Some Mecca customers have been left disappointed with its loyalty programme. (File photo) Photo: Unsplash / Allison Saeng
Cosmetics retailer Mecca is likely to be able to shake off any ill will created by customers disappointed with its loyalty programme and discounting, experts say.
Newsroom reported Mecca was apologising to customers after they were sold products up to a decade old during Boxing Day sales, and an "extra beauty treat" for people who reached a certain level of spending turned out to be a tote bag that transferred dye on to some people's clothes.
Gemma Rasmussen, spokesperson for Consumer NZ, told RNZ's The Panel she would not consider a tote bag to be a beauty treat.
"We think Mecca has potentially been a bit misleading and could have breached the Fair Trading Act as well," she said.
She said Mecca shoppers tended to be "pretty dedicated". "If you get an email saying spend more, a treat is coming, it's hooking people in and pretty deceptive marketing."
Bodo Lang, a marketing expert at Massey University, said reward schemes like Mecca's could be a powerful driver of customer acquisition and long-term loyalty.
"Which is why so many major retailers invest heavily in them. Think Air New Zealand Airpoints, AA Smartfuel, or loyalty programmes from banks, credit card providers, New Zealand grocery retailers. Even local shops use them to secure a greater share of wallet.
"But when a rewards programme delivers a disappointing experience, especially one that violates basic consumer expectations, such as offering products manufactured more than a decade ago, it can harm brand trust and make shoppers think twice about returning. Trust is hard to build and easy to lose."
But retail consultant Chris Wilkinson, of First Retail Group, said Mecca's scheme was strong.
"Mecca's scheme is a big draw for customers and the brand is well known and enjoyed for its rewards and giveaways - particularly younger consumers who are entering the world of cosmetics and fragrances.
"These schemes, like Farmers Beauty Club, are popular - especially as these products are expensive so any potential saving or 'value add' are sought after and often the tipping point in terms of making a purchase.
"Mecca's scheme introduces new products and playfully encourages its customers to experiment with their beauty regimes - reflective of its predominantly younger audience."
Wilkinson said its success was noticeable with an expansion of store numbers.
"In all other world markets category leader Sephora 'owns' this space, whereas in Australasia, Mecca dominates and Sephora has been retreating."
He said the value of free gifts in the sector had been a contentious issue for a while.
"However the brand does have some pretty strong goodwill and a store experience that continues to evolve and engage - new stores, new products and 'hot' brands like Charlotte Tilbury, so I don't think goodwill will too badly affected - maybe only till the next 'freebie' message arrives in customers inboxes."
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