Loyalty programs have long been a major strategy in drawing consumers to one retailer rather than another.
However, while growth of loyalty program membership has continued — reaching 3.8 billion — this year’s edition of Colloquy’s Loyalty Census shows that it has dropped 11 points, to 15 percent, since the 2015 edition. Grocery program memberships have contributed to this, dropping to 142 million, from 188 million in 2015.
While the findings, presented by Toronto-based loyalty program and analytics firm LoyaltyOne, show that the 24 percent decrease in grocery program memberships is due, in part, to many mergers and acquisitions in the sector, it also reveals a need for grocers to continue to offer enticing reasons for consumers to become members.
For grocers in 2017, personalized incentives — digital offers and deals, relevant digital ads — are a powerful way to appeal to shoppers, drive sales and build loyalty, says Mir Aamir, president and CEO of Mountain View, Calif.-based digital promotions provider Quotient.
“The reason is simple: Shoppers love digital offers and deals, either in the form of discounts on products they buy, or in terms of rewards like points, if a retailer has such a program,” Aamir notes. “The key is to make all such incentives relevant and easy to use. If a deal or offer is personalized, shoppers love it. In fact, shoppers have come to expect personalization.”
Grocers have a number of ways to personalize programs, and different demographics have different ways that they want to enjoy incentives. Some of the ways grocers could better personalize loyalty program incentives to customers include:
- Creating ease of participation: It should be easy to take part and simple to redeem, says Therese McEndree, VP of marketing with Hawk Incentives, a subsidiary of Pleasanton, Calif.-based Blackhawk Network Holdings. Also, the benefits must be clearly and consistently communicated. One grocer that does this is Food City, a subsidiary of Abingdon, Va.-based K-VA-T Food Stores that rewards shoppers based on the amount they spend at its stores, according to David Bishop, partner with Barrington, Ill.-based retail consultancy Brick Meets Click. Customers at the grocer earn a 5 percent-off reward that they can use on future purchases after spending $300 at the retailer. Bishop notes that the program is personalized to shoppers by way of spending patterns affecting how quickly the reward is earned.
- Linking loyalty cards to online shopping: Strong value comes from enhancing both the in-store and online shopping experiences with proper personalized incentives, David Bishop observes. West Sacramento, Calif.-based Raley’s does this by allowing shoppers to build online carts and lists based not only on past online purchases, but also past in-store ones. Doing so has removed friction and enabled a more seamless and continuous experience with the grocer.
- Offering variety: Consumers today want to choose their reward and how it’s delivered, whether loyalty points, a physical gift card, emailed promotions, rebates, or even a reward transferred to a mobile wallet, McEndree says. While consumer preference varies widely by application, value and demographic, offering the right reward options for each creates added opportunities for positive brand engagement, bounceback and continued engagement.
- Providing rapid rewards: According to research from Hawk Incentives, respondents ideally want their reward delivered in less than a week. Innovations in technology now offer near-instant rewards, allowing shoppers to redeem easily, sometimes with as little as a few swipes on a mobile device, McEndree stresses.