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All You Need to Know About the Growing Demand for Grocery Loyalty Programs

  • Posted on July 17, 2022 by Robert
  • Reading time about 6 minutes
Grocery loyalty program

We all know that customer loyalty plays a very important part in the success of any business irrespective of the industry type. As compared to customer acquisition, retention of customers is quite cheaper and also helps tremendously in delivering higher ROI. Additionally, it is hard to acquire new customers every time but you can keep special focus on the ones you already have.

Talking about the grocery sector, the importance of customer loyalty is growing more than ever especially after COVID 19 outbreak as customers rely on online grocery shopping. In this blog, we will check out everything that can help you grow your grocery business with reliable customer loyalty software.

How Loyalty Program Can Help Your Grocery Business Grow?

As the competition is quite high, customers prefer to shop at those grocery stores that provide an omnichannel experience and have all their favorite grocery items in stock. Since 2020, the struggle to win customer loyalty in the grocery business has become real. Making use of a reliable loyalty management system is the need of the hour if you are still not using one for your grocery business.

Here are some of the top benefits that can help by using a grocery loyalty program-

– Faster Customer Acquisition

Making your target audience aware of your business is essential to making them your customers and a loyalty program is considered one of the deciding factors for them to choose a grocery retailer. Research by PYMNTS also says that 25% of customers are ready to stop buying online only if their physical grocery stores have a loyalty program.

– Increase in CLV (Customer Lifetime Value)

Grocery items are the things that customers buy repeatedly and if your grocery retail business has a great loyalty program intact, your customers can be the prime source to bring repeat sales and higher customer lifetime value. Record says 43% of consumers prefer to spend more at grocery stores with loyalty programs.

– Source of Zero-Party Data

Another good thing about using loyalty programs is that it acts as a great source to collect zero-party data, help grocery retailers to improve their marketing efforts, and come up with effective

campaigns and offers. Once you build connections, you can engage them regularly leading to more new marketing opportunities.

Must-Know Top Customer Trends in Grocery Business for 2022

After checking out the advantages offered by the loyalty program in the grocery business, it’s time to know your customers better through the help of the top customer trends in 2022.

– More Customers Prefer Online Grocery Shopping

We all know that after the COVID outbreak, customers are purchasing everything online and grocery items top the list. In 2020, more than 50% of buyers claimed that they brought groceries online in FMI 2021 Grocery Shopper Report and this number increased to 64% in 2021.

If customers feel that their favorite grocery store doesn’t have an online presence, they are more likely to switch to others that have.

– They Need A Seamless Omni channel Experience

As more and more customers shop online, they expect seamless transitions between offline and online with hassle-free eCommerce integrations for every grocery store. Apart from a seamless eCommerce & offline shopping experience, customers want the loyalty program to work across all customer touch points – web, mobile, etc.

– They Expect High-Level Personalization

Customers today expect highly personalized experiences and offer that work exclusively for them. Stat says 90% of respondents in the Epsilon survey are likely to do business with grocery stores that are offering personalized experiences.

Customers no longer need the one-size-fits-all deals that they often receive from many businesses; they pay special attention to custom-made offers sent by some grocers. They are more likely to choose the ones that offer better deals and experience than your competitors.

– Usage of Different Delivery Services

Another good thing for grocery stores is that customers use different delivery services to shop and get their groceries delivered, not just only direct delivery from stores. This offers a great opportunity for those grocers that don’t have their delivery service as they can work with delivery partners like instacart and get their items delivered directly.

This is one of the most effective ways to enter the delivery market if you are new as a grocery business owner, saving efforts and money to build it from scratch.

Best Strategies to Build Grocery Loyalty program-

1. Forget Paper Coupons

Customers prefer loyalty programs that send online coupons sent via email or SMS for easy usage and digital coupons enable customers to keep track of their purchases. Using a loyalty program aligned with a digital coupon system can help to target specific customers as paper coupons can be easily forged or lost.

2. Offer More Than Loyalty Cashback

Providing direct cashback or discounts is not a beneficial way for grocers to add business value. Making use of store credit points, gift cards, etc. can be a great way to encourage repeat purchases as they cannot be redeemed instantly and they must come back to redeem them later.

3. Opt for Loyalty Program Tiers

Using a Tiered loyalty program for your grocery business will encourage customers to spend more to move from one level to the next. Additionally, all customers are not equally loyal or spend the same amount at your grocery store, differentiate them based on their annual spending, purchase frequency, etc. and offer perks and conditions as per their tiers.

4. Limited-Time Offers

Another way to use a loyalty program is to motivate customers using limited-time offers targeted to your specific program members. You can start by creating special promotions like exclusive 10% discount only on Wednesdays, coupons with expiry dates, double-points days, extra points earnings on specific category shopping, etc.

5. Add Gamification To Loyalty Strategy

To make your program more exciting, gamify your grocery loyalty program and achieve higher participation and satisfaction rates. You can do so by adding loyalty currency, creatively sending communications, adding small games, introducing program tiers, rewards unlocking after certain actions, etc.

Closing Statement

Hopefully, you must be now aware of all the benefits that a grocery loyalty program can offer and top strategies that must be kept in mind while developing this program. Ensure that you keep the points stated above in your mind while hiring experts to build programs for groceries and the food industry.

Novus is an all-in-one loyalty program platform that helps in building a wide range of custom-made loyalty solutions across various industry verticals. If you are planning to build a new loyalty program or revamp an old one for your grocery retail business, connect with the experts of Novus to get a quick demo and see how you can add business value by bringing more repeat purchases and higher customer lifetime value.

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