All Articles Food Food Retail A question of loyalty: How grocers can up their game

A question of loyalty: How grocers can up their game

Grocery loyalty programs are changing as quickly as the industry. Learn more about what makes a good program and what can grocers do to ensure their customers keep coming back.

4 min read

Food Retail



Grocery retail is changing rapidly, and customer expectations around loyalty are changing along with it. What do today’s consumers expect out of loyalty programs, and what can retailers do to make sure they’re offering a superior program?

Putting the customer first

Providing an exceptional customer experience is paramount in today’s competitive grocery landscape, and loyalty programs are a big piece of that puzzle, says Randy Evins, senior principal and industry advisor for food, drug and convenience at SAP. One problem for grocers, though, is that they have historically utilized programs that focus on their business or product movement instead of what consumers actually want.

“Grocers are now shifting their mindset to think about how each consumer will benefit from the program [and] creating valuable interactions in their overall relationship with the brand, rather than simply focusing on the benefit to the store,” Evins says.

Raj Nijjer, vice president of marketing at Yotpo, also believes a focus on the customer is extremely important in order to build a successful program. According to Nijjer, “personalization greatly depends on developing a deeper understanding of customers” and “understanding engagement at every level is essential for personalizing your loyalty program and ensuring long-term customer relationships.”

Target, for example, recently expanded its Target Circle loyalty program, which builds on the idea of increasing customer engagement while also offering the retailer a way to collect more data to personalize the shopping experience. As a nod to its customers, Target is giving them 1% of each purchase to redeem later and allowing them to vote on where its charitable donations should be directed.

Utilizing data to complete the equation

While enacting a successful customer loyalty program can seem like a daunting task, Evins says the potential for repeat business makes it worth pursuing. Leveraging data to better understand consumers and to create a unique experience for repeat shoppers can be key to getting it right.

“With the right data, grocers can build dynamic profiles of consumers to gain deep insights and adapt to both consumers’ needs and shifting market trends,” Evins explains. “Brands can deliver personalized experiences in real-time, increasing conversion rates and gaining loyalty, while reacting to each consumer’s context in real-time to make sure the communications are targeted and relevant.”

Brookshire Grocery Company, for example, is utilizing SAP’s technology to gather customer information that helps the company create a unique omnichannel experience. The technology enables Brookshire to delve deeper into who each customer is, learn about their purchase history and communicate in real-time to offer personalized promotions that are automatically loaded to an app or loyalty card.

“By gaining a deeper understanding of shopper behavior, history and needs, Brookshire Grocery has more quickly and proactively adjusted to demand, and has increased sales and consumer satisfaction,” Evins says.

The winning formula

As Nijjer explains, there’s no one-size-fits-all or set-it-and-forget-it method for getting loyalty programs right anymore. A deeper look at the customer and how retailers can provide a unique experience is more crucial than ever.

Indeed, loyalty should extend beyond the standard and be more about creating a conversation with consumers while rewarding them personally for their loyalty. “The old process of extending a generic promotion to a loyalty card holder that’s no different than the flyer just doesn’t deliver on the promise,” Evins explains.

Today’s loyalty programs are less about stores themselves and more about creating experiential rewards such as a heads up on in-store events, tailored offers or loyalty points for sharing social points, Evins says.

Related stories:


If you enjoyed this article, sign up for FMI dailyLead to get news like this in your inbox, or check out all of SmartBrief’s food and travel newsletters, as we offer more than 30 newsletters covering the food and travel industries from restaurants, food retail and food manufacturing to business travel, the airline and hotel industries and gaming.