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Banking Business Review: French loyalty cards: S’Miles better for Shell

28th September 2006
By Anne Marie Davis

Groupe Caisse d’Epargne has joined Shell in S’Miles, a major syndicated retail loyalty card scheme in France. The French retail bank will represent a welcome addition to the scheme for Shell, increasing the number of card touch points for its customers in a market where an independent loyalty card may not be the best route for the fuel retailer.

Groupe Caisse d’Epargne bank serves 26 million customers in France and has one of the largest distribution networks, with around 4,300 branches and 5,900 ATMs across the country. Now that it has joined the S’Miles scheme, members of the bank’s Satellis service will be offered free membership to the scheme.

The S’Miles program has 12 million customers and there are 46 scheme members, including French railway operator SNCF, Casino supermarkets, department store Galeries Lafayette and Shell. Caisse d’Epargne will be a welcome addition for Shell as withdrawals from the company’s ATMs will earn all scheme members points.

There are two key loyalty card options for traditional fuel retailers. The first is to have an independent proposition such as Total’s ‘La Carte Club,’ which enables members to redeem points for products and services including small gifts, hotels and roadside recovery. In general, such schemes require a significant amount of spend for motorists to redeem anything of real value, with the more attractive programs allowing points to be redeemed against fuel purchases. In most European markets, however, the opportunity to offer such fuel rebates is limited by slim fuel margins. Furthermore, in France, traditional fuel retailers have a relatively low market share given that most fuel in the country is sold by hypermarkets.

The alternative is to join a syndicated loyalty program that gives members a greater number of touch points, such as S’Miles, the Nectar scheme in the UK and Payback in Germany. Under such schemes, points can be redeemed for something of value more quickly.

Being one of many companies involved in a scheme often means that the program does not always suit the needs of each individual participant, but given that Shell currently holds less than a 5% share of the French fuel market by volume, a syndicated scheme is likely to be the best option for the company. Moreover, the addition of Caisse d’Epargne only serves to further engage scheme members off the forecourt, increasing member numbers and thus potentially encouraging more members to earn points at Shell forecourts.

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