Grocery chain Sobeys’ parent company is shaking up Canada’s customer loyalty industry by joining Bank of Nova Scotia and Cineplex Inc. CGX-T as a co-owner of Scene+ rewards and dropping out of the Air Miles program.
Empire Co. Ltd. EMP-A-T, which owns a national network of grocers and drug stores, is acquiring a stake in Scene+ as part of a strategy to deepen ties to shoppers and better compete with rivals such as industry leader PC Optimum, owned by Loblaw Co. Ltd. L-T As a client of Air Miles, Empire currently shares its rewards program with other retailers, including grocery chain Metro Inc. MRU-T
Empire chief executive officer Michael Medline said in an interview that “customers will enjoy a more exciting, personalized relationship” with Sobeys, FreshCo, IGA and the chain’s other stores as the new loyalty program is rolled out over the next nine months. He said the shift to Scene+ gives Empire better access to customer data and “is one of the final elements of our transformation strategy at Empire,” which also included launching the Voilà home delivery service.
Scene+ and Air Miles each have approximately 10 million clients, while PC Optimum has 18 million, according to company releases. Air Miles is owned by Nasdaq-listed Loyalty Ventures Inc.
Cineplex and Scotiabank co-founded the original Scene program in 2007. When Top Gun: Maverick premiered at Cineplex theatres last week, 50 per cent of moviegoers used a Scene+ card when buying tickets and popcorn. CEO Ellis Jacob said: “Candidly, when we launched Scene+, we never imagined a loyalty program could grow this large, and now we’re taking it to new heights.”
As moviegoers return to theatres after pandemic-forced shutdowns, analyst Drew McReynolds at RBC Capital Markets said Cineplex is boosting attendance by “leveraging customer data to drive attendance and frequency” with Scene+ and other loyalty programs.
Scene+ currently offers travel rewards through Expedia and meals at restaurants owned by Recipe Unlimited. However, Scotiabank CEO Brian Porter said in an interview that the bank’s research showed customers put a premium on having the option of buying groceries with their loyalty program points. He said: “There’s over a 100-year history between Empire and Scotiabank and we are thrilled to build on that relationship by partnering on Scene+.”
Empire is earning a one-third ownership stake in Scene+ by contributing its customer base to the partnership, and Mr. Medline said no cash is changing hands in this transaction. Empire expects Scene+ to make a positive contribution to the retailer’s sales and profits by next year.
Stellarton, N.S.-based Empire plans to initially introduce the Scene+ card to customers in Atlantic Canada in August. The company will gradually roll out the program to the rest of Canada and expects to complete the launch by early 2023.
“Scene+ is on the cusp of a really tremendous evolution,” president Tracey Pearce said in a press release. Ms. Pearce, who joined Scene+ last month after serving as a senior executive at Bell Media, said: “We will offer Canadians an innovative loyalty offering powered by some of Canada’s strongest and most beloved brands.”
Canadians are among the world’s most frequent users of loyalty plans, according to research by KPMG, with 56 per cent of the population using a program at least once a week. The average Canadian belongs to five loyalty programs.
“A loyalty program is one lever in a company’s arsenal,” KPMG partner Kostya Polyakov said in a report. “Where it really matters is when the program helps you better understand your customers’ needs and expectations and provides you the information needed to drive tailored offers.”
Empire also plans to introduce Scene+ at its Lawtons drug chain and Western Canada liquor stores. In a report, analyst Irene Nattel at RBC Capital Markets said Empire has a long-term strategy to win market share from Loblaw, Metro and other grocery stores by increasing spending on e-commerce initiatives, including its loyalty program, and launching more discount outlets. “In our view, however, none of the incumbents will cede share easily,” she said.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.