Halfords: Loyalty scheme is driving more profitable transactions

Halfords says its loyalty scheme is driving more frequent and profitable transactions, as it looks to demonstrate its value to consumers.

The motoring and cycling retailer reported its ‘Motoring Loyalty Club’ now has over 2.5m members. At the end of March 2023, it had 1.7m members, and by June it had around 2m members.

Loyalty club members are spending more and with increased frequency versus those not in the scheme, the retailers told investors today (6 September). Members of the scheme spend an average of £266 per transaction versus non-members, it said.

The scheme was launched in March 2022. It is a two-tiered scheme, with members having the option to join a free scheme or a paid subscription service that carries more benefits, including free MOTs and next-day delivery.  All members are given access to exclusive discounts and offers.

In its full year results, it reported that it had 125,000 paid members as of the end of March. It did not provide an update on the number of paid subscribers in today’s results.

GlobalData retail analyst Jamel Boughedda described the role of Halfords’ loyalty club as “crucial going forward”.

“This programme will help in attract new members and maintain high spending levels when consumers are cutting their budgets,” he said.

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The retailer is focused on providing value to maintain profits during a time when consumers are still cutting discretionary spending during the cost of living crisis. In the 20 weeks to 18 August, it saw a 2.7% like for like decline in revenue generated through its “more discretionary” cycling business.

By contrast, its “needs-based products”, such as its autocentres and motoring retail grew. Revenue from its autocentres grew 16.6% year-over-year.

Halfords saw overall revenue growth of 7.8% on a like-for-like basis, driven by these “needs-based” categories. The retailer is focused on offering value in this area to fuel continued growth.

“We’re continuing to do everything that we can to support our customers through the cost of living crisis and are determined to offer them unrivalled value,” CEO Graham Stapleton said.

Its motor repair services is one area where the brand is looking to convey this message of value. Today it launched campaign ‘Deal or No Dealer’, which touts the value of Halfords’ services versus those in dealerships. The campaign cites research claiming motorists who use car manufacturers’ franchised dealerships can pay over 50% more for repairs versus using independent garages and chains like Halfords.