paula Thomas

00:33:08

Okay. And that sounds like something there might have been some concern about as well, I guess from a dare. I say it a theft perspective because, you know, picking up a product and opening up the phone, you know, I’m guessing nobody’s checking that that’s actually being scanned, you know, and that the payment has been completed. Was that a concern for you at all?

Andras Szocs

00:33:29

Honestly speaking. Yes, of course there are some divisions in the group who are more concerned than others, but to be fair with you, first of all, you have your own payment card and email, and everything has registered behind this. We also doing it’s called in Denmark <indiscernible> identification, which is the official governmental identification. So this is the same identification you need to use when you want to use a governmental website or your bank account, that’s the trust. So you need to validate yourself that you are the one. So basically this makes you fully registered with your, with your own credit or validated credentials.

Andras Szocs

00:34:10

To be honest with you, if somebody wants to steal a red bull, it’s much more simple to just go in and put it to your pocket, then, then steal it by the app where you are fully known. So honestly, speaking, as on every single service like this, we have some cases which we are tracking and, and, and protect, protecting and aware of, but this by far less than you would think. So, absolutely. It’s a, it’s a benefit for the great customers. And there is always someone who wants to find a small gate, which, which we catch. And honestly, we do random checks. So you never know when you’re going to be stopped. So you still need to go through a gate and scan a barcode and randomly based on different AI model models and algorithms, we are, we are checking customers randomly.

Andras Szocs

00:34:58

So there is no, not at all on high level. There is not at all a problem with this. It’s much more a benefit than anything related to problems.

Paula Thomas

00:35:07

Oh, that’s wonderful. Yeah. Yeah. I can hear that. The Goodwill that comes through for The, you know, 99.9% of honest customers, you know, absolutely as an extraordinary, you know, opportunity to build that kind of trust and relationship and even community to use the word you mentioned earlier.

Andras Szocs

00:35:25

Absolutely. And just to build on that, we have another feature which we call digital refund. So we obviously have digital receipts, but if you are unhappy with the product, when you get home, because for example, you cut the avocado into half and unfortunately, it’s sometimes not perfect. You have a chance to identify the product and your digital receipt, take a picture, send some comments to us, why you would like to refund it and then send it in. And we give you back the money in your digital account. So that’s the kind of digital extension of our freshness guarantee. And, and maybe you would obviously ask that there is, is there too many frauds and I can say not. And actually customers where, when we develop the feature and we were, of course had some interviews and then focus groups, they were actually really wanted to make sure that they can upload the picture and then they can talk to prove that they don’t want to cheat.

Andras Szocs

00:36:15

Actually, they just want to make sure that we know that there is something wrong with it. And we are running this service for one and a half years now. And again, I’m not saying that there were no corner cases, but not at all in the next time, which would, which I would call a problem. But obviously customers love this feature and, and the, the level of trust because of this increased up to the sky in most of our brands.

Paula Thomas

00:36:39

Yeah. And you’re absolutely right. Avocados, particularly. I never know if I’m buying a good one.

Andras Szocs

00:36:46

Yes, absolutely. Of course. That’s the top product. We were expecting that, but that, that that’s the top Fernanda. And again, we do random checks. We do fraud protection. We have a lot of rules built in, even customer service can look through the pictures and it’s not just a great service to the customers, but it’s also a great insight for our, the different departments. So buying department can identify if there is a particular, a lot of delivery that the quality was not fully in line with our expectations. So they can talk to the suppliers. We can identify any logistic or store standard issues. If there, you know, if there is something which is extraordinary in a region or in a store or in any, any part of the, of the, of the, of the process.

Andras Szocs

00:37:31

So it’s also a brilliant, a brilliant insight, fully supported with the right level of data, which we all love.

Paula Thomas

00:37:38

Yeah. I can hear that coming through under, you know, absolutely obsessing about the data and at scale, which is incredible and across so many different retail verticals. So you must get amazing insights as well. The other piece I wanted to just pick up on when you mentioned the digital receipts, again, I’ve heard some, you know, real customer delight coming through and actually from the environmental perspective, which is all fun, I think an unexpected benefit of digital receipts because, you know, we all go into the grocery store or the kiosk, or, you know, and we just normally just get this extra piece of paper and it goes to waste. I mean, who needs, you know, the receipt for the red bull or the avocado, as you said, but if that’s something that’s come through in your, and either feedback from customers, and is it something that customers have picked up on in, in Salling group?

