Engage: Co-operative’s student discount initiative shows value of insight to loyalty

The Co-operative’s plans to offer a discount for students on food shopping underlines the growing trend for retailers and brands establishing relationships with consumers based on lifestyle priorities and challenges. 

That’s the verdict from customer insight agency Engage Research, which says the announcement demonstrates a recognition by the Co-operative that you can create loyalty through use of customer insight.   

It is estimated that up to 600,000 students will be able to claim a 10% discount on their food shopping by using their NUS Extra card. The move, says Engage Research director Lyndsay Peck also fits well with the Co-op’s position as a business owned not by a small group of shareholders, but by more than five million consumers.  

“On the face of it, this is a clever move by Co-op,” said Peck. “First it positions Co-op well with students, many of whom are just leaving home for the first time and may be nervous about how they are going to cope; second it represents the brand well in terms of assisting them to eat, hopefully healthily, on a budget and, as importantly, it will sit well with their parents. It may be that not only will Co-operative get student business but they may also get some additional parental footfall as well.” 

There are, though, some caveats, Peck adds. 

“This is obviously going to work best where there are Co-operative stores in student areas so that it is convenient for students to take advantage of the offer. Cost-conscious students will make a judgment over whether the cost of shopping at Co-operative, even with the deal, remains more favourable than going to another discounter. And, of course, although all the intentions are good, I don’t suppose you will ever stop many students from spending the lion’s share of their budget on alcohol.” 

However, says Peck, it will be just as important for Co-operative to monitor the success of the initiative to see how it benefits them over the medium term.  

“The Co-operative will want to continue to monitor the success of the programme, both quantitatively in terms of how much revenue is driven through the NUS card in store but also qualitatively in terms of attitudes among students and, indeed other customers, towards the brand and this initiative. How they manage those relationships over the next few years will be key to retaining the loyalty of their student customers after they have completed their studies.” 

Engage Research offers a broad range of experience across brands, categories, markets and business issues using a wide range of research techniques in markets across the globe. The company has particular expertise in innovation, consumer and market strategy, pricing and conjoint research in the drinks, FMCG and media sectors particularly.