SIA1A
Member
- Joined
- May 23, 2007
- Posts
- 213
QUOTE from EDR message sent today:
[TD="width: 580, align: left"] WHAT IS CHANGING? [/TD]
[TD="width: 580"]
[TD="width: 554, align: left"]From Wednesday, 12 September 2012 , Dick Smith will no longer be part of the Everyday Rewards program. Members will not be able to earn Qantas Frequent Flyer points on purchases made at Dick Smith stores or at Dick Smith Online with their Everyday Rewards card from this date onwards.[/TD]
[TD="width: 26"]
[/TD]
[/TD]
[TD="width: 580, align: left"] WHY IS EVERYDAY REWARDS MAKING THIS CHANGE? [/TD]
[TD="width: 580"]
[TD="width: 554, align: left"]We continually review the earning partners of the Everyday Rewards program. As part of this review process, the Everyday Rewards and Dick Smith teams reached the conclusion that only a small number of Dick Smith customers were actively participating in the Everyday Rewards program. We, therefore, made the decision in conjunction with the team at Dick Smith to remove Dick Smith from the Everyday Rewards program.[/TD]
[/TD]
UNQUOTE
A few observations:
- The purchase hurdle for acquiring EDR points in conjunction with DSE purchases is $50, higher than the $30 that applies at other Woolworths outlets. A significant proportion of DSE sales probably doesn't trigger the issue of EDR points, reducing the EDR customer pool at DSE.
- Staff at DSE have not been trained to request EDR cards from customers at point of purchase - many people don't realise that DSE is part of the EDR scheme.
- DSE doesn't in general compete directly with stores that operate competing Rewards schemes (eg Harvey Norman has no Rewards scheme) while FlyBuys (part of Wesfarmers/Coles) does not have a dedicated consumer electronics chain in its camp. Target (FlyBuys rewards) and Myer (Myer rewards) do compete head-on with some products that are sold by DSE, especially with higher end products like TVs and computers, but customers are able to directly negotiate price with the relevant stores and final purchase decisions are probably related to the negotiated price rather than whether rewards points are offered. That said, if customers negotiate a similar price of, say, $2,000 for identical products at DSE and Myer, customers are likely to prefer dealing at Myer.
- DSE seems to be systematically removing key points of differentiation that it once offered the market. Example: Its famous customer satisfaction policy of allowing the return of any product (within 14 days?? of purchase) for a full cash refund, no questions asked, was abandoned about a year ago. DSE employees, once had good knowledge about the products DSE sells. Not these days - staff training has been reduced to minimal and the calibre of DSE employees nowadays is similar to DSE staff counterparts over at WOW supermarkets.
- Woolworths management has noted in multiple earnings announcements over recent years that DSE is not achieving the earnings performance of other divisions within the WOW portfolio of retail assets.
- Woolworths management announced some months ago that it is looking to offload its DSE subsidiary. Removal of the EDR scheme is probably part of the process for preparing the demerger and sale process.
[TD="width: 580, align: left"] WHAT IS CHANGING? [/TD]
[TD="width: 580"]
[TD="width: 554, align: left"]From Wednesday, 12 September 2012 , Dick Smith will no longer be part of the Everyday Rewards program. Members will not be able to earn Qantas Frequent Flyer points on purchases made at Dick Smith stores or at Dick Smith Online with their Everyday Rewards card from this date onwards.[/TD]
[TD="width: 26"]
[/TD]
[TD="width: 580, align: left"] WHY IS EVERYDAY REWARDS MAKING THIS CHANGE? [/TD]
[TD="width: 580"]
[TD="width: 554, align: left"]We continually review the earning partners of the Everyday Rewards program. As part of this review process, the Everyday Rewards and Dick Smith teams reached the conclusion that only a small number of Dick Smith customers were actively participating in the Everyday Rewards program. We, therefore, made the decision in conjunction with the team at Dick Smith to remove Dick Smith from the Everyday Rewards program.[/TD]
UNQUOTE
A few observations:
- The purchase hurdle for acquiring EDR points in conjunction with DSE purchases is $50, higher than the $30 that applies at other Woolworths outlets. A significant proportion of DSE sales probably doesn't trigger the issue of EDR points, reducing the EDR customer pool at DSE.
- Staff at DSE have not been trained to request EDR cards from customers at point of purchase - many people don't realise that DSE is part of the EDR scheme.
- DSE doesn't in general compete directly with stores that operate competing Rewards schemes (eg Harvey Norman has no Rewards scheme) while FlyBuys (part of Wesfarmers/Coles) does not have a dedicated consumer electronics chain in its camp. Target (FlyBuys rewards) and Myer (Myer rewards) do compete head-on with some products that are sold by DSE, especially with higher end products like TVs and computers, but customers are able to directly negotiate price with the relevant stores and final purchase decisions are probably related to the negotiated price rather than whether rewards points are offered. That said, if customers negotiate a similar price of, say, $2,000 for identical products at DSE and Myer, customers are likely to prefer dealing at Myer.
- DSE seems to be systematically removing key points of differentiation that it once offered the market. Example: Its famous customer satisfaction policy of allowing the return of any product (within 14 days?? of purchase) for a full cash refund, no questions asked, was abandoned about a year ago. DSE employees, once had good knowledge about the products DSE sells. Not these days - staff training has been reduced to minimal and the calibre of DSE employees nowadays is similar to DSE staff counterparts over at WOW supermarkets.
- Woolworths management has noted in multiple earnings announcements over recent years that DSE is not achieving the earnings performance of other divisions within the WOW portfolio of retail assets.
- Woolworths management announced some months ago that it is looking to offload its DSE subsidiary. Removal of the EDR scheme is probably part of the process for preparing the demerger and sale process.