Andras Szocs

00:38:32

I would lie if I would say that that was the biggest thing, but of course, for a particular customer segments and, and, and for The, for the greater CSR purpose. Yes. It’s, it’s still the customer’s choice to, to if they want the receipt or not. So we are asking them at the end of the journey, if you want your printed receipt or not, but obviously we can see that more and more people say no, and as they can use the, as they can use the digital copy of the receipt for even warranty purposes on, on, on electronic items, et cetera. Yeah, of course. That’s a, that’s a clear, clear benefit. Yeah. Yeah. So, so this is classically a service, which is just one of, one of the, one of the thousand benefits, which we are giving.

Andras Szocs

00:39:18

And that’s what I really like in our program that I cannot say that one standalone part or function of the app is the key driver. There is a lot of small bits and pieces for a lot of different customer types, and everybody can find one to five or seven, which they like. And that’s, that’s how we compose the program. That it’s a, it’s a mixture of a lot of different little convenient feature, which makes at the end of the day, your shopping trips, trips better and easier. And that’s the, that’s our mantra, which we trying to use. So we are not really focused on one thing, trying to give a lot of different things without, without making the app too complex, because that’s of course a balance you need to, you need to always keep.

Paula Thomas

00:40:02

Yeah. And I’d love to just hear your insights on the experience. And I suppose the customer reaction to the game of vacation elements, and I guess, you know, keen to understand if that’s an old three of your apps, you know, have you brought in gamification in every sector? You know, so I’m sure it’s very different, again, the customer profiles and whether they are in the, in the supermarket or in the department store. So tell us about your experience of, of gamification as a strategy.

Andras Szocs

00:40:32

Yes. Honestly speaking, that was the biggest surprise. So we smelled that it’s still people still love to play, but the level of level of engagement coming from the games is, is extreme. So it’s wonderful to see that, that a super high share of our customers. And I can tell it more than 10% of the active customers are playing at least the game during the, during the gaming periods where we are talking about, you know, a hundred thousands of people doing a scratch card or spin a wheel an honestly speaking for a funny small price. So it’s a chocolate bar. It’s a, it’s a gummy bear.

Andras Szocs

00:41:13

It’s a, of course it’s nice products. I’m not saying not, but it’s just super nice to see that level of level of engagement with the games. So it’s a kind of evergreen I can tell you. So I don’t know when the first paper scratch card was developed, but it’s ever since popular, there is a kind of family element, and I can tell you that from kids to grandma, everybody wants to scratch and everybody likes to scratch and they are coming back and do it in the app. So this is absolutely something we are, we are planning to build on. We are developing different level of games, even a little bit more complex games than just a, which is pure luck, but still we are trying and doing more and more and yes, in all-star format.

Andras Szocs

00:41:57

So from this Cantor to supermarket to department store, wow, they all like to play. And this is, again, this is I think, a very special customer group, a sizable customer group, but for them is important.

Paula Thomas

00:42:11

Okay. Fascinating. And, and I suppose to make sure, you know, my experience as well as absolutely like yours, the consumer engagement is incredible, but also I suppose the fact that it is a very cost effective loyalty strategy or engagement strategy, because as you said, the prizes don’t have to be expensive and the perception, it isn’t even about the value of the rewards, but instead of again, investing in points, which people, you know, don’t always see the value of your, your, again, having your integrity, intact, investing in rewarding your, your members as much as possible. And, but not in a way that’s super expensive.

Andras Szocs

00:42:50

Absolutely. And there is a trick behind this. So the simplest today, again, so previously when we run games, of course, the operational process behind that, how customer could get the price was the technical nightmare in the stores, because we need to allocate the prices. We need to make sure that there is a barcode, which the cashier needs to scan that strata. So that’s also another point where credit to cheetah, how they link together experience with the loyalty, because once you play the game and you won the product, it’s actually flying into the loyalty app as a, as a free product coupon. So the customer can just pick it from the shelf and walk out without paying for it.

Andras Szocs

00:43:32

So the store staff don’t even need to know that we are running a game. And that was a key, key, key parameter to convince the store guys, to let, let us run games. Because prior to that, when we had this opportunity, they were always okay, guys, great that it’s cheap for you, but it’s super expensive for us. And we need to explain to 15,000 colleagues that there is a game in place, et cetera. So since we simplified it, the whole organization love it. And that’s a critical thing because to run a successful game, buying department, operation digital, everybody needs to be engaged. Yeah. So this is another thing which you need to focus on as a, as a, as a loyalty program owner, that the whole value chain is simple under the point customers receiving the gift, because of course, can you imagine that how disappointing it is that you want something it shows in the app that I want you go to the store and poor store employee, because he’s just a student came to the store the first day, not have a clue what you are talking about.

Andras Szocs

00:44:32

That’s horrible. Let’s make the NPS completely due to the opposite direction, which you want to achieve.

