As online booms, grocery shopping is now no longer about which store is closest, or which store has parking. It’s becoming more and more driven by price with loyalty taking a back seat.
With the boom in social media platforms and influencers, newsletters too are being pushed to the side.
So, what can grocers do to avoid a race to the bottom, which isn’t going to help anyone? How can you win the fight for space on someone’s mobile and make it stick?
I’m a dog person.
I grew up on a farm in Lincolnshire, where we had dogs as part of the furniture. Even as a child, I remember thinking how amazing it was that they would do pretty much whatever we asked of them, in return for a pat and a bit of a belly rub. Sometimes it was death defying stuff, other times just doing the daily wander and barking at the birds.
Not the farm cats though. No chance. They came and went as they pleased. They would commit atrocities to wildlife on a daily basis. No fun to be had with them, and always the risk of losing an eye if you tried to pick them up. In fact, when we sold the farm, we left the cats behind and I didn’t miss them.
Now, I’m not trying to spark a debate about dogs vs cats, everyone knows which side of that fence they sit on (dog is the best obviously), I’m thinking about loyalty and what we can do to attract a dog-type ‘walk through wall for you’ reaction, rather than a cat’s more ‘take it or leave it’ attitude.
I have two personal email accounts. One for friends and family, and one for newsletters and sign ups. I don’t think I’m alone in this; I want an easy way to cut the wheat from the chaff, and for me, it’s super simple.
Let’s not get started on personalisation through loyalty. As a freebie treat recently, I got sent some extra hold hair gel from a well-known grocer who I’ve been shopping with for years. Now, as flattering as this may be, my hair gave up the ghost many years ago, so I’m left with a completely useless product in my house. A bottle of Rioja would have gone down much better – something they surely knew from my shopping history?
The point I am trying to make here is that it’s too easy for us to be cats, and have a take it or leave it attitude to loyalty, and follow the prices as and when it pleases us. It’s too easy to delete a newsletter and is probably why click through rates are so very, very bad, yet somehow still acceptable – 2.5 per cent is scattergun at best. I’m struggling to think of a loyalty scheme that I actually subscribe to and zone in on.
Points don’t really mean prizes, and the value exchange is pretty one sided. A study by Edgell Knowledge Network of 60 retailers discovered that 81 per cent of customer weren’t aware of what their rewards entitlements consist of or how they’re redeemed. Makes you think – what’s the point, right?
I use comparison sites, shop around for deals, get cashback, and I’m happy with that. I’m not that worried who is benefitting from my purchase, as long as I’m getting a good deal. I’m just being honest here.
Everybody talks about data being the new oil, but it’s only valuable if you use it in the right way. Refine it, and you have rocket fuel. Leave it as crude, and it’s, well, crude.
I think it really boils down to understanding that we consumers actually really value being looked after. We don’t want newsletters; we want to feel special. Birthday cards in the post, a free coffee in store or a surprise at the checkout, just because we’re part of the club, would all go down well. We don’t want another piece of plastic to lug around in our wallets, we’ve all got digital wallets these days so let me keep my loyalty in my pocket. 79 per cent of loyalty schemes use mobile channels, yet just 24 per cent allow mobile redemption.
Imagine being in the checkout queue at a supermarket. Imagine there’s a sudden glitterball light show at the till in front of you, as the person checking out gets their weekly shop absolutely free, just because they’re part of ‘The Club’ and what’s more, it’s going to happen to one person every day in store. And tomorrow it could be you… How much more likely would you be to sign up to ‘The Club’ based on that? Imagine if ‘The Club’ also got you a birthday cake and gave you everyday benefits like 10 per cent off everything, just because you gave them your email address?
“Can’t do it Tom, that’s going to be too expensive. We can’t give away £100 a day in every store. Or a cake every year. And 10 per cent off – that’s going to hammer our suppliers. Can’t do it. Won’t do it. We’ll stick with points and newsletters for now thanks, it’s what we’ve always done.”
I’ll shop somewhere else then. In today’s increasingly online dominated world, it really doesn’t matter too much to me who I spend my money with, as long as I feel I’m getting the best deal. But if there’s someone out there who will fight for my cash, and value me as a customer, and treat me like a friend not a generic dataset, then I will go out of my way to spend with them, again and again.
So, the challenge retailers face is around finding that exchange your customers really value – what is their ‘belly rub’ equivalent? It’s a small thing from you, but worth a lot on the other side.
The task is simple. Ask them. Get out there, get on the shop floor and ask them. Once you know what they love, you can ask three more simple questions, can we do it, is it worth it, and is it sustainable. Tick these boxes and you might start that journey to my digital wallet or even that ‘other inbox’ – hallowed ground indeed.
If you get it right, you’ll have me as a friend for life.
By PA Consulting consumer expert Tom Day