Boots to cut promotions and revamp loyalty strategy

LONDON - Boots is to move away from promotional offers as part of a brand investment programme that will position the chain as a must-visit high-street destination.

The retailer is also planning what sources say is "a significant evolution" of its Advantage Card loyalty scheme to drive consumer spending and improve Boots' knowledge of its customers.

Boots is understood to have decided promotional tactics, such as the three-for-two product offers that have been a mainstay of its marketing for several years, should become less integral to its overall retail strategy.

Ann Francke, the former Mars and Procter & Gamble marketer who joined Boots in February as its strategic marketing director, is spearheading the brand investment programme.

"[Francke] believes that Boots should be much more about exclusivity, and giving consumers more powerful reasons for shopping there than the traditional product promotions," said a source close to Boots.

Francke is considering an overhaul of Advantage Card in order to improve Boots' data-mining and cross-selling opportunities.

The retailer, which will next month see the arrival of former Asda marketing director Richard Baker as its chief executive, is midway through a transformation project.

This includes slashing £100m from group costs and investing £40m in the current financial year in a campaign called "Lower Prices You'll Love".

Boots' most recent trading update, announced a month ago, provided more positive news for investors, with first-quarter sales growth of 4.7%.

Marketing has also learned that a review of Boots' agencies will constitute a wide-ranging overhaul of its entire agency roster, and not just its relationship with WPP's J Walter Thompson and MindShare.

Francke was not available for comment as Marketing went to press.

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