Escalating food and grocery prices have many U.S. shoppers rethinking their loyalty to retailers and brands, according to a new survey by Inmar Intelligence.
Although vaccines and looser business restrictions are making consumers eager to get out shopping, they are still looking for value. Of 1,000 adults polled, 89.7% saw prices increase for groceries and everyday household items they buy regularly and 68% chose to shop at a different store for those items due to the price hikes.
Forty-one percent believe that brands and retailers should find solutions to prevent rising prices for consumers and, if not, those consumers have no problem switching stores to save money. This is leading consumers to eagerly join loyalty programs and consider joining wholesale discount clubs to find the best deals. Fifty-two percent of shoppers have even joined more than one loyalty program due to rising prices.
This shift among consumers will press grocers to rethink their loyalty program strategies. The Food Institute recently spoke to Spencer Baird, EVP and President, MarTech at Inmar Intelligence for insight on how grocers can best attract and retain customers during this time.
STEPS RETAILERS CAN TAKE TO SECURE CUSTOMERS
The awareness of the increasing Consumer Price Index is naturally making shoppers more cost sensitive, Baird noted, adding that as so many consumers have explored online shopping during the pandemic, there is now a dynamic where shoppers are more enabled to compare prices and promotions across retailers.
“For retailers that have already done the groundwork, it will be critical that they continue to dedicate resources to a cohesive and valuable omnichannel experience for the shopper,” Baird said. “Even higher-priced retailers can compete in this environment if shoppers can easily access relevant digital coupons and loyalty rewards.”
For retailers that haven’t done the groundwork, Baird recommends getting started by asking the right questions in leadership meetings, to determine what digital transformational strategy is best for their business and shoppers.
BENEFITS RETAILERS CAN IMPLEMENT TO ATTRACT SHOPPERS
Though price seems to be the key factor for consumers shopping for loyalty programs, other incentives can also be quite helpful. Personalization and continuity are two ways that retailers can attract shoppers, according to Baird.
“The industry is talking a lot about omnichannel marketing, but to customers that doesn’t mean anything. They see one store, one brand, and expect one consistent experience,” he said. “If you have disconnected experiences between e-commerce, in-store, loyalty, digital coupons, and multiple logins, today’s shoppers won’t stick around. They want — in fact demand — continuity.”
In regard to personalization, Baird said that everyone benefits from a personalized, omnichannel focus on loyalty. “Retailers see the same shoppers, filling bigger baskets, more often. CPGs experience a larger return on spending, thanks to better targeting and personalization. And shoppers feel like they are truly understood, and have their needs met almost automatically.”
Baird emphasized that discounts and rewards are only valuable to shoppers if they apply to the products they want to buy and that it’s not enough for offers to simply be interesting. “They need to offer consistent value and convenience,” he said. “This is especially true in an omnichannel world where they might interact with your content in multiple places. Shoppers want to save money and time. Don’t make them search for your best offers.”