Medibank Private recently announce an agreement with the Coles Flybuys program where customers will qualify for one FlyBuy point for every $2 spent on monthly health premiums and triple points on dollars spend on fruit and vegetables in Coles stores. This adds up to a saving of $250 a year for a family of 4.
Who is funding this sizeable saving? Are customers paying more for groceries or more on health premiums? Customers do not have to necessarily pay more on either if the supply chain is improved.
If the supply chain can be managed, upwards or downwards, higher margin in-store brand products can be sold at a higher value per kilogram. This is where Coles' interest in packing freshly made salads starts to make a lot of sense. If vegetables can be washed, pre-cut and packed into ready to eat portions, customers will pay more per kilogram for fresh food.
Medibank Private is managing its supply chain through its 'members choice' providers, which leaves members with $0 out of pocket in many cases.
Both organisations have a few million customers, Flybuys were quoted to have 6 million members, Medibank Private, 4 million members. With the obvious overlapping of members, and scope to grow and add value for customers, these organisations are creating new customer colonies whose buying preferences are influenced on both a conscious and eventually on a subconscious level. Perceived benefits are high in times when customers' attention span for finer details such as actual points accrued through loyalty schemes or reduction in health benefits are limited.
The impact on consumer behaviour through innovative collaboration systems such as this will be fascinating.
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