Paula Thomas

00:44:37

And, and you measure NPS then obviously as, as you mentioned it,

Andras Szocs

00:44:41

Yes, of course we are. That’s another other thing in the app that we are talking to customers, and we are asking feedbacks and, and that’s also something which they love. So we are triggering the different personalized surveys based on your shopping behavior and trying to find out the device. And that’s working, working extremely valid. And, and this is again, also something we are doing via the experience platform and initiating surveys. And for, we are even trying to define together with customers or our future collections on, on textile and things like that. So this kind of two-way communication is, is brilliant. And they love to hear from us and, and, and customers love and be asking them about how was the shopping or what they would like to see in the stores or what they think about the product, especially when they may give the feedback that, Hey, based on your feedback, we develop that or, or made this change.

Andras Szocs

00:45:35

That’s amazing.

Paula Thomas

00:45:36

Yeah. It’s amazing. Isn’t it? You know, the, the simplicity of listening to your customers and I used the word simplicity actually, you know, complexity in terms of getting, getting to this stage, but the, again, the sheer value when people, when they feel like they’ve been heard.

Andras Szocs

00:45:51

Yes, absolutely. And this is exactly why I say it’s a customer program or not loyalty program, because there are numerous things which nothing to do with the class understanding of loyalty program. It’s a, we put, trying to put the customers into focus and trying to make a two-way communication on a digital channel. So, and of course, loyalty coupons is a part of the game. It’s a significant part, but it’s by far not the only one. Okay.

Paula Thomas

00:46:16

Okay. So with all of that said with the personalization, with the games, with the digital receipts, and as you said, like, you know, a very long list of, of wonderful benefits for consumers. What is next on the radar, I guess for Salling group from a loyalty perspective,

Andras Szocs

00:46:33

Honestly, we just decided that we’re going to, we’re going to run on the journey which we built. So obviously this is not going to be so, so we are not aiming for developing 75 more features it’s mostly to, to, to make them even more perfect, continue on the omni-channel journey to make sure that on all possible channel, our customer can enjoy their benefit, making it even more simple, even maybe review the things which not, not necessarily working. Perfect. So, so just to Polish it, just to make it shine. And, and so that’s, that’s, that’s, that’s one of the most important things, obviously, to continue on the promote transformation as it was the purpose from the, from the very beginning and of course exploring further or formats and, or, or group where to extend the program.

Andras Szocs

00:47:23

That’s of course also an exciting question because we are in, we are in four places, but as I said at the very, we have multiple different brands and countries, which are opportunity for us,

Paula Thomas

00:47:34

For sure. Yes. And the most exciting, I guess, for listeners today, particularly is the fact that Salling group has in fact, both the Tesco business in Poland, hasn’t it?

Andras Szocs

00:47:45

Yes, yes. We are in the middle of the core brick and mortar transformation, turning all Tesco stores into Neto. And that’s a very, very nice, but of course, a super demanding journey for a lot of people involved. So we are definitely going to be busy and yes, we are just basically doubled up the Denato portfolio in Poland. So that’s a super important and exciting market for us for the upcoming years.

Paula Thomas

00:48:12

Wonderful. My goodness. Well, that’s certainly all of the questions that I had for you on dress. Is there anything else that you wanted to mention for our listeners before we wrap up?

Andras Szocs

00:48:23

Honestly speaking, I think we did a, it did an extensive review of the program, so no, there is nothing special, thanks for the time for the listeners and I hope they enjoyed.

Paula Thomas

00:48:33

And if people do want to connect with you as well and dress on perhaps LinkedIn, are you comfortable with us sharing, for example, your, your profile and the Show Notes,

Andras Szocs

00:48:44

Please. Wonderful.

Paula Thomas

00:48:45

Yeah, it’s always super nice. I think there’s always those really nice conversations that can come out of things like this. So people will definitely appreciate the extraordinary program that you’ve built and the expertise that you have. So listen, I just want to say it’s been a very exciting conversation and I’m a huge fan of loyalty in retail, particularly, and as I said, I wasn’t aware of The Salling Group, but you’ve done extraordinary work. And as you said, credited to cheetah digital for guiding you, partnering with you, I think is the word that you’ve used and really supporting M some, you know, potentially complex and customer-focused requirements. But that certainly sounds like an extraordinary program. So with all that said, I will say Andre, Head of Customer Program and Customer Excellence at Salling Group.

Paula Thomas

00:49:31

Thank you so much.

Andras Szocs

00:49:34

Thank you very much and have a great day.

Paula Thomas

00:49:40

This show is sponsored by The Wise Marketer. The world’s most popular source of loyalty, marketing news insights and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty and marketing professionals. For more information, check out TheWiseMarketer.com and Loyaltyacademy.org.

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