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Grocers' marketing messages about shopper card programs tend to come with warm sentiments. "Use our card and we'll reward you (for shopping with us instead of our competitors)," they essentially say. However, new research from the Hartman Group shows that for all of their efforts, grocers aren't necessarily being rewarded with shopper loyalty.
Some consumers, with several years of familiarity and usage under their belts, are admitting that they feel held hostage by the very programs that are meant to earn their loyalty. In a new Hartman Group research Pulse Report, Reward or Ransom: Shopper Cards from a Consumer Perspective, we explore the notion of whether loyalty is indeed a byproduct of shopper card usage. Among the report's most compelling findings: Mere possession of a card doesn't necessarily translate into loyalty.
Dangling the carrot of "savings" as a fringe benefit of card usage is seen as a form of bribery that contributes to consumers' ambivalence toward supermarket card programs. In fact, we found that 66 percent of shoppers agree with the statement "I shouldn't be required to have a [grocery] card in order to get savings."
When asked to characterize various statements about whether the presence of a shopper card program made them more "loyal" to a grocer (in terms of their likelihood to shop a supermarket with a card program more often), shoppers are decidedly lukewarm. More than one-fourth (28 percent) of shoppers are "neutral/undecided" about whether "the fact that a store offers a shopper card makes me want to shop there more often than I otherwise would," while nearly equal numbers of shoppers agree (36 percent) as disagree (35 percent) with the statement.
Shopper attitudes toward their primary supermarket aren't at all influenced by whether the store offers consumers a shopper card program. Consumers aren't as loyal to a store as retailers would like to believe -- shoppers are more likely to be "loyal" to lower prices and savings.
Loyalty -- a feudal notion
Traditional marketers and researchers espouse the timeworn belief that consumer shopping behavior is largely a result of "what happens in the store." In fact, the Hartman Group's recent research regarding the trend toward occasion-based shopping patterns reveals that nothing could be further from the truth. Shopping is no longer just about restocking the pantry or the refrigerator. For most households, the majority of their shopping trips are always about accomplishing tasks related to various occasions.
Given the fact that consumers shop a wide variety of retail chains and channels, and possess multiple stores' shopper cards, loyalty is by definition dead -- if it ever really existed. The idea that a retailer can bind a consumer to its store by offering artificial incentives (as opposed to just selling products) flies in the face of consumers' natural inclination to satisfy their needs on their own terms. Retailers who present only "discount cards" (as some consumers call stores' proprietary card programs) are really just causing traffic delays for time-starved or task-oriented shoppers.
Loyalty to grocery stores doesn't stem from a store's shopper card program. When asked to define what "loyalty" means to them, shoppers characterized it as an almost bygone notion of allegiance to a grocery store, upended by Wal-Mart and the presence of competing stores that also offer shopper card programs. According to one shopper, loyalty means "a store that you have always shopped in." This same shopper regularly shops with multiple shopper cards at three separate grocers. As a testament to how the notion of allegiance to grocers has evolved with the appearance of Wal-Mart, consider this shopper's comment: "Why would Wal-Mart offer a card....their prices are already so low."
Shopper cards play a minor role (if any) in forging emotional connections between shoppers and "their" stores. How consumers regard their primary supermarket (where they shop most often) is virtually identical, regardless of whether a supermarket offers a shopper card. As illustrated in the chart on this page, fewer than half in both groups consider their primary grocery store as a "friend" or "partner." Underscoring the notion that shopper cards really have nothing to do with eliciting feelings of loyalty is the fact that more than half of consumers consider their primary supermarket as nothing more than a business.
Shopper cards are now a true commodity in terms of their pervasiveness in traditional supermarkets. Consumers display a resounding lack of enthusiasm with regard to what they expect from supermarket card programs. Beyond the mindset that shopper cards provide "discounts," consumers have a difficult time recalling or imagining any additional benefits. Although aware of other rewards or incentives, such as gasoline discounts, few consumers we interviewed admitted to having reached the shopping volume necessary to claim various card rewards beyond discounts. This may be due in part to the fact that consumers carry so many different cards with them.
The bottom line is that loyalty must be earned. Consumers reward retailers in return for receiving something much more than they expected. And, with expectations so low for card programs, it would seem that there are ample ways in which grocers can surprise and delight shoppers -- more than just discounts -- to make them feel special.
Laurie Demeritt is president and c.o.o. of the Hartman Group, a leading consulting and market research firm based in Bellevue, Wash. The Hartman Group specializes in the analysis and interpretation of consumer lifestyles, and how these lifestyles affect the purchase and use of food products and services. Its client base includes a number of Fortune 500 consumer packaged goods companies, pharmaceutical firms, and mass and natural food retailers. Laurie can be reached at [email protected].