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Let’s start with what we know when it comes to the grocery industry – in the U.S. alone, grocery store sales are projected to grow to over $800 billion by 2018. The grocery industry continues to prove the fact that it lives in an increasingly crowded space – where consumer brand loyalty gets sliced and diced at every turn. We also know online grocery options are making a huge surge – sales of groceries grew by 15 percent during the past year and account for 4.4 percent of the market, according to Kantar Worldpanel. And, with Amazon’s recent announcement to launch convenience stores that sell perishable goods, as well as offer drive-in pick-up locations for grocery orders – it’s really anyone’s ballgame. The winner of the grocery game will be the one who wants it more, and who will be willing to make the necessary, and sometimes out of the box, adjustments to capture shoppers’ brand loyalty.
Shoppers today, especially those that fall in the Millennial and Centennial generations, are not so easily won over through short-term tactics like discounts and limited reward programs masquerading as attempts to build brand loyalty. Shoppers want to be treated like special, individual snowflakes – and why shouldn’t they? I’m a consumer, too, and I like to feel valued and appreciated every time I shop at my local grocery store. All shoppers have their own “stories” that make up their shopping behaviors and preferences, but how do grocery retailers begin to peel back the layers of their customers to build meaningful relationships that result in lasting loyalty?
Understand Shopper Demographics
To help determine what shoppers want, a good place to start is by identifying the high-level purchasing habits of different generations. A 60-something Baby Boomer most likely does not have the same shopping preference as a 20-something Millennial. Baby Boomers, for example, prefer one-to-one interactions with retailers and are more likely to purchase if they have a coupon or loyalty discount. Centennials shoppers, on the other hand, are born as digital natives and prefer to conduct most of their research online, but are more likely to buy a product at the nearest brick-and-mortar store location. Understanding the buying habits of different generations will help grocery retailers hone their marketing plans to best influence the different demographics.
Step Up Loyalty Programs in the Store
The ultimate goals of loyalty programs are to generate goodwill with existing customers, entice customers to spend more money to increase awards, and if done right, improve a company’s insight into the spending habits of the customer. But what good is a loyalty program if it takes on a blanketed approach, and doesn’t offer personalized offers to the customers it was intended to reach in the first place? The savviest of grocery retailers are those using, for example, located based marketing programs and BLE enabled ESLs to send targeted, location and contextual offers directly to shoppers’ phones. These tools also allow grocery retailers to use location-based data to understand shoppers’ preferences, dwell times, movement through the store and more – making a loyalty program much more effective. Enticing shoppers to join a loyalty program is one thing. The key to keeping them on board is to provide a personalized and rewarding experience that shoppers historically enjoy online, in the store.
Make the Store Experience Relevant and Memorable
Global customer agency, C Space, recently conducted a survey on consumer loyalty in grocery, with a leading neighborhood grocery retail chain coming out on top. Why? Because the grocer knows how to excite its shoppers and make them feel valued in the store. Customers from the survey indicated the grocery retailer’s responsive customer service, the fact that everything is expertly and colorfully labeled, as well as items always being in stock. The survey also indicated the grocery has even the smallest of shoppers in mind – providing games and samples for kids in the store.
Technology can also play a pivotal role in keeping customers coming back to the brick and mortar store. By harnessing the power of smartphones, grocery retailers can greet shoppers as they enter the store or send store associate assistance via a “help” button on a grocer’s mobile app. Through the use of electronic shelf labels, grocery retailers can also make ratings and reviews available to shoppers, as well as critical information about where food was sourced or potential food allergens.
According to Charles Trevail, CEO of C Space, securing brand loyalty in grocery means going the distance, beyond what is just expected. “The ones that are positioned for long-term growth are those retailers that are partnering with and drawing inspiration from their customers, delivering products and experiences that align and evolve with their values and priorities.”
The grocery industry is on the cusp of major change. Who will the winners be? Time will tell, but if history has taught us anything, it will be those who are not afraid to transform the store experience through sheer innovation and ingenuity.