It’s Time for Grocers To Amp Up Loyalty Programs With AI

Today, loyalty programs can be found everywhere you look. From movie theaters to restaurants and even office supply stores, retailers have learned that loyalty programs are a necessity to remain competitive in today’s crowded market.

If you’re a shopper, each retailer is fighting to secure your attention and share of wallet. Whether it’s through weekly coupons, spending-based rewards or promotional push notifications, brands are trying their best to increase engagement with their offerings. However, with so many programs and deals out there, no two loyalty programs should be the same.

What started as a simple idea of rewarding shoppers for the time and money spent with a particular retailer has turned into a vast and competitive landscape of loyalty programs. Think about the way you personally interact with retailers daily. Do you open an app on your phone each time you venture through a drive-thru? Do you give the cashier your phone number at the grocery store checkout? Or maybe you receive email blasts with reminders to spend your rewards cash before it expires?

Chances are, you answered yes to at least one of those questions, highlighting just how impactful loyalty programs have become in our society. However, the person next to you might have answered the questions differently based on their personal preferences. With so much competition in the space, loyalty programs are ripe for innovation and differentiation. Plus, it’s a no-brainer that shoppers wish to benefit from savings in their highest spending areas.

In fact, a recent study from PYMNTS found that 44% of consumers are most interested in receiving personalized card-linked offers from grocery stores, compared to other industries. It’s clear that the grocery industry is ready for loyalty program transformation, but how can grocers provide their shoppers with loyalty innovation that truly excites them? Let’s discuss three ways.

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1. Transforming Grocery Loyalty with AI

Unsurprisingly, the secret to success to transforming loyalty is artificial intelligence. While loyalty programs first hit the market nearly three decades ago, the key innovation that sets today’s best programs apart from the rest is AI.

AI can ingest and review data incredibly quickly, opening a world of opportunity for grocers that operate in a high-data environment. Today, grocers can feed large data sets through AI to identify patterns and trends. The technology can quickly identify popular seasonal items, regional sales trends and even key price points that are popular with customers.

As loyalty programs developed over time and grocers had access to larger amounts of customer data, AI technology progressed as well. Now, grocers can deliver tailored marketing campaigns with the help of AI that are unique to each shopper and consider individual shopper preferences, behaviors and spending habits.

2. Using Personalization to Connect With Shoppers Where It Matters

Today’s shopper wants to feel like the time and money they spend with a retailer is valued. This is only exacerbated in the grocery industry. An individual shopper likely has a handful of different grocery retailers within driving distance where they can choose to spend their money, and the ultimate decision comes down to which grocer offers the best savings on the items they shop for most frequently.

By implementing AI into loyalty programs, grocers can track their customers’ spending habits, creating individual shopper profiles that identify trends as niche and specific as tastes, brand preferences and price sensitivities.

From there, with tailored, individual profiles, grocers can send out timely and targeted promotional outreach that offers customers savings on their preferred items. For the shopper, knowing that the retailer is attentive of their individual needs builds a genuine sense of loyalty.

This outreach can even go beyond finding a good deal in a shopper’s ideal price range. AI can also learn individual shoppers’ preferences around messaging, font, design choices and more, allowing retailers to craft outreach that is specifically designed to catch an individual shopper’s attention.

As a result, AI has taken personalization to the next level. Retailers that are embracing and implementing AI into their loyalty programs are quickly establishing a competitive edge over their counterparts as customers demand increasing levels of personalization.

3. Building a Holistic, AI-Driven Loyalty Program

If grocers are going to truly make the most effective use of personalization, they need to ensure that promotion-based loyalty offers can be extended across the entire store catalog. With many current loyalty programs, offers are restricted to certain brands that the grocer has a partnership with or only feature a manually curated, rotating selection of items. What good does a promotion on pretzels do if a shopper prefers a different salty snack or a competing brand?

With this approach, it’s impossible to guarantee shoppers receive promotions on the brands and items that they purchase regularly. With AI, grocers can open their loyalty programs to the entire store catalog, making use of each product in the store. Then, with the addition of tailored, individual profiles, grocers can offer meaningful discounts and loyalty rewards on the items that shoppers actually buy.

With AI-driven loyalty programs, shoppers no longer need to hop from store to store to find discounts on their essential items; they can purchase everything they need with impactful savings all in one place. The time saved alone is enough to reinforce a customer’s loyalty with a store that offers that, but the additional savings solidifies the relationship the grocer has established with the shopper through its rewards program.

Fostering Loyalty and Increasing Customer Value

Effective implementation of AI into loyalty programs is a win-win for retailers and customers alike. In today’s competitive landscape, AI helps foster a greater sense of customer loyalty with impactful savings while retailers gain insights into how each shopper contributes to their long-term growth. Over time, grocers can develop smart strategies that strengthen customer retention and close revenue gaps, increasing the lifetime value of each shopper. Ultimately, AI can be the differentiator that sets the best grocery loyalty programs apart from the rest, fostering customer engagement like never before.

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