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OPINION13 September 2013

Co-op’s student discount initiative shows the value of insight when aiming for customer loyalty

The announcement by Co-op that it is to become the first supermarket to offer a discount for students on food shopping underlines the growing trend for retailers and brands establishing relationships with consumers based on lifestyle priorities and challenges. It also demonstrates a recognition by Co-op that you can create loyalty through use of customer insight.

The announcement by Co-op that it is to become the first supermarket to offer a discount for students on food shopping underlines the growing trend for retailers and brands establishing relationships with consumers based on lifestyle priorities and challenges. It also demonstrates a recognition by Co-op that you can create loyalty through use of customer insight.

It is estimated that up to 600,000 students will be able to claim a 10% discount on their food shopping by using their NUS Extra card. The move also fits well with the Co-op’s position as a business owned not by a small group of shareholders, but by more than five million consumers. 

On the face of it, this is a clever move. First, it positions Co-op well with students, many of whom are just leaving home for the first time and may be nervous about how they are going to cope. Second, it represents the brand well in terms of assisting them to eat, hopefully healthily, on a budget and, as importantly, it will sit well with their parents. It may be that not only will Co-op get student business but they may also get some additional parental footfall as well. 

There are, though, some caveats. This is obviously going to work best where there are Co-op stores in student areas so that it is convenient for students to take advantage of the offer. Cost-conscious students will make a judgment over whether the cost of shopping at Co-op, even with the deal, remains more favourable than going to another discounter. And, of course, although all the intentions are good, I don’t suppose you will ever stop many students from spending the lion’s share of their budget on alcohol. 

However it will be just as important for Co-op to monitor the success of the initiative to see how it benefits them over the medium term, both quantitatively in terms of how much revenue is driven through the NUS card in store but also qualitatively in terms of attitudes among students and, indeed other customers, towards the brand and this initiative.How they manage those relationships over the next few years will be key to retaining the loyalty of their student customers after they have completed their studies. To achieve this they will want to get authentic and valuable insights to inform their planning and to ensure that they know and understand their customers to the extent that they can form proper relationships with them. A qualitative research approach through detailed face to face interaction with students would be one of the routes to take. 

This is the age of the informed consumer, who, largely due to the availability of social platforms as a way of disseminating views and comparing one brand against another, has more power than at any point previously and who is increasingly unafraid of using it. Co-op will be hoping that social media savvy students will take to their laptops to promote this initiative on their behalf. 

@RESEARCH LIVE

2 Comments

6 years ago

This is obviously going to work best where there are Co-operative stores in student areas so that it is convenient for students to take advantage of the offer. Cost-conscious students will make a judgment over whether the cost of shopping at Co-operative, even with the deal, remains more favourable than going to another discounter. And, of course, although all the intentions are good, I don’t suppose you will ever stop many students from spending the lion’s share of their budget on alcohol Market research

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6 years ago

Co-op hoping that their NUS discount card will go viral ? Not sure about that but the money off for students is a good plan - getting loyalty at this key stage of life is important but still think the store with best offers on Vodka/redbull/Beer/Cider will be the students choice!

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