John Gibbard

We have to begin by making the assumption that Waitrose made the decision to ‘force’ their loyal customers to choose their own offers on the basis that it would engender those customers to the brand and this would benefit the business. That is to say that someone at Waitrose ran the numbers and built a business case that said “This will be good for our business”. Now, there’s also a complication (that I freely admit I don’t fully understand) that getting more people to convert on these offers presumably means they lose margin on the specific sale but there is a general uplift on the basket of goods. One estimate put the cost of the scheme at a potential £5m to Waitrose.

From The Guardian, this is how it works:

To use the scheme shoppers must have a myWaitrose card. They can then create an online account, log in, and view the full list of almost 1,000 products from which to select the 10 items they want. They will then get 20% off the cost of these goods, however many times they buy them.

Discounts last for a fixed period, […]. After that shoppers get the chance to choose from a new list. The discount is applied automatically at the checkout, and is on top of other promotions. For example, chickens are currently £10 for three, with the 20% off on top of this.

I’m not a retail analyst. I am merely musing on a set of behavioural biases. A lot of the articles about the scheme are rich with chat about whether it’s a good deal or not for the customer. These article presuppose that the customer has done the work and selected the most pertinent 10 offers for them.

And that, dear reader, is quite the presupposition. More on that in a minute.

Talking of suppositions, Waitrose themselves make one by assuming that customer choice in this sphere is a good thing. Now, they may have done research that told them ‘customers want to choose their offers’. We know, however, that customers – human beings – are not that good at making unbiased decisions. That’s what behavioural theory tells us. Unless the research was rigorously executed with absolutely no bias then I have little faith in the leap Mark Price makes in this BBC News article from June:

The boss of Waitrose, Mark Price, says it’s a ground-breaking move giving customers the power to choose the offers they want.

“Different forms of personalised marketing have been around since the 1990s, but we’re introducing mass customisation in grocery. Customers can choose what’s valuable to them when they shop for groceries. We really are giving power to the consumer,” he said.

Ground-breaking it might be. Doesn’t make it right though.

A host of paradox of choice experiments have been run which demonstrate we are confounded by choice; too much choice, particularly where there is considerable cognitive effort involved in the eventual decision, makes that choice harder to make. We know that increasing choice (often) results in:

• Regret that we made an incorrect choice. We have no-one but ourselves to blame.
• Loss of presence; effectively question why we’re doing this task in the first place.
• Elevated expectation, we’ve been given this choice, we have to make the most of it.
• Peer pressure, other people would make better choices.

With the possible exception of the last item, the myWaitrose scheme falls, in my opinion, into this trap. The illusion of control and freedom it presents, coupled with the possible cost savings is insufficient motivation for me to get over the hump of the effort required to actually do it. As a customer and myWaitrose member, I must have received 20+ emails and direct mails encouraging me to take up my offers, I have never done this beyond a cursory look online. The reason is plain and simple: I cannot be bothered. Even before I’d seen the summaries in the aforementioned articles that showed around a 10% saving on a basket of goods (vs. Tesco) and that the hyped 20% on offer isn’t really against staples but more high-value infrequent goods.

Stopping to think about the customer touchpoints and the interface here might help illustrate. It’s right out of the mantra of Don’t Make Me Think, perhaps that’s idealistic in this day and age, some things are inherently complicated, but saving money at a supermarket shouldn’t be difficult (as pointed out in this fantastic work by Lidl).

myWaitrose try and make things easier by pulling in the favourites from your recent in-store, online and Ocado shops, using these to guide you toward things you’re likely to want offers on. Aside from a couple of high-frequency items like baby wipes, I found myself getting stuck as the task of completing the 10 slots (actually a good, persuasive interaction pattern) became tricky. The value of these slots is such that you want to make the most of them, you don’t want to waste the 10 scarce slots with bad choices. So the decision gets harder.

You, the customer has to do some tricky things. Workout how best to ‘spend’ your ten offer slots. You’re effectively making 10 assessments on whether the offers are for items you’re likely to actually buy (wants vs. needs), taking a view on when you might buy them, and, of course, establishing whether the saving is considerable (accounting for multipacks, alternative places you might get them from etc.). The ‘when’ assessment here matters quite considerably; it’s not made particularly clear when these offers expire and the customer has to predict their own behaviour: “Am I likely to buy this in my next shop?”. They are highly unlikely to be making a prediction based on the likelihood to need an item in 2 month’s time, much of this will be based on the availability heuristic, meaning that they will be thinking about their most recent purchase of that item.

In short, it ain’t easy.

Time and data will tell Waitrose whether the process works for them. Whether the small % of their customers who have a loyalty card (and note, loyalty schemes tend to reward the already loyal, not magically create new loyalists) go through the process and buy more of the stuff they were already buying (one little-promoted benefit is that the offers are repeatable within the period so you can keep saving). My hunch is that the number of engaged and active myWaitrose offers is not the point. This is a brand exercise, encouraging people to think that Waitrose are all customer-focussed and that maybe having one of their free loyalty cards is a good thing. The important thing to Waitrose is knowing which customers spend on what products. I just wonder how long it will be before customers figure out the scheme just isn’t for them and that data mine ceases to be profitable.

EDIT: Update 08.FEB.2018 …. Waitrose close their PYO Offers scheme saying: “We’re always listening to our customers’ feedback on how we can make your shopping experience with us even better. Customers have increasingly told us they have difficulty remembering what their Pick Your Own choices were and how to update them, so we will be stopping ‘Pick Your Own Offers’ after 28 February. We will now be providing tailored vouchers and personalised offers through the post or at the checkout to make it easier for you to make savings on your favourite products.” It only took 3 years to come to that conclusion….