Loyalty and shopping

Yes, customer loyalty is essential for any business, and a grocery business has a particularly good basis for benefitting from a customer loyalty program. On top of this, a grocery chain has a unique platform for combining loyalty facilities with shopping tools that optimises the buying processes. Offering loyalty app benefits and digital shopping tools in one and the same application is a powerful combination that increases the relevance for the customer. In a competitive and crowded grocery industry, loyalty facilities and shopping tools are a perfect mix to secure customer retention, optimise efficiency in the shop, and increase sales. Let us first examine why a grocery chain has such a good basis for offering both a customer loyalty program as well as digital shopping self-service tools.

Combining customer loyalty program and shopping tools

A grocery chain has a particularly good basis for having a customer loyalty program for especially these reasons:

1. High frequency visit: People need groceries regularly and visit grocery stores frequently. Customers are, therefore, always in the market for good offers and benefits, which gives a perfect platform for frequent digital dialogue and interaction.
2. Many products in store: Grocery stores offer a wide variety of products, from fresh products to household essentials. By offering a loyalty program, grocery stores can encourage customers to try new products and thereby increase basket size.
3. Easy segmentation: Grocery shopping is often based on personal preferences, such as preferred brands and shopping habits. A loyalty program can track behaviour and needs of an individual customer and based on this tailor promotions and benefits.

Illustration: Optimal basis for a loyalty program

A grocery chain also has an optimal platform for using self-service shopping tools and here are the main reasons:

1. Requesting convenience: Customers often have limited time to shop for groceries. Digital shopping click & collect or home delivery allow customers to save time by avoiding the need to navigate the store and wait in checkout lines.
2. Low involvement products: The products are of a type where the purchase decision is made within seconds. Facilities like scan the price and see nutrition information reduce the barriers for the customer to decide to buy them.
3. Low need for contact: The product types means that there is less need for interaction with shop personnel during decision making and actual purchase. This gives a good basis for using self-service tools like mobile scan & go and instore routing.

Illustration: Optimal basis for self-service tools

Competitive advantages with a comprehensive customer app

The grocery industry is highly competitive, with many stores offering similar products at similar prices. As the retailer has an optimal basis for both introducing a digital loyalty program and shopping tools, the effect of the customer app increases significantly if the two are combined.

Illustration: Combining loyalty and tools

A comprehensive customer app helps the retailer differentiate itself from competitors and thereby retain customers as well as reducing the need for labour-intensive activities. In the following two sections, examples of digital loyalty facilities and shopping tools relevant for a grocery chain will be given.

Relevant digital loyalty facilities

This section will touch on some of the relevant loyalty features for a grocery business. At first glance, they might seem trivial, but they simply just work! Combined with digital shopping tools, they will form a powerful customer app. Example of relevant digital loyalty facilities for the retailer:

1. Discount coupons: A classic loyalty feature that offers an attractive, discounted price on a specific product. Coupons can be for all customers if having a broad appeal or can be targeted specific customers if more narrow appeal.
2. Vouchers: Another classic feature that can include free products for high tiered loyalty members or, more typically, a cash amount to spend on a given product category. It is as coupons highly effective in attracting the customer to the shop.
3. Personalised offers: Personal offers tailored to the individual customer and his shopping habits. By analysing a customer’s purchase history, the retailer can create fully personalised offers with high relevance, especially if fuelled by an advanced CDP tool.
4. Rewards: Rewards for reaching specific purchase milestones, such as spending a certain amount or buying specific items. Rewards can include discounts or free products. Earning points is often not interesting for grocery chains due to low margin on products.
5. Stamp Cards: Customers can earn stamps for purchases and receive rewards, like next for free, once they reach a specific number of stamps. This type of loyalty program is simple but effective and can encourage customers to keep coming back.

For more inspiration, you can read about the Sprinting Loyalty product.

Relevant digital self-service shopping tools

This section will list some of the highly valuable self-service shopping facilities that will complete the customer app. Together with loyalty facilities, it will create a digital universe that will make the retailer stand out from competition. Example of relevant digital self-service shopping facilities for the retailer:

1. Scan & go: Allowing the customer to scan products, get prices calculated on the fly, and paying directly on the mobile phone. The customer can skip the line and the shop personnel will save time.
2. Scan the price: A scan the price feature gives the customers access to checking the price of a product if in doubt. This will reduce hesitation and increase the likelihood of the product actually being bought.
3. Reduce food waste: Show the customer products in stores that are soon to expire and, therefore, are heavily discounted. By this, the customer and the grocery chain can jointly help prevent waste of food, and by this protect the environment while saving money.
4. Return of goods: Allowing customers to take pictures of perished goods just bought, like a rotten orange. The customer receives money back vouchers that can be spent on the next purchase. This builds trust and satisfaction.
5. In-store navigation: Providing in-store navigation through the app to the shelf where a given product is located. This feature can help customers find products more easily and reduce the time spent wandering the aisles.

Summary and Conclusion

In conclusion, a loyalty app is an essential tool for any grocery chain looking to increase customer loyalty and retention. To create a successful loyalty app that stands out from competition, it is essential to offer more than just the basic loyalty features. The app should also include practical shopping tools that make the customer’s shopping experience more convenient and efficient. By this, the retailer not only provides an engaging shopping experience, it also creates a direct link between loyalty and the buying of products. The customer app will give a competitive edge to the retailer, and will increase customer retention, shopping frequency, revenue, and earnings. The best part is that it benefits both the customer and the retailer.