In the face of ongoing inflation, consumers worldwide have continued their belt-tightening and cutting back on non-essential spending. According to our recent global consumer report, Grocery’s Great Loyalty Opportunity, they’re eating and drinking out less and ordering in at a much lower rate than a year ago. While grocery store sales have spiked, corresponding with the decline in out-of-home spending, the majority of consumers (61 percent) are also turning to various money-saving techniques to bring down their grocery bill. In the U.S., 53 percent are clipping coupons, 62 percent are buying items on sale, and 48 percent are shopping at discount stores.
To stay competitive and capitalize on sustained store traffic, grocers must focus on delivering both value and relevance to customers. Undifferentiated coupons and generalized discounting aren’t enough anymore. Personalized loyalty initiatives are key to providing value, relevance and generating long-term customer engagement.
Our survey also found that over two-thirds of consumers belong to at least one grocery loyalty program, and 76 percent have joined a new one or used their existing memberships more frequently in the past year. Just over half are turning to their grocery loyalty programs to access instant discounts, which is significantly more important than other benefits like earning points, miles, or other reward currencies. To truly leverage the potential of their loyalty programs, however, grocers must deliver meaningful value to individual shoppers, not broad segments of consumers.
To achieve this, retailers need to determine how they can personalize the end-to-end customer experience, making it easier and more rewarding for their customers to shop with them versus any of their competitors.
Food is Personal, Savings Should be Too
No single promotion will speak to every customer. That’s why offers delivered through loyalty technology that personalizes discounts and coupons have a much greater chance of resonating with customers. According to our survey, 60 percent of consumers say it’s important to receive offers from a store or a brand that are personalized to their needs. This figure skyrockets to nearly 90 percent for Millennials and Gen Z. Most consumers (84 percent) also believe that more personalized offers would help them save money when shopping. Yet, 31 percent of loyalty program professionals we polled in a concurrent survey said personalization is a significant challenge. Roughly half say it’s difficult to match the right offer to the right customer and to customize offers based on past purchasing behaviors. Integrated loyalty technology is the key to achieving this core capability; it’s also a vital component to what we believe is the next innovation in retail loyalty: marketing in the moment.
Putting Savings into Context
According to consumers queried in our survey, 56 percent want retailers to make it easier to find discounts, indicating that context-based marketing based on factors like the weather, time of day, and location can be very effective. For instance, a customer walking through the produce aisle could receive a push notification in real time with a coupon for broccoli, accompanied by a recipe to help them plan for their dinner that evening. Over 70 percent of survey respondents said if they got an alert about a promotion for a product while in-store, they would either consider buying it or find the information helpful. Another 36 percent of global consumers would find receiving offers on or before their regular shopping day very useful.
This tactic requires merging data harvested from an individual’s loyalty program profile with contextual data points to deliver personalized offers and messaging to an individual at the right time to influence a purchasing decision, meaning that the retailers’ marketing is significantly more relevant driving much greater loyalty program engagement.
Customers and grocery retailers are aligned on the need to present more value at the shelf. Retailers know that scalable, feature-rich loyalty program technology is key to delivering that value. Over 80 percent of the surveyed loyalty program professionals have either invested in loyalty program technology during 2022 or plan to do so in 2023, and 63 percent are seeking technology that supports multiple loyalty functions. With current macroeconomic factors driving more shoppers into grocery stores, customers are primed to be motivated by loyalty program initiatives that help them save on the essentials they want and need.
The author, Tim Mason, is CEO at Eagle Eye.