Loyalty Simplified: Smart Ways to Boost Grocery Loyalty With Technology

Asia-Pacific (APAC) retailers are under pressure as consumer behaviour continues to evolve in response to macroeconomic stressors. The current landscape, wrought with cost-of-living increases, soaring interest rates, a looming mortgage crisis and climbing rents has forced consumers to become more discerning in their spending habits. As a result, retailers must swiftly adapt to this changing landscape or risk being left behind.

Now is the perfect time for retailers to invest in capabilities that help them showcase the value of their loyalty programs to current and potential customers and increase existing member engagement. In fact, research reveals a staggering 76 per cent of consumers say they have joined new loyalty programs or used their existing memberships more frequently this year.

For the loyalty program managers who predict higher levels of engagement in the next year to be proven right, they’ll have to deliver a high-value, high-touch loyalty experience that gives consumers a compelling reason to use their programs.

Brands know this. But are they investing in the right features and options to help them achieve their goals of increasing membership and engagement? To do that, they must make the most of three major opportunities for grocery loyalty programs right now: advanced personalisation, marketing in the moment and gamification.

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Three significant loyalty opportunities for grocery retailers

Each of these is an area where most grocery loyalty professionals agree they can improve. And each can potentially have a significant impact on loyalty participation, offer acceptance rates, engagement levels and ultimately, revenues and profitability.

1. Advanced personalisation:

One of the key drivers of successful grocery loyalty programs is advanced personalisation. By leveraging customer data and individual preferences, grocery retailers can tailor their offerings on a one-to-one level, creating a much more engaging and satisfying shopping experience.

Of course, personalisation at scale is traditionally difficult for grocery retailers to achieve, especially for those that rely on legacy technology. Despite recognising that personalisation tactics can make their promotional and loyalty strategies more effective, nearly one-third (31%) of grocery loyalty program managers admit that delivering personalised offers was their biggest challenge.

When asked what could improve the efficacy of their loyalty program’s current promotional strategy, program managers cited the ability to deliver offers or promotions to customers when they’re most likely to be used/redeemed (55%), the capability to match the right offer to the right customer (53%) and customising offers based on past purchasing behaviours (50%). Each of these is integral to a true personalisation approach.

Of course, to achieve personalisation at scale, grocery retailers need a technology partner that can deliver on those core capabilities. With the right technology and partner, retailers can take advantage of the personalisation opportunity.

2. Marketing in the moment:

Marketing in the moment is seen as retail marketing’s next big evolution. By definition, it’s the ability to merge customer data and contextual data points (location, history, current activity, time, environmental cues, preferences and loyalty status) to deliver content (a personalised offer, promotion or message) to an individual shopper at the optimal moment to influence a purchasing decision.

Eagle Eye research demonstrates that consumers can be motivated by loyalty program initiatives that reach them when they’re most likely to respond and take action on an offer. In fact, 71 per cent of surveyed consumers say that if they got an alert about a promotion for a product whilst in the store – that is, in real time – they would either consider buying it or would consider the information helpful.

The Marketing in the Moment model relies heavily on context-specific data and the ability to leverage it in real-time to achieve that outcome. The first consideration remains the same, who the individual shopper is and what is known about them (e.g., when that shopper prefers to receive content). This profile and preference data can be harvested from retail loyalty program profiles and interactions.

Marketing in the Moment then factors in a range of contextual data from various sources, surrounding that individual shopper, including first-party data provided by the shopper through the loyalty program or transaction history, environmental data like current weather and seasonality, location data and any other variables that are relevant to engaging with the shopper. With this information, grocery retailers can deploy offers and communications at the exact same time they are most relevant, useful and welcomed.

But many retailers are lagging behind consumers in recognising the efficacy of context-based marketing. This is likely due to a reflection of their legacy technology limitations – not an entrenched attitude toward the approach. Regardless, only about a third (36%) of retailers surveyed say deploying location-based offers would make their promotions more effective.

With access to the technology that makes Marketing in the Moment possible, grocery retailers can seize the initiative and leverage their loyalty program framework to engage with customers in ways that have an immediate and tangible effect on sales.

