People don’t have preferred and primary grocery store retailer anymore.
If you look at how tech savvy (and dependent) consumers are today, the grocery shopping experience has become a very different process. For one, consumers don’t just write out grocery shopping lists on a notepad and stick it on our refrigerators. And most shoppers certainly don’t just rely on pulling out their scissors to cut out special coupons and deals from their local newspaper. Most consumers today download dozens of utility and lifestyle apps that make their grocery shopping experience easier, faster and, best of all, more productive and easier on their wallets.
Food shopping is going through a major shift. In fact, the Food Marketing Institute found that 9 percent of grocery shoppers in 2014 didn’t have a primary store. But despite unique challenges supermarkets are winning the mobile loyalty battle and they have a lot to teach other retailers. Here’s how.
Grocery mobile apps bring personalized shopping to life.
According to the National Grocers Association and Supermarket Guru, nearly 37 percent of shoppers have downloaded either a food or beverage app. If consumers spend so much time with their eyes glued to these apps, supermarkets better be prepared – and willing – to create one-to-one conversations that say, “Hey, I’ve got an offer that you need and you can use it at the local supermarket near you right now.”
Bill Bishop, chief architect of Brick Meets Click, predicts that food retailers will combine the one-on-one experience of loyalty programs with 24/7 access and functionality creates “personalized food portals.” To put it in his words, “Customers will use the portals to customize food shopping around their unique combination of needs and preferences – time, nutrition, budget constraints, etc. – enabling them to manage their purchasing more confidently,” he wrote in Supermarket News. “Customers will be able to ‘do more of what they want to do’ without having to spend the extra time and effort and so [will] concentrate more of their food purchases with one retailer.”
Loyalty data works harder for grocers – and increases consumers’ basket size.
“Data needs to be contextualized around an individual shopper – through a loyalty scheme or from ePos records by marrying it up with their activities on social media – to create a real, valuable picture of their purchase paths,” IPM managing director Jodie Hopperton says. “Look at what they love and share, and build your rewards offering around that core understanding.” And I wholeheartedly agree.
Let’s look at what Walgreens is doing to excel in this area. Their loyalty app serves up offers that are relevant to the interests and needs of their loyal shoppers – whether they’re loyal to their local Walgreens store near their office or use the Walgreens.com website religiously to find weekly discounts and deals. They offer consumers 250 points for connecting to their Healthy Choices program, then more points for using it to monitor blood pressure, weight and glucose levels. It’s a highly personal experience that rewards participants based on their individual needs and engagement behavior.
Loyalty program data helps retailers decide what programs to continue, what products to stock, what coupons to offer, among many other things. But with mobile loyalty programs, brick-and-mortar stores can actually take that data to extrapolate predictive behavioral patterns down – in turn, allowing them to be more efficient with media plans, campaign execution and inventory management.
Mobile solves shoppers’ dilemmas before they walk in-store.
Brian Numainville of the Retail Feedback Group says that 56 percent of shoppers purchase “supermarket-type items” online because they’re hard to find in-store. Does this seem implausible? Does this mean grocery shoppers will stop heading into physical stores? No. It just means that retailers have to stop putting all their loyalty eggs into one basket – whether it’s the brick-and-mortar store or online or mobile or social. And there are some retailers that are already ahead of the curve.
Target’s app, for example, tells shoppers who have created a grocery list if their items are available in one of its thousands of local stores across the country. And the StoreMode platform has created similar functionality for Meijer. The consumer data from these apps then lets these retailers use predictive analytics to personalize the messages, content and ads served up to shoppers tailored very specifically to the local products, brands and prices available.
Now mobile loyalty apps and programs can serve up-to-date store inventory alongside maps of where to actually find those items inside actual stores. And if you do the math, this is far more convenient than waiting three or four days for Amazon to deliver that much-needed supply of bathroom tissues and cold medicine.
Mobile loyalty programs narrow reach to niche customer segments
Mobile loyalty is great for reaching existing customers, but as all retailers know, reaching new consumer groups is also important to the health of any retailer or brand. A LoyaltyOne survey found that African-American, Asian and Hispanic shoppers, who often go to multiple establishments in search of desired foods, present an “enormous” opportunity for grocers who can reach them with loyalty programs and streamline their shopping experience — that is, by saving them time and money.
Using mobile loyalty offers to connect with existing and new audiences is ultimately better for any business. And in a market where there is tough competition and new alternatives to pushing a cart through store aisles almost every day, grocers are leading the way with their innovative approaches to digital loyalty programming. By tying their programs to both brick-and-mortar and mobile, their leading the charge and other retailers should model their example.