By Phil Anderson
"Fly Buys. The all new way to earn free air travel." Seductive marketing: simply by doing everyday things like shopping, buying fuel and using your credit cards you can earn free travel. So says the new colourful brochure. Something for nothing.
Just shop in the usual way with any of the companies that are part of the scheme. This will accumulate for you bonus Fly Buy points which can then be turned into free air travel with Qantas, Ansett or Air New Zealand. A frequent buyer reward scheme.
The program, launched on August 29, is yet another example of how large multinational companies can put small business out of business.
Take one of the companies involved, Shell. Reading the brochure fine print, Fly Buys is at participating Shell outlets only. The program is for Shell's top line petrol stations only, not the smaller service stations.
Most smaller stations are owned by the operators. Shell's director of downstream oil and chemicals (suggestive title), Russell Caplan, has been quoted as saying Shell's biggest sites are virtually all company-owned. "When we spend that much on a site, we want it to do a lot of business for us." He was quoted further, "We don't want it diluted by other outlets of our own".
Tough for the small operator.
Such schemes will lead inevitably to further concentration of ownership. No doubt for Coles Myer, another contributor to Fly Buys, purchases under the scheme will help with sales volume and push margins that little bit higher. (Not to mention drawing further purchases away from strip shopping centres.) Tough for small shop owners if other large chain stores hit back with their own competitive schemes.
That, it seems, is precisely what will happen next. Another large consortium has been formed, including the likes of ANZ, BP, Harvey World Travel and Pepsico, to challenge Fly Buys.
As for the banks, contributing in the scheme is the NAB. Over the last 10 years, there has been an increase in the number of banks, but the big few still dominate the market. This scheme may yet be another nail in the coffin of smaller financial intermediaries without a huge capital asset base to be part of such schemes.
What about any other underlying motives? The scheme's fine print is revealing. Point 3 of the abridged terms and conditions tells us we are agreeing to:
"Information concerning members, including information contained in the application form and information as to transactions resulting in points credits and debits will be held in a database for FLY BUYS and will be made available to agents involved in administering the FLY BUYS program including a telephone service centre, agents producing cards and points summaries and a data processing agent. Information from the database will also be made available to and used by FLY BUYS and participating retailers for marketing (direct and all other kinds), planning, product development, research and other commercial purposes."
In other words, a free lifetime supply of direct marketing promotions. Privacy invasion run amok. The 1.1 million households which have already joined — in only five weeks — have a lot of junk mail to look forward to. Have any of these persons considered that they might actually save more than the cost of an airfare simply by shopping around for the best price?
Something for nothing? Hardly. The big boys would have us believe they are expanding our horizons. In reality they are yet again limiting our opportunities.