In the grocery industry, loyalty is a must. Retaining customers is cheaper and delivers a higher ROI than acquiring new ones.
Unlike punch cards, which require you to physically give each customer a tag and have them scanned every time they buy, next-gen food loyalty programs are omnichannel and personalized.
Point and Reward Mechanics
The grocery industry is competitive with low margins, but hypermarkets can lure customers by offering personalized loyalty rewards and in-store services like store pickup and online ordering. To boost engagement, grocers should choose loyalty programs with simple point and reward mechanics that make it easy for customers to understand their benefits.
A monetary value assigned to earned points helps customers see the tangible value of their purchases and encourages them to keep shopping with a brand. For instance, credit card companies excel at this by highlighting the amount of cashback a customer can earn in exchange for purchasing products.
Grocery stores can also introduce gamification elements into their loyalty programs to help build brand affinity. This can be done by offering bonus points or additional discounts for engaging activities like social media posts, QR code scans, reviews and feedback, etc. By leveraging a loyalty program platform, they can easily manage these gamification tactics and other features such as targeted promotions, member segmentation, and more.
Grocers can send exclusive promotions and other loyalty program information that adds value by identifying the best channels to communicate with customers, such as TikTok for a younger audience or LinkedIn for older adults. This ensures that customers remain engaged and increases the likelihood of them converting. Using a loyalty program platform, they can automatically send reminders about point expiry and status, collect customer feedback, and more.
Integration with an App
Choosing the best grocery loyalty programs provides customers a holistic experience across multiple channels and store locations. This includes tracking purchases online and in-store, offering vouchers that can be used anywhere, and delivering instant rewards at checkout.
A vital aspect of this is integration with an app that enables customers to check their balances, track the status of rewards, and make redemption easier. This feature also provides valuable customer data by showing what offers and recommendations are most relevant to a given individual.
As a result, shoppers are more likely to engage with a grocery loyalty program when they can redeem their earned rewards on the go. This gives the impression that the brand understands their shopping behavior and offers them a more personalized shopping experience.
Moreover, the ability to offer immediate rewards at checkout reinforces the loyalty program’s value and encourages customers to return for future purchases. It also helps supermarkets stand out from competitors and attract new customers.
The most successful grocery and hypermarket loyalty programs deliver on the critical priorities of personalization, digital integration, immediate rewards, cross-brand synergy, philanthropy, diverse partnerships, and simplicity. These programs can help supermarkets compete against massive tech-driven retailers and win more market share in a challenging retail environment. For example, a food delivery service can offer customers a free meal coupon or a stylish coffee mug when they sign up for their loyalty program.
Grocery and food & beverage companies are in a constant battle for customer retention. They can reward loyalty points for frequency and order volume, graduate customers based on their buying history, and add an element of gamification by letting them earn rewards like free products or exclusive discounts. However, most of these programs need a deeper level of personalization that makes the offers feel less like a one-size-fits-all promotion and more tailored to the customer.
To move the needle on any of these KPIs, next-gen grocery and hypermarket loyalty programs need to leverage customer data to deliver personalized offers that create a differentiated experience. To do this, they need a single unified token that recognizes shoppers regardless of the global payment types, brands, channels, or devices customers use. This is the only way to ensure that all customer data needed for personalization can be captured and delivered at scale.
A few leading grocers are using their loyalty programs to do just that. A program has a digital-first approach and adapts to each shopper’s shopping habits over time. In addition to offering personalized deals, the program rewards check-ins and provides rewards for sharing or liking social media posts. This level of personalization makes the program more valuable for shoppers and ensures that it stays relevant.
A key to loyalty success is rewarding customers for their referrals. This is an effective strategy to move the needle on several KPIs simultaneously. It incentivizes repeat purchases, encourages new customer acquisition, and boosts brand advocacy.
Cashback programs are a popular form of grocery store loyalty rewards. They are similar to points programs, but instead of accumulating loyalty tiers and earning free products, members receive “cash” or coupons that can only be used at the retailer. These rewards are more universally appealing and less time-consuming than collecting and redeeming loyalty tiers.
Another way to boost loyalty is through targeted promotions. Use loyalty data to send personalized offers based on a customer’s preferences and transaction history. For example, use it to automatically curate an online grocery cart containing their most frequented items and top-rated brands or to offer recommendations for out-of-stock items.
Finally, many grocers make the mistake of binding loyalty benefits to their store-issued credit card, which limits the program’s reach and alienates valuable customers who don’t want a credit card. To overcome this challenge, grocers can offer incentives for non-credit card holders, launch time-limited offers like double-points days, or give customers discounts on their next purchase that are worth more than the value of their current investment.