Magazine article Marketing

Catalina Trials in the Dock

Magazine article Marketing

Catalina Trials in the Dock

Article excerpt

US loyalty-scheme company Catalina has not made the impact in the UK that it did on its home territory. Julian Lee asks why

In 1992, the mighty US corporation Catalina first appeared on the UK horizon promising to be the most sophisticated customer-loyalty tool retailers this side of the Atlantic had ever seen.

Catalina lost no time in approaching retailers and suppliers to sign up to a system that could build brand loyalty and increase footfall in supermarkets.

Within months Asda and 74 leading brands began a ten-week trial.

Soon after Asda began rolling out the system. It appeared that Catalina was the 'next big thing' on the marketing scene.

Four years later and a different picture is emerging. Catalina is struggling to sign up the retailers it so badly needs in order to attract brand owners with the promise of maximum coverage of UK households.

Sainsbury's rewards itself Last week, Sainsbury's confirmed it had withdrawn from a 50-store trial. With last month's roll-out of its nationwide Reward Card, the retailer no longer has a need for a separate loyalty device.

Somerfield's 18-month trial in five stores has also run into the sands. "We are continuing a trial but it is fair to say we are concentrating on our Premier Points scheme. A full evaluation or Catalina will be made very soon," says a Somerfield spokeswoman.

And now Iceland. The frozen-food retailer has postponed a 34-store trial until later this year, because a major store refit programme "could have an adverse effect on the stores earmarked for trial".

To date, Asda is still the only retailer taking part in Catalina. In spite of the setbacks, the company is optimistic, if somewhat irked by the lack of take-up by UK retailers. "It is our biggest frustration that we have not expanded faster but we will continue to pursue the retailers and expand our retail base," says Catalina founding director Nigel Oddy.

The UK picture is in stark contrast to the company's US performance, where 9700 supermarkets take part in Catalina, and have built up a business with a turnover of [pounds]90m ($135m) in a decade.

One source, who has been closely involved with negotiations, explained why: "Retailers over here are a very secretive bunch and they don't like anyone else muscling in on negotiations with their suppliers. It's a good system but it bring into conflict the needs of the retailer and those of the supplier. …

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