Release Date: 2006/09/26

Cape Town – Health and beauty retailer Clicks has introduced a branded credit card as an extension of its successful Clicks ClubCard loyalty programme.

David Kneale, chief executive of Clicks parent New Clicks Holdings, said a Clicks-branded credit card is a logical extension of the ClubCard programme. “We have adopted the approach of using existing loyalty to launch credit, as opposed to the spate of recent credit card launches where credit is being used to leverage customer loyalty.”

Clicks ClubCard shoppers are rewarded with points which are translated into “cash-back” vouchers which can be redeemed for any merchandise within Clicks.

Kneale said that over the past year alone Clicks has given back close to R100 million in cash-back vouchers. “Our customers understand the value of cash-back and the new credit card gives them the opportunity to maximise this benefit.”

Clicks ClubCard credit card holders will earn double points when using their credit cards for purchases at Clicks stores and ClubCard points for all other purchases.

“Basically we are now offering Clicks ClubCard benefits for shopping outside of Clicks. These points are then converted into Clicks ClubCard points and paid back in cash-back vouchers. As a Visa affiliate our credit card will be accepted by over 112 000 merchants throughout the country,” he said.

Clicks ClubCard has been operating for ten years and is one of South Africa’s most respected loyalty programmes, with more than two million active members. Over 70% of the Clicks turnover is generated from ClubCard members, highlighting the level of loyalty of the customer base.

The Clicks credit card will be issued under licence of FirstRand Bank Limited.

“Our decision to partner with FirstRand Bank is based on their extensive experience in managing large volume branded credit cards, their understanding of loyalty programmes and the fact that their technology can support the ClubCard points system,” said Michael Harvey, managing director of Clicks.

“The Clicks credit card will initially be targeted at existing ClubCard holders. Our strategy is to generate incremental turnover growth through the introduction of credit, while reinforcing customer loyalty. While the Clicks credit card does not replace the Clicks ClubCard, the same loyalty benefits and usability will be passed on to our credit card users.”

Harvey said extensive research had been undertaken by Clicks over the past six months to evaluate the most appropriate form of credit and to assess customer response.

“Clicks has seen a changing trend in consumer purchasing behaviour with a growth in credit card spend as a proportion of our sales. This has reinforced the decision to introduce a credit card to complement the existing ClubCard loyalty offering. Currently around 25% of Clicks sales are on credit cards.”

Jan Kleynhans, chief executive of FirstRand Bank Card division, said that over the past few months a number of new credit cards had been introduced. “Many of these cards promise to revolutionise the credit card market by addressing traditional revenue streams like offering free cards.

“Unfortunately most of these cards have failed to address one key component, namely real customer value. The Clicks offering provides cardholders with a tangible benefit in the form of real cash back, and not just marketing hype.”

Ends
Issued by Tier 1 Investor Relations on behalf of the Clicks Group
For further information kindly contact
Graeme Lillie, Tier 1 Investor Relations 021 702 3102 / 082 468 1507