How loyalty programs can deliver the savings shoppers want: Report
The rising cost of food is undoubtedly affecting shoppers’ behaviours, whether they’re switching to private-label brands or cutting back on pricy meats. A new report from Eagle Eye, a global digital marketing technology company, suggests grocery retailers can leverage their loyalty programs to better engage their customers – and deliver the savings they crave.
The report, Grocery’s Great Loyalty Opportunity, is based on a survey of more than 1,300 consumers and nearly 200 loyalty program managers in North America, Asia, Australia and the United Kingdom.
The survey found that saving at the shelf is a top priority for consumers. Nearly two-thirds of grocery shoppers (64%) are buying more items on sale or special; 57% are using loyalty program points, discounts or savings, and 48% are finding and using coupons more often. Other ways shoppers are trying to save money are shopping among different retailers to find the best price on certain items (46%), shopping more at discount stores (46%), buying more private-label items (42%), and finding ways to make meals that eliminate food waste (31%).
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On the loyalty front, the survey found more than two-thirds of all global respondents (68%) belong to at least one grocery loyalty program. The top benefit members want from a loyalty program is value (69%) followed by discounts (60%).
“This is an uncertain environment for retailers, but consumers are also primed to appreciate the value of loyalty," said Tim Mason, CEO of Eagle Eye, in a press release. "Grocery retailers are uniquely positioned to use their loyalty programs to deliver the savings their customers demand and the experiences they've come to expect.”
In many cases, grocers are responding. More than half of loyalty program managers (54%) report that in the next three to six months, they plan to make it easier to earn and redeem points. In addition, 48% plan to deliver relevant offers, coupons and discounts when customers are shopping; and 41% plan to make discounts and specials easier to find online and in stores.
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Still, the report shows there are big opportunities for grocers to level up their loyalty programs.
Eighty-four percent of consumers believe receiving more personalized recommendations would help them save money. In addition, 71% said if they got a real-time alert about a promotion while in store, they would either consider buying it or consider the information helpful. Fifteen percent said they wouldn’t think anything of it, and 14% think it’s creepy.
The report also identifies gamification in loyalty programs as an opportunity. Two-thirds of consumers would (or already do) participate in games, contests or challenges through a loyalty program or app. The appeal skews young, with 80% of millennials, 74% of gen zers and 68% of gen xers saying they’re willing to participate in games and challenges, compared to 48% of baby boomers.
The top three reasons consumers are game are: to save money (77%), to earn rewards that can be redeemed in the future (74%), and to win prizes (72%).
Retailers, though, are less on board. Less than a quarter (21%) of companies polled think gamifying the shopping experience is what consumers respond to most, and they ranked gamification last in perceived importance to consumers. Only 23% plan to introduce gamification elements into their loyalty programs in the next three to six months.
The full report can be downloaded here.
