Bonmarché has said it wants to update its ‘Bonus Club’ loyalty scheme to improve the service offered to customers and get the most out of the data available.

The retailer, which has 1.6 million active customers on its membership scheme, has chosen loyalty as a key strategic aim over the next financial year.

While a customer survey from March 2017 suggested the scheme is popular and well liked, the loyalty card did not did not contribute to sales growth during the financial year ending April 1 2017.

The retailer said the Bonus Club has not kept up with the multichannel shopper and the way she shops.

Bonmarché admitted its focus had “drifted away from signing up new customers” to its loyalty scheme, while it also needs modernising as the online customer experience is not seamlessly linked to the store experience.

The retailer also said it is not using the loyalty data to its full potential to engage with customers or reward the most loyal shoppers.

Bonmarché said the improvements to the Bonus Club will be “relatively straightforward to implement”, but it plans to test changes to validate assumptions before introducing them to the customer.

Profits decline

The decision to focus on loyalty was made in the retailer’s 2017 financial results, where it reported a decline in profits from £9.6 million to £5.8 million. In last year's financial results, the retailer mapped out a major eCommerce and systems upgrade. Meanwhile, 2017 revenues crept up to £190 million from £188 million last year.

“A combination of internal and external factors over the past year prevented us from improving at the rate we had aimed for. However, we believe that the business is now well positioned, with a compelling proposition and robust plan,” said Helen Connolly, chief executive of Bonmarché, who joined the business a year ago.

“As outlined previously, it is clear that the direction of travel is broadly right, albeit the effectiveness of execution needs to improve,” she added. “Our update today provides further detail on the areas where we see the greatest opportunities and how we are already beginning to address these.”

eCommerce

Meanwhile, online sales increased 2.2% to £16.1 million over the course of the year, but the retailer considered this a “poor performance, given the general trend of consumers increasingly switching channels to embrace a multichannel approach”.

That said, online sales grew as the year went on, starting with a 4.1% decrease in Q1, compared to 15.2% growth in the fourth quarter, justifying Bonmarché’s smooth transition onto its new Demandware (now Salesforce Commerce Cloud post acquistion) web service at the end of September 2016.

“Having introduced the new platform, during the second half of the year we began to unlock the benefits of its new features, and believe that the improved performance since Christmas is partly as a result of this.”

Over the year, Bonmarché also stopped selling via the Ideal World TV shopping channel, and from stores hosted on eBay and Amazon, considering these channels “peripheral” and generating “insignificant profits”. The retailer said it will continue to review whether these third-party avenues are worth reconsidering in the future, but it has no plans to do so.