customer loyalty

Groceries Have Opportunities to Build Customer Loyalty

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Global consumers, feeling cautious in an uncertain economic climate, are going on fewer holidays and eating out less frequently, according to data analysis from Eagle Eye. This SaaS company powers real-time customer loyalty programs  and promotions for grocers and retailers in the U.S. and abroad.

In a report, “Grocery’s Great Loyalty Opportunity,” the findings suggest that grocery chains have an opportunity to boost customer loyalty programs amid inflation pressures. “Grocery retailers already have two core tools to help shopper save,” the report says. “Loyalty programs and promotions. But they must re-think how they use these tools to adapt to changing consumer behaviors.”

In response to the question, “What did you do less of in 2022?”

  • 58% of survey respondents said they were eating and drinking out less frequently.
  • 46% of respondents reported going on vacation less.
  • 45% percent said they ordered in food less.
  • 40% said they were buying gifts less.
  • 37% reported cutting back on overall shopping.
  • 26% said they shop online less.
  • 25% said they shop in-store less.

Eagle Eye surveyed more than 1,300 consumers and nearly 200 loyalty program managers in North America, Australia, Asia, and the U.K. and learned that personalized promotions, deeper discounts, and frictionless operation of loyalty programs. Opportunities are to be found in gamification to encourage shopper interaction with the grocery brand, and that data can inform personalization.

Tim Mason, CEO of Eagle Eye, said, “One of the most surprising findings for us was the disconnect between consumers’ desire and willingness to receive targeted promotions while they’re shopping and retailers’ plans to invest in the capabilities necessary to execute this kind of real-time, location-based marketing.”

He added that the report revealed that 71% of surveyed consumers said that if they got an alert about a promotion for a product while in the store—that is, in real-time—they would either consider buying it or would consider the information helpful. At the same time, only 36% of retailers surveyed said deploying location-based offers would make their promotions more effective, and only 46% said that the ability to deploy offers in real time was the most important loyalty program technological capability to consider.

Consumer respondents indicated cited the main method for saving money, especially while shopping for groceries, is by accumulating and using loyalty points and taking advantage of discounts on items. The use of loyalty points was most cited by those in “the silent generation,” (born between 1925 and 1945), with 75% of those respondents saying that’s how they save money on groceries. Store brand and private-label items were also most popular among this cohort, with 58% saying they bought such products to save money.

At the other end of the spectrum, only 26% of Gen Z respondents (born between 1997 and 2012) reported buying store-brand or private-label items.

When asked about their promotional strategies over the past year, business respondents’ answers were as follows:

  • 58% of respondents in the grocery, retail, hospitality, and restaurant sectors said they were offering more promotions to provide value to customers.
  • 19% of respondents in those sectors said they were offering deeper discounts to customers.
  • 6% said they offered smaller discounts to preserve their profit margins.

Over the next six months, they said they planned to do the following to meet consumer needs more effectively:

  • 54% said they would make it easier to redeem loyalty points.
  • 48% planned to deliver relevant discounts to customers during the shopping experience.
  • 37% said they would offer more store-brand/private-label items.
  • 23% said they would implement gamification into the shopping experience.

“The second surprise was a similar divergence in consumer and retailer opinions toward loyalty program gamification,” Mason added. “Sixty-six percent of consumers said they would participate in games, contests or challenges if offered, but only 23% of loyalty program managers plan to invest in gamifying the shopping experience over the next 3-6 months.”

And finally, the difference between global regions in consumers’ approaches to saving money amid the cost-of-living crisis was significant. Mason pointed out that Americans are much more likely to clip coupons (53%) than shoppers in the U.K. (36%) or Australia (23%), while U.K. consumers opted to cut back on ordering takeaway food (64%) more frequently than their North American counterparts (47%).

Eagle Eye’s software is used to run loyalty programs for brands including Asda, Sainsbury’s, Tesco, Waitrose, John Lewis & Partners, Virgin Red, Pret A Manger, Pizza Express, Loblaws, Southeastern Grocers, and Woolworths Group.

Kathleen Sampey