Holistic Supermarket Loyalty Programs Can Deliver Differentiated Growth

Survey results previewed by Food Marketing Institute (FMI) and analytics firm Precima at the FMI Midwinter Executive Conference showed that although four out of five shoppers rated loyalty toward their primary grocery store quite highly, the reality was actually more complex based on consumer behavior.

For instance, three out of five shoppers would shop at one store if they could have all their needs satisfied, 19 percent usually shop at only one store each week, and only 7 percent allocate more than 90 percent of their weekly grocery budget to their primary store.

“Food retailers need to take a more holistic approach to loyalty than simply viewing it as the domain of the loyalty team,” advised Graeme McVie, chief business development officer at Toronto-based Precima, who will lead a Jan. 28 session, “Next-Generation Loyalty: Get it Right in Food Retailing,” at the conference, which takes place Jan. 26-29 at the National Doral Miami.

Added McVie, “Retailers will find success in looking at loyalty in 3D by strategically allocating resources to earn customer loyalty, by enabling daily decisions to be made that consistently satisfy shopper needs, and by delivering a meaningfully differentiated value proposition to shoppers through their loyalty programs.”

Findings of the survey of 3,000-plus shoppers and dozens of FMI member retailers include the following recommendations for grocers:

• Think of loyalty as a comprehensive strategy based on insights gleaned directly from shoppers.
• Consider loyalty as the outcome of daily decisions across pricing, promotions, assortment, space, marketing and store operations.
• Go beyond a two-tier price discount loyalty program to provide differentiated value to shoppers.

“The research confirms that shopper loyalty is not a traded commodity and needs to be earned through personalized experiences,” said Pat Walsh, SVP for industry relations at Arlington, Va.-based FMI. “The good news is that food retailers are identifying ways to effectively compete in this new omnichannel environment, focusing as much on the fresh categories as the company dedicates to its online presence and ecommerce offerings.”