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Using Customer Loyalty Programs to Personalize Grocery Shopping

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The use of data analytics has transformed grocery shopping as we know it, making it a more personalized experience for customers and a more profitable one for stores.

When stores began using loyalty programs in the 1980s and 1990s, they began collecting data on customer purchases to determine which types of offers were most effective and applying them to shoppers as a whole. These programs evolved into more targeted offers at the demographic level, but they still fell short of addressing shoppers as individuals with unique preferences and buying habits.

Now, with the capability to capture more relevant data at every touch point—from the time a shopper opens an email or clicks on a banner ad to the point of sale—stores can create a myriad of individualized offers, especially if they enlist the help of an experienced data management partner.

Here’s a look at how grocery stores are putting big data to work for them.

Using Gamification to Enhance Customer Engagement

Grocery chain Loblaws has experienced great success with their PC Plus loyalty program, which incorporates a smartphone app and a loyalty credit card that increases how fast shoppers can earn rewards. It’s a data collection and customer loyalty program disguised as a game customers enjoy playing.

Peter Danforth, Loblaw’s senior director of loyalty and customer analytics, said the strength of the program comes from its technology and its premise: That the customer knows his or her needs best.

While the company wouldn’t have traditionally promoted generic brands, for instance, the PC Plus app does if it fits with a customer’s purchasing history.

The program has helped Loblaws enhance its revenue, and it even received the FICO Decision Management Award for Analytic Excellence.

Using Digital Offers to Increase Customer Lifetime Value

It’s no secret that mothers with young children are going to spend more than most at the grocery store. It’s also not surprising that they are receptive to free samples or at a discounted price, especially when it’s a product they buy frequently. Target attracts this savvy, high-value customer segment with digital offers through its Cartwheel app, which provides enticing discounts on baby items and other products moms use every day.

When the Cartwheel app debuted three years ago, the amount of time shoppers spent browsing Target products on their mobile devices increased by more than 250 percent. Target recently expanded the app to clip manufacturers’ digital offers. By allowing customers to access more digital deals, Target is increasing the likelihood moms—and others—will keep coming back and spending more over time.

Offering Personalized Reward to High-Value Customers

Rewards based on spending totals enhance loyalty over time while increasing the amount they spend during each trip. Meijer’s mperks loyalty program delivers personalized rewards to customers when they reach a set spending level in a certain category, such as produce or apparel. A customer who might have purchased clothing at a department store might buy the same item at Meijer to earn the rewards.

Retailers can also offer extra points on high-value products to customers are most likely to buy them, based on the customer data they collect.

Branded gift cards can be a good source of revenue in this way. Once a shopper buys a gift card, retailers can offer them additional points if they buy another or make the offer even more attractive by allowing them to stack bonus points with other seasonal bonus points on gift card purchases.

In addition to enhancing engagement, boosting foot traffic and increasing customer lifetime value, data-driven customer loyalty programs contribute to brand and product amplification through word of mouth and social sharing. Moms who shop often look to other moms for advice about scoring the best deals and find it on blogs that offer tips and tricks for specific stores. Simply by using these programs and talking about them, moms like the Krazy Coupon Lady effectively become unpaid brand ambassadors for grocery stores.

Implementing Data-Driven Customer Loyalty Programs

To stay competitive in this space, grocery stores and other retailers need the right combination of technology and expertise to turn customer data into actionable insights.

They also need the right assets to ensure their customer loyalty programs are user-friendly, visible and well integrated with other marketing initiatives.

The value of using these offers and rewards must be clearly communicated to a customer through all channels, whether she is checking her email, scrolling through her smartphone app, browsing through a weekly mailer or making her way to the checkout line and receiving offers printed just for her.

DATA Communications Management DATA Communications Management has specific expertise in managing end-to-end retail marketing campaigns, including supporting customer loyalty programs. We rely on the latest technologies and well-established processes that make it easy for stores to plan, execute and manage highly relevant campaigns.

We can also manage the end-to-end production of any print or digital elements your campaign needs, from store signage and direct mail to loyalty cards and fulfillment of customer rewards.

Relying on a single vendor to manage all these elements—from customer data to content and communications—allows retailers to enhance efficiency while maintaining brand consistency across all channels.

To learn more about how retailers are using data to drive marketing initiatives, download our latest resource, “5 Secrets to Launching a Successful Retail Marketing Campaign.”

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Topics Retail Services

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