12 Apr 2000

Egg announces tie up with Boots for Combined Loyalty and Credit Card

Prudential’s internet financial services company, egg, has teamed up with Boots The Chemists to launch a combined loyalty and credit card. Benefits will include low interest rates and Boots Advantage points wherever the card is used. Holders of the new card will have additional reasons to shop at Boots, use the Advantage Point Kiosks and visit Boots on the Internet.

Boots Advantage Card was launched in September 1997 using smart card technology and offering a 4p in the pound benefit to cardholders. There are now 12 million card holders of which 8.5 million are regular users. New applications are running at a rate of 40,000 each week. egg was launched in October 1998 with a range of mould breaking financial services products. In its 18 months since launch, it has built up a customer base of some 900,000. Over 250,000 of these are credit card holders, acquired since September 1999.

Boots and egg will work together to add low cost credit and ease and efficiency of on-line application and servicing to the existing benefits of the Advantage Card loyalty scheme. From September existing Boots loyalty card holders will be able to apply for an Advantage Credit Card which will serve both purposes. Key consumer features of the new credit card will be:

More points

  • purchases in Boots stores earn four points plus one additional point per pound spent.
  • one point per pound earned on all other transactions using the card.
  • extra one point per pound earned on transactions within the egg Shopping Zone.
Less plastic
  • a combined card with universal acceptability.
Low APR
  • 10.9% for Internet users; 14.9% for other users.

Card holders will collect the points they have earned through the Advantage Point Kiosks in Boots stores. Access to monthly statements for on-line users will be through the Boots Internet site.

Boots will retain operational management of the loyalty scheme and control all marketing communications. Card holders will be offered the chance to purchase other egg financial services.

The principal business benefits for Boots will be in:

  • Extending the consumer appeal of the Advantage Card.
  • Extending use of the card beyond Boots stores.
  • Strengthening customer loyalty through more points, more redemptions.
  • Increasing usage of Advantage Point Kiosks in Boots stores - driving footfall and transaction values.
  • Creating new opportunities for electronic marketing through existing Kiosks and the Internet.

Jonathan Bloomer, group chief executive of Prudential, said "This new alliance will build on the successful launch of the egg card and gives us the potential to accelerate our rate of customer acquisition significantly. This is a great deal for egg and for Boots".

Ken Piggott, managing director of Boots The Chemists said "Boots and egg are two powerful consumer brands. We have brought together the unique rewards of the Advantage Card loyalty scheme with an innovative, great value credit card. It adds up to a compelling consumer proposition. It is also the next step in our strategy of building up a range of channels through which we can talk to our customers and satisfy their individual needs".

Mike Harris, chief executive of egg, said "We are delighted to be announcing this deal with Boots. It is highly innovative, bringing together two brands which are leading in their fields to bring great value to Boots customers".

Enquiries to:

Francis Thomas
Group Media Relations Manager
The Boots Company PLC
Tel: 0836 660 700
Mobile: 07803 237 039

Jeremy Reynolds
Group Media Relations Manager
Prudential plc
Tel: 020 7548 3721

Keith Whitesides
Director of Investor Relations
The Boots Company PLC
Tel: 0115 968 7171

From 0700 to 1300 hours on 12.4.00 media calls to Boots and egg
Tel: 0171 374 2669

Boots The Chemists/egg Agreement

  • BTC will offer a combined credit and loyalty card based on the credit card issued by egg.
  • The new card will be issued by egg who will be responsible for all administration and operational costs, and credit risk/liability.
  • Commissions payable by egg to Boots will cover all costs arising from the operation of the scheme, including the cost of additional Advantage points.
  • egg will offer a range of products to Boots customers including mortgages, insurance and personal loans. All marketing communications will be controlled by Boots.
  • Boots will receive a payment from egg for any new customer taking out the combined credit card. Boots will also receive commission on other egg financial services bought through boots.co.uk
  • Financials Boots investment in the new credit card is £2 million in 2000/1, mainly on consumer marketing.
  • Boots Developments
  • Over the last three years Boots has extended its reach and improved customer communication by launching:

The Advantage Card

The Boots Advantage Card was launched in September 1997 using smart card technology. It now has 12 million card holders of which 8.5 million are regular users (i.e. have used in last 3 months). Applications are being received at the rate of 40,000 each week.

Advantage Point Kiosks

Boots introduced interactive Advantage Point Kiosks in 1999 and now has Kiosks in 370 stores. Customers place their Advantage Card into the machine which then generates tailored offers based on previous shopping patterns. Use of the Kiosks raises average transaction values and results in more frequent store visits.

Health & Beauty Magazine

The Health & Beauty magazine is published quarterly by BTC to Boots most valuable Advantage Card holders. The two million reader distribution makes 'Boots Health & Beauty' Britain's biggest circulation women's magazine.

boots.co.uk

Was launched in 1996 as an information site. In December 1999 the site went transactional offering 2,500 lines from Boots existing mail order catalogues. The inventory will expand significantly in 2000.

handbag.com

Was launched in October 1999 as a joint venture between The Boots Company and the Telegraph Group. It was the first complete UK Internet service designed and built to satisfy the on-line needs of British women. Since launch the site has been visited by 500,000 individual users who are staying on-line for approximately 10 minutes per visit.

Consumer Research

  • 83% of existing users rate the Advantage Card as 'good' or 'excellent'.
  • 83% of Advantage Card holders use a credit card.
  • Almost 80% of those interested in a Boots credit card said they would be more likely to apply for one if extra Advantage points were available.
  • Over 50% of credit card holders have applied for a new credit card in the last three years.
  • 45% of Advantage Card holders have access to the Internet (25% at home, 20% at work).

Source: Boots survey

Press Conference

Boots and egg will be holding a press conference at 1030 hours at The City Presentation Centre, 4 Chiswell St, London EC1Y 4UP. You are invited to send a representative.

Photocall

A photocall has been arranged for 0945 at the above venue. You are invited to send a photographer.

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