David Jones and Myer’s loyalty battle goes nuclear as DJs brings in Qantas Frequent Flyer
David Jones fitted out female cabin crew in 1947 for the London route. Now, it has hooked up with Qantas Frequent Flyer for its new loyalty scheme as the war with Myer heats up.
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It’s war. Australia’s department stores have taken traded fashion clout to duke it out over customer loyalty schemes, and David Jones has brought in a big gun: Qantas Frequent Flyer.
Just as rival Myer is primed to relaunch its own customer loyalty offering (designed by Myer boss and former Frequent Flyer exec Olivia Wirth, no less), David Jones on Thursday will announce Qantas as its new rewards and loyalty partner.
The emphasis on loyalty programs by both the 187-year-old David Jones and 125-year-old-year old Myer highlights the growing importance both retailers place on getting rewards right to win over and keep customers.
In a neat twist of history, David Jones and Qantas have a relationship that stretches back to 1947 when DJs was hired to fit out the female cabin crew on the ‘Kangaroo route’ from Sydney to London.
David Jones will launch its first ever fully functional and digitally enabled rewards program in October, at roughly the same time Myer’s Ms Wirth will unveil her supercharged and expanded Myer One scheme.
Ms Wirth – who over six years built the Qantas points scheme into an earnings powerhouse – is now ensconced as the executive chair of Myer where she has partnerships with companies like Virgin Australia, Commonwealth Bank and Coles.
David Jones chief executive Scott Fyfe said his new cornerstone partner was enabled by a $65m investment by the department store’s owner, private equity firm Anchorage Capital Partners, to reinvigorate the customer offering.
“To connect seamlessly with customers allows for individual and personalised offers, and allows us to segment our customer base to ensure we have got customers that continue to shop with David Jones,” Mr Scott told The Australian as he launched the venture alongside Qantas Loyalty CEO Andrew Glance.
“We have done a global benchmarking of this across many different loyalty schemes … and clearly what loyalty schemes do is that it gives rewards, it gives value for money and most of all it gives choice.
“The partnership with Qantas is hugely strong for us, but fundamentally the David Jones rewards scheme will reward our customers based on frequency, whether you shop online, whether you shop in stores. And clearly, having the best curation of brands in the world gives customers ultimate choice and value for money.”
Mr Scott said the new David Jones rewards program, which is separate to the current DJs credit card and points scheme, scoped out other department store schemes, and he was particularly impressed by Nordstrom in the US and Selfridges in Britain.
Under the partnership with Qantas, David Jones shoppers will be able to earn and redeem either David Jones rewards points or Qantas points. David Jones shoppers can redeem their Qantas points on a wide range of rewards across the Qantas Frequent Flyer program, including 20 million reward seats, flight upgrades, hotel stays and other travel perks.
Myer does have Qantas as a partner in its Myer One rewards program, however Mr Glance, who is Ms Wirth’s successor, signalled DJs had the better deal.
He said it was a different relationship than what Myer presently has, which he described as “very simplistic”.
“This (David Jones) is a deeply integrated partnership, not only through the 40 stores, but also through online, it will provide a deeply integrated experience point of sale and effectively provide benefits across the entire program,” Mr Glance told The Australian.
“So fundamentally different (from Myer). And from our perspective, this is a cornerstone partnership that will be showcased across our audience.
“One in two Qantas Frequent Flyers already shop regularly at David Jones, and once live, will offer members even more opportunities to be rewarded when shopping the brands they love. The number of points members have earned through retailers has doubled in the last five years, and we anticipate it will double again by 2030, as we expand our footprint across a growing range of retail categories.”
Last month Ms Wirth presented her strategy to analysts and investors which featured a strong focus on the renewal and relaunch of Myer One that boasts 4.6 million members and is a driving force for sales at Myer both in store and online.
Left out of the rewards stakes for decades, David Jones is now fighting back.
Launched in 1987, Qantas Frequent Flyer is one of Australia’s largest loyalty programs with over 17 million members. Two-thirds of all Qantas points earned by Frequent Flyers are done through financial services, retail transactions, insurance, health and wellbeing, and other categories.
The further investment in loyalty comes as Mr Fyfe and Anchorage spend $65m on the department store’s IT and digital infrastructure that includes a mobile shopping app which now has 140,000 customers. Store refurbishments are part of the upgrade too.
Turning to trading conditions, Mr Fyfe said it has been “tough” for customers against a backdrop of global economic turmoil and the federal election but that interest rate cuts and seasonally colder weather should benefit the chain.
“What we are delighted to see was a (interest rate) base rate drop a couple of weeks ago, which is now starting to flow through to customers, and we think will improve customer sentiment. The weather has turned in our favour, cold weather in Melbourne and Sydney today, as I flew up here, was very welcome. And a couple of more base rate drops wouldn’t go and miss for us … we (would) like customers having more money in their pocket.”
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