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Defining loyalty: Key trends in customer loyalty

Fostering customer loyalty in the grocery sector is nothing new. This age-old strategy can help create an emotional connection between retailers and customers, driving sales and business growth. However, in an ever-evolving landscape, the way in which retailers build customer loyalty is changing.

The pandemic dramatically changed how customers shop, with our research highlighting that customers shopped less frequently and were shopping larger baskets. The shift to ecommerce also accelerated. According to research, 34% of US households said that they were shopping for groceries online more than they did pre-pandemic.

The fight for loyalty has intensified, with grocery retailers using granular insights about their customers and macro trends to create loyalty programmes that are intelligent, sophisticated, and more profitable than ever.

In our recent report – Defining Loyalty: How Customer First loyalty can drive success in retail – we explored the potential of customer loyalty in post-pandemic grocery retailers, drawing on our standing as a global leader in data science and analytics.

Here, we highlight some of the key trends in customer loyalty identified in the report that are shaping the retail market in a post-pandemic world.

 

A seamless customer experience

 

With the growth in ecommerce, grocery retailers must engage with customers both online and in-store by ensuring a seamless customer experience across multiple touchpoints. Personalised shopping experiences can prevent shoppers from being bombarded with disjointed messages across touchpoints that may cause them to shop elsewhere. Gone are the days of traditional award points collected en masse by customers. Instead, today’s customers require a joined-up approach with tailored, personalised experiences across all touchpoints, enabling them to find and pay for products seamlessly while ensuring value, convenience, and safety.

Here are three ways our research showed that grocery retailers can achieve this:

 

1 – Blended shopper programmes

 

A disjointed digital journey can be off-putting for customers. A single platform, such as a digital app, enhances the user experience by supporting customers at all stages of the online and digitally-enabled instore shopping experience, providing a frictionless flawless experience from the first touchpoint to the last.

 

2 – Loyalty ecosystems 

 

Loyalty ecosystems can help maximise the value of the customer asset through strategic partnerships that put customer data at the heart of the platform. For example, grocery retailers can combine multiple shopping, social, entertainment, payment and financial management into an intuitive single platform or app. B2B services can further enhance these loyalty ecosystems. For example, Amazon Prime, offers a raft of B2B services to other retailers that grow the connected (Amazon) asset and deliver additional benefits to customers.

 

3 – Subscription programmes

 

Subscription programmes can help lock-in customer loyalty by offering enhanced benefits and services of a high perceived value. It also benefits the retailer by creating a recurring revenue stream. According to research, 87% of customers satisfied with the benefits of a retailer’s paid loyalty programme will likely choose that retailer over a competitor offering a lower price. Walmart is one example of a retailer that has implemented a successful premium loyalty programme, which has helped drive balanced growth of higher-margin services across non-grocery and grocery products. Walmart+ members enjoy a wide range of enhanced and discounted services that help drive loyalty, including kerbside pickup, discounts on fuel and prescriptions, and free online delivery.

For a more detailed look at loyalty trends in the retail market, download our full report here.

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