Do loyalty programs need to be more flexible to succeed?
According to a survey of 1,000 shoppers from PwC (PricewaterhouseCoopers), shoppers do not want their loyalty programs at grocers to go away. In fact, they want them to evolve to offer more flexible and tangible benefits.
Overall, 83 percent of respondents want loyalty programs to offer flexibility in how they earn and spend points, according to the study. For instance, shoppers indicated they want rewards for buying healthier foods — earning points for buying apples over apple pie, for example. PwC said such loyalty incentives could help increase fresh food sales and also boost a store’s reputation as a health-conscious grocer.
Survey respondents also indicated they want loyalty to work in a similar way to other businesses (i.e., points for continuing to give their business to the same store). Most also want the option to choose whether they spend points on groceries or convert them to cash. Wrote PwC in the report, "Tying in a reward system that offers this flexibility and control can keep future shoppers spending with your store and raise the costs of switching."
PwC also suggested offering shoppers loyalty points for purchasing promotional items in the store, which can help push new products at higher price points.
Millennials may look at grocery loyalty programs "more like a game in the future," with points earned by inviting and competing with friends, the report said.
"Loyalty in the future will be focused on value creation and shopper relevance," PwC concluded. "So ensure your loyalty program of the future generates revenue and keeps your margins intact. The secret? Personalization, relevance, and clear messaging of the value of being a member."
The report arrives as personalized offers based on purchase data have been hyped by Safeway, Kroger and others as the next evolution of grocery loyalty. The further embrace of digital coupons also offers potentially new ways to give shoppers incentives.
Last week, Publix revealed it is launching a new website to help people register for special offers, according to the Tampa Bay Times. Based on customers’ profiles, customized notifications arrive about deals and coupons on shoppers’ smartphones as they enter a store.
- Front of the line: How grocers can get ahead for the future – PwC
- In-Store Grocery Shopping to Transform as Consumers Call for Personalized Experiences, According to PwC US – PwC
- Supermarkets Offer Personalized Pricing – Bloomberg Businessweek
- Publix to launch new website for shoppers to register for special offers – Tampa Bay Times
- What Type of Digital Coupons Do Grocery Shoppers Want? – RetailWire
Should points for buying healthier foods, promotional items or other strategies be a larger component of grocers’ loyalty programs? Can a points-based system complement the trend toward personalized offers at supermarkets?