A new loyalty program, or as JB Hi-Fi likes to call it ‘JB Perks’ program, is being rolled out that will incentivise consumers to keep coming back to the big retailer, as opposed to shopping at direct sell brand stores.
The move to trial the new program comes as several JB Hi-Fi suppliers move to try and strip sales away from JB to their own websites, a move that is not going down well with management at JB Hi-Fi, The Good Guys and Harvey Norman as well as the likes of Bing Lee.
In the appliance market, retailers are being forced to operate what Miele calls their Chartered Agency system, where a retailer sells a product and Miele handles the rest, including knowing who the retail customer is. This has led to conflict, with retailers claiming they are simply handing over valuable client information.
According to one major retail partner of Miele, retailers operating via this program are also generating leads for Miele, who then open their own retail experience store to sell direct, or then approach the original retail customer with marketing activity in an effort to sell new products directly.
According to a senior executive at a major appliance retailer (Not The Good Guys), “Miele is not alone in adopting this model. Several premium appliance brands are now using retailers to do the first sale, then building out their own database of customers to sell direct when it comes to further or new sales.”
Under the Miele model, the German Company essentially sets up a concession within retail stores, such as Harvey Norman, Winning Appliances or E&S Trading, and, using Miele’s own POS system, retail staff act as agents for the German brand.
Now JB Hi-Fi and The Good Guys are hitting back, with consumers flocking to their new program which was soft launched in November 2022.
The program offers member discounts, access to upcoming sales and product launches.
In the consumer electronics market Samsung admits they are driving as much business as they can to their own website, as they are currently doing with the recent release of the new Samsung Galaxy S23 Ultra.
In the three months since launching, JB Hi-Fi has seen close to 500,000 consumers sign up for their loyalty offering.
The big difference is that JB are able to bring together multiple brands to offer discounts, early trials of new products as well as multi brand incentives.
Observers are tipping that the program could hit a million users by June. “Especially as consumers who are facing inflation issues go hunting for value or value add deals,” says one observer.
Talking to The Australian, JB Hi-Fi chief executive Terry Smart says the program is designed to help the retailer to “join the dots” between the customers who are purchasing online and the customer shopping in-store. This means they can target in-store shoppers in different ways, for example if they are an Apple user verses a Samsung user, and start providing pricing benefits through the program.
The ultimate strength of JB Perks will come as it gets more momentum and suppliers will start looking to fund promotions into the program, given it promises “laser like” targeting of customers. This will ultimately help drive JB’s top line sales growth.
Smart claims that, “Suppliers will really step up and support this program as it continues to roll out and grow in numbers.”
He believes that JB’s younger and tech-savvy customer skew makes them early adopters and is important to suppliers looking to maximise sales for their new products.
At the same time, The Good Guys has a lock on established and first-time homeowners and are able to offer customers added value when it comes to appliances and home care.
