Nearly six months after announcing the end of its nearly 24-year association with LoyaltyOne’s Air Miles loyalty program, the LCBO has announced a new multi-year partnership with its biggest competitor, Air Canada-owned Aeroplan. The partnership is expected to debut later this year.
“[W]e will provide rewarding and personalized offerings to our customers that enhance their experience,” said the LCBO’s president and CEO George Soleas in a release about the new partnership. “It will also provide an important engagement opportunity for our valued suppliers, including Ontario producers, and make it even easier for shoppers to find the perfect choice for every occasion.”
When the LCBO announced that it was terminating its agreement with Air Miles in February, industry observers predicted that the liquor retailer might opt to create its own program, noting that the back-end systems required to run such programs have become more affordable, and that other retailers have taken a similar approach in the past.
Rexall announced in September that it was dropping Air Miles to create its own loyalty program, while Lowe’s, Rona and Reno-Dépôt announced they were leaving Air Miles in January (Rona had signed a multi-year renewal with the company in 2014).
Air Canada relaunched Aeroplan in 2020, saying it had listened to feedback from its 36,000 customers and benchmarked against other loyalty and frequent flyer programs around the world to deliver what it described as “among the best travel loyalty programs in the world.”
“When we relaunched Aeroplan last year, we made a commitment to earn our way into consumers’ everyday lives,” said Mark Nasr, senior vice-president, products, marketing and ecommerce at Air Canada of the partnership with the LCBO. “Marquee partnerships like the LCBO and other industry-leading, well-loved brands are central to delivering on that promise.”
The loyalty focused blog Rewards Canada said that Aeroplan has been selective in choosing non-travel partners, but recent partnerships with retail partners such as the LCBO and Starbucks, hints towards a return of its coalition model in which its approximately five million members earn a common currency across multiple brands. “By partnering with well-known retailers like Starbucks and LCBO, they are providing merchants they know a good proportion of their membership base will use,” said Rewards Canada.
On an information page for its trade partners, the LCBO said that the Aeroplan program offers a cost-effective way to engage customers through bonus points that are capable of driving sales and, starting in 2022, “expanded promotional offerings.” “For the first phase of the program, these bonus point offers are limited to single SKUs,” it said. ” In the future there will be expanded bonus offers available.”
The program will launch in the LCBO’s brick-and-mortar stores to start, with online channels to follow at a date TBD. According to the LCBO, Aeroplan has more than 2 million members 19 and older, with 91% of its Ontario members living within five kilometres of one of its retail locations.
The LCBO is planning a webinar to provide additional details about the program and future trade opportunities.
The new partnership will see participating LCBO customers earn one Aeroplan point for every $4 spent at the LCBO, with bonus points for purchasing select LCBO products. Points can be redeemed for travel—including flights, hotels and car—as well as merchandise including LCBO gift cards (starting at 1,000 Aeroplan points for a $10 card).
A 2020 report from McKinsey said loyalty programs had become reliant on “increasingly outdated rewards and the redemption strategies of the past.” So-called “earn and burn” programs, it said, are no longer enough to meet the demands of today’s dynamic consumers.
Air Canada had originally spun off Aeroplan as a wholly owned subsidiary in 2005, selling its remaining stake in the program for $349 million in 2008. The company was subsequently renamed Amia, which was acquired by Air Canada for $2.25 billion in 2018. Upon completing the acquisition of Amia in 2019, Air Canada said that it planned to launch its own loyalty program.