Loyalty programs are becoming more important than ever as rising inflation causes shoppers to seek the best deals possible, but too many offer the same, uninspired benefits — leading to 50% of consumers believing that loyalty programs don’t offer much value, according to a study by Incisiv in partnership with PAR/Punchh. This presents grocers that can make their own offerings stand out an opportunity to capture greater customer loyalty across all channels.
“A few years ago we were very protective of how many apps we downloaded to our phones, but that no longer exists with the space that we have available today,” said Brittany Maroney, Director of Marketing and Communications at PAR/Punchh.
“What we’re seeing is that there’s a lot more opportunities for brands to get that mindshare and get that phone share, and really amplify their efforts to the general shopper,” she added. “How are they going to do that? First, they’re going to implement that app and they’re really going to encourage that omnichannel engagement.”
EASE OF USE IMPORTANT
Options like tier-based models that offer bigger rewards based on spending can drive repeat purchases, according to Maroney. Gamification is another potential driver — the report found that 81% of shoppers take advantage of challenges to receive the rewards, and grocery’s close relationship to seasonal and holiday items can provide inspiration when designing new and engaging promotions.
However, grocers should avoid overcomplicating their offerings, according to Guarav Pant, Chief Insights Officer at Incisiv. He noted that grocers should be respectful of their shoppers’ time and put an emphasis on transparency when it comes to earning points and rewards, rather than try to pile too many opportunities into one app.
“Hitting shoppers with multiple offers is a is a marketer’s folly,” said Guarav Pant, Chief Insights Officer at Incisiv. “It’s not something you need to do. The basic focus is around how many points do they have? What are they missing? What do they need to get to the next reward?
“It’s making that whole process simple and being extremely careful about not treating this as a database to just market all available offers.”
GUIDING SHOPPER BEHAVIOR
These focused offers can also help guide shopper behavior in a way that’s beneficial for grocers, according to Pant.
The right incentives can be the tipping point needed to turn a shopper down the path to a purchase with a higher margin, whether that’s achieved by directing the shopper toward a certain channel or encouraging the purchase of a particular product.
Focused rewards can be particularly effective when paired with gamification.
“Games have a process, they have complexity, they have layers, they have a tiering system and they have rewards,” said Pant. “I think that makes the whole process less mundane and more engaging and fun. It helps drive behavior towards a possible journey that’s more beneficial to the grocer. For example, incentivizing them to do more curbside, which is more profitable for them than delivery, or driving them towards a particular set of products.”