Some Mecca customers are disappointed with the loyalty program. (file photo)
photograph: Unsplash / Alison Sen
Experts say the cosmetics retail giant is likely to be able to shake off any ill will from customers disappointed with its loyalty programs and discounts.
Newsroom has reported that Mecca has apologized to customers after selling items up to 10 years old during the Boxing Day sale, with tote bags found to have dye transferred to some people’s clothes as a “special beauty item” for those who reached a certain spending threshold.
Consumer NZ spokesperson Gemma Rasmussen told RNZ. panel She won’t consider a tote bag a beauty reward.
“We believe that Mecca was potentially misleading and may have also breached the Fair Trading Act,” she said.
She said Mecca shoppers tend to be “pretty dedicated.” “If you get an email telling you to spend more money and there’s a reward coming, that’s an invitation to people, and it’s pretty deceptive marketing.”
Bodo Lang, a marketing expert at Massey University, said compensation schemes like Mecca’s could be a powerful driver of customer acquisition and long-term loyalty.
“This is why many big retailers are investing heavily in them. Think Air New Zealand’s Airpoints, AA Smartfuel, or the loyalty programs of banks, credit card providers and New Zealand grocery retailers. Even local merchants are using them to capture a larger share of wallets.”
“But when a rewards program provides a disappointing experience, especially one that violates basic consumer expectations, such as offering products manufactured more than a decade ago, it can erode brand trust and cause shoppers to think twice about returning products. Trust is hard to build and easy to lose.”
But Chris Wilkinson, a retail consultant at First Retail Group, said Mecca’s plans were strong.
“The Mecca scheme is a huge draw for customers, and the brand is particularly well known and enjoyed by its offers and freebies among younger consumers who are entering the world of cosmetics and fragrances.
“These schemes, such as Farmers Beauty Club, are popular, especially as these products are expensive and the potential savings or ‘value-add’ is sought after and is often a turning point in purchasing.
“Mecca’s plans introduce new products and playfully encourage customers to experiment with beauty regimens, which largely reflects a younger audience.”
Mr Wilkinson said its success was evident in the expansion of its store count.
“In all other global markets, category leader Sephora ‘owns’ the space, but in Australia, Mecca has the upper hand and Sephora is on the back foot.”
He said the value of free gifts in this area has been a controversial issue for some time.
“However, the brand has quite strong goodwill and an evolving in-store experience, including new stores, new products and ‘featured’ brands like Charlotte Tilbury, so we don’t think goodwill will be too negatively affected, but perhaps only until the next ‘freebie’ message hits customers’ inboxes.” ”
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