3. Gamification:

Whilst contextualised marketing is hyper-targeted to the moment, gamification introduces a different and variable element to loyalty program engagement. Gamification provides a high degree of interactivity, which increases the time consumers spend engaging with their loyalty programs. It works because consumers love games, and loyalty programs are ideal for combining games and savings.

In APAC, specifically, gamification is an effective way to increase membership in a loyalty program. In fact, 74 per cent of APAC consumers say they would or already do participate in games, contests or challenges through a company’s loyalty program or app.

Despite this, however, only 60 per cent of loyalty programs they belong to actually offer games, contests or challenges. This gap represents an opportunity for APAC grocery retailers to expand their gamification initiatives to boost loyalty program engagement. When deployed at scale and utilising cutting-edge technology – think AI and machine learning to automate the creation, execution and measurement of game-like challenges – gamification can be a loyalty game-changer.

Unfortunately, retailers find themselves behind this trend. Less than a quarter (21%) of companies polled think gamifying the shopping experience is what consumers respond to most. They also ranked gamification last in perceived importance to consumers. Only 23 per cent plan to introduce gamification elements into their loyalty programs in the next three to six months. Only when retailers overcome this short-sightedness will they be able to take advantage of this opportunity.

The best part of gamifying the loyalty program experience is that it doesn’t necessarily mean overhauling the entire loyalty program. Solutions exist that can layer gamified elements on top of an existing loyalty platform, meaning they can be integrated without disruptions or significant implementation time or resources.

Seizing the great grocery loyalty opportunity in APAC

The good news is, many retailers are ready to seize the loyalty-related opportunities available to them. Many loyalty program professionals surveyed indicated a willingness to invest in scalable, feature-rich loyalty program technology. In fact, 82 per cent say their companies have invested in their loyalty program’s technology during 2022, and 80 per cent plan to do so in 2023.

In the future, grocery retailers must prioritise alignment between their loyalty technology provider and the capabilities required. Executing personalised offers at scale, Marketing in the Moment and gamification of the loyalty program experience requires a tight orchestration of inputs and outputs, alignment across three key stakeholders (the customer, the retailer and CPG brands) and significant investments in resources and technology.

Even major global retail brands that have implemented next-generation loyalty strategies, like Woolworths in Australia and Asda in the UK, found it burdensome to dedicate internal resources to developing these capabilities and turned to a third-party technology provider to improve their systems and platforms. This illustrates how critical it is to find a partner like Eagle Eye with the appropriate tech stack, skill set and experience in developing scalable, enterprise-level solutions.

To take advantage of these opportunities, retailers should place an increased focus and investment on personalisation and look for solutions that can quickly scale their promotions, improve customer interactions and deliver measurable and profitable returns. By demonstrating value, personalising loyalty experiences at scale, marketing to customers in the moment and incorporating gamified interactions, grocery retailers can solidify their relationships with their customers for years to come.

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ABOUT EAGLE EYE

Eagle Eye is a leading SaaS technology company transforming marketing by creating digital connections that enable personalised performance marketing in real time through coupons, loyalty, apps, subscriptions and gift services.

Eagle Eye AIR enables the secure issuance and redemption of digital offers and rewards at scale, across multiple channels, enabling a single customer view. The Group creates a network between merchants, brands and audiences to enable customer acquisition, interaction and retention at lower cost whilst driving marketing innovation.

The Company’s current customer base comprises leading names in UK Grocery, Retail, Leisure and Food & Beverage sectors, including Asda, Sainsbury’s, Tesco, Waitrose and John Lewis & Partners, Virgin Red, JD Sports, Pret A Manger, Greggs, Mitchells & Butlers, PizzaExpress; in North America, Loblaws, Shoppers Drug Mart, Southeastern Grocers and Staples US Retail and in Australia & New Zealand, Woolworths Group and The Warehouse Group. In January 2023, the Group acquired France based Untie Nots, a personalised promotions business, adding Carrefour, E. Leclerc, Auchan and other leading brands to its European customer base.