Co-operatives revolutionised the concept of ‘membership’ and ‘dividends’.
As membership grew, UK households all knew their ‘divi’ number – and if it wasn’t your mum’s you knew, it was your gran’s. This is still how co-op membership and the dividend is largely seen by millennials. For someone in their 20s, the divi was something for previous generations, and not necessarily something they are aware of as being relevant now.
However, 20-somethings today are the shoppers of the future, and where membership growth and participation needs to be aimed.
Co-operatives need to articulate how ‘loyalty’ is rewarded – and extend relevant membership offerings – to this generation.
Current rewards tend to be in the form of dividend cheques, mailed out to a co-operative’s members either bi-annually or annually.
The Co-operative Group, with its ‘Meaningful Membership’ initiative, is looking to address this. The Group’s chief executive, Richard Pennycook, said that the annual dividend will be paid out again once the organisation has completed its rebuild.
But from the autumn, members will receive 5% of the amount spent on own-brand products into their member ‘account’ (with a further 1% going towards community initiatives) – an instant reward that can be redeemed on their next transaction.
How can this be taken a step forward? “Co-operatives are all about membership,” said Barry Wood, chief executive officer at Chelmsford Star Co-operative, “but the membership offering needs to be compelling.”
How do we make it compelling? Do we focus on fairer monetary rewards for members, or do we concentrate more on co-operative values and principles – the co-operative difference – to boost appeal? How do we attract younger shoppers to our stores?
It’s the lack of vision that is the only thing that holds us back, not technology
Is it enough just to run a smart coupon campaign to attract any lapsed members of that group back and increase footfall? Or should a co-operative be running differential pricing campaigns, clearly highlighting member-only promotions?
“It’s the lack of vision that is the only thing that holds us back, not technology,” said Mr Wood. He’s right – the technology is out there. Celtech’s ab-initio system, for example, has standard features such as differential pricing, member-only promotions and real-time stock checking that can be incorporated into applications that offer a direct benefit to members. How could such solutions be applied?
In January, Scotmid Co-operative launched a membership app which doubles as a membership card and delivers special offers and more regular member benefits straight to the palm of members’ hands. The potential for other such apps is extraordinary.
One issue that apps could address is the ‘distance’ between the customer and local suppliers – building up local community ecosystems. The technology is available, for example, that could engage consumers with suppliers – recognising when a member returns for a specific product, and rewarding them with a ‘thank you’ coupon sent via a mobile app.
Co-ops could further embellish members’ in-store experiences through sharing recipes and enabling customers to download a shopping list. An app could then tell them if the ingredients are in stock at their local store – and if they are not, the next-nearest location. Or if a specific item on their shopping list is out of stock, the app could store this information and flag to the member the next time it’s available – and issue a good-will coupon. True membership benefits.
Members could also opt-in to links with their local communities through the app, hearing about events, or engaging with their society on charity and community partnerships.
As we see the movement towards more simplicity in retail technology, co-ops are exploring how to give members greater autonomy over how they redeem their benefits. We are living in a time of instant gratification – and members now expect immediate rewards.
Co-operatives are no longer the only ‘community’ retailer, and they face competition from others who are flying the flag for ‘local’. However they are also truly unique, and their authenticity was built upon the fact that they were founded on the concept of mutual ownership – and accountability to those owners. They need to make the idea of ownership meaningful again.
In this article
- Barry Wood
- Business models
- Chelmsford Star Co
- Chelmsford Star Co-operative Society
- chief executive
- Darragh Fanning
- retail technology
- Richard Pennycook
- Rochdale Principles
- Scotmid Co-operative
- The Co-operative brand
- The Co-operative Food
- The Co-operative Group
- United Kingdom
- North America
- United Kingdom
- Top Stories