How to Boost Grocery Customer Loyalty by Using Rewards Programs

By: Melissa Canellis


Grocery retailers are responding to new customer demands, recently accelerated due to the pandemic, by implementing a digital customer loyalty program. Customers from all demographics, even those over 50, have shifted to some online shopping and delivery. While grocery retailers may have enjoyed an initial spike in demand during 2020, keeping customers engaged through value-added benefits will help maintain and earn their future loyalty in a post-pandemic environment.

New Grocery Retail Trends

Current industry statistics indicate new trends in grocery retail for both online and offline shopping. Forrester research from 2018 found the global online grocery market was to double by 2022. Post pandemic numbers suggest even more growth opportunities. An Inmar Intelligence consumer study reports that  78.7% of consumers have shopped online for groceries after the COVID-19 outbreak, up 39% from before the pandemic.

Additionally, since 2010 physical stores have been shrinking with the average sales area decreasing by 15%, as these retailers focus on a more limited selection or products curated specifically for the local neighborhood, according to dunnhumby research.

These highlighted trends and changes in customer behavior suggest brands need to reconsider how they create a valuable shopping experience. Grocery retailers must embrace a data-driven approach that helps marketers gather and analyze every customer interaction and touchpoint, whether the shopper is online or physically in-store to better understand their customers and deliver on their wants.

Learn more about how to apply data-driven insights to current shopper behavioral trends from an on-demand webinar featuring Scott Compton, Senior Analyst at Forrester. Watch Now: Harnessing The Online Grocery Surge – Intelligent Loyalty Strategies for 2021.


Grocery Shoppers’ Current Expectations

With the right data, retailers can determine how to best meet grocery customers’ expectations for value, convenience and an easy shopping experience. With the physical plus digital transition, also comes the need to serve-up omnichannel savings. Whether customers are shopping online or in-store, they expect to be presented with personalized incentives and customized experiences that expand their offerings and boost their loyalty.

  • A digital customer loyalty solution for grocery retailers can also solve the customer churn challenges they face daily. With a customized rewards program, retailers can:
  • Win-back customers who may have moved to another brand due to COVID-19
  • Digitally connect with customers and provide important messages & updates
  • Deliver real-time offers over customers’ preferred channels to drive higher customer engagement & satisfaction
  • Create unified customer profiles from both online and offline data pipelines
  • Provide customers with more value through the earning of points, reward perks and personalized experiences

Measure Customer Loyalty with Grocery KPI Metrics

A grocery customer loyalty program should not only help mitigate churn, but also increase customer happiness and retention. Brands need to track their loyalty efforts by accurately attaining results that provide a holistic overview of the reward program performance. Different programs call for unique analytics, but here are a few of the most common metrics grocery retailers watch when leveraging a loyalty program:

  •   Number of sign-ups, visits and referrals
  •   Real-time and historical campaign KPIs including email open rates, push notification open rates, reward redemption rates, and customer behavior analysis
  •   Customer retention rates
  •   Customer lifetime value
  •   Same-store sales
  •   SKU-based loyalty (loyalty to specific products)

Creating a holistic customer experience today requires an omnichannel strategy that delivers the same benefits in-store and online. A grocery customer loyalty program provides retailers with the tools and data necessary to create personalized offers and experiences that connect brands with their customers in the most important ways. Interested in learning about current shopper trends that will help you drive loyalty and higher lifetime value?

For more insights on how to attract and retain shoppers in 2021, read our Q&A featuring Scott Compton, Forrester Senior Analyst.

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