Newsweek recently released its America’s Best Loyalty Programs 2022 list and several food brands stood out.
In the grocery category, Kroger, Sprouts Farmers Market and Publix Super Markets landed the top spots, while Jersey Mike’s Subs, Einstein Bros. Bagels, and Subway reigned supreme in the restaurants division.
With that, loyalty programs have become an essential part of everyday transactions, with the average U.S. household enrolled in an estimated 18 different programs.
During a recent earnings call, Starbucks CEO Kevin Johnson even noted that Starbucks Rewards now accounts for 53% of spend in stores — an all-time high.
What exactly are consumers looking for with so many loyalty programs on the market? The Food Institute took a closer look:
WHAT CONSUMERS WANT
With so many loyalty programs out there, consumers are gaining a sense of what they want.
“Customers are typically looking for convenience and exclusive benefits when evaluating a loyalty program,” Tucker Matheson, co-founder and managing partner at Markacy, a digital strategy firm, told The Food Institute. “If the loyalty program makes a customer’s life easier, like being able to order groceries from an app to be delivered while earning points, they are more likely to sign-up.”
Matheson added that community and personalization also drive exclusivity. “Being able to receive weekly specials, personalized recommendation, digital coupons, and loyalty points to apply to future purchases makes customers feel like they have a special relationship with the brand and keep them coming back,” he said.
Meanwhile, Sundus Shahid Bari, associate director of strategy & planning at Blitz Advertising, believes companies need to think about loyalty as a community in which all members benefit.
“Loyalty programs that stand out are the ones that don’t expire or expect a recurring stream of purchases in order to remain viable,” Bari added.
HOW BRANDS ARE STANDING OUT
One reason Kroger, Sprouts, and Publix were at the top of the list is because they are leveraging technology and apps to enhance their customer experience, noted Matheson.
“They are listening to their customers’ feedback and are providing options to make grocery shopping easier, and more fun,” he said. “App functionality like making a grocery list and assigning it for pickup and delivery right from the app keeps customers loyal.”
Matheson added that, while some programs like Kroger’s require an annual subscription, customers are willing to pay for a higher level of service. Further, companies can use first party data on customer store preferences and purchase patterns to better plan inventory, pass along savings, etc.
Additionally, the Newsweek report highlighted the gamification trend: introducing digital games into loyalty programs in a variety of ways to engage customers.
For example, Wendy’s has its own channel on livestreaming platform Twitch, while Chipotle has done a Halloween promotion in partnership with the game platform Roblox, in which users are invited to try to navigate the “Boorito maze” to win store and branded virtual items.