Loyalty Cards & Customer Promotions

Many retailers have discovered the value of loyalty card programs and customer promotions to differentiate and bring customers back to their stores in the hyper competitive supermarket industry. The idea of getting supermarket customers to sign up for a ‘loyalty card’ in exchange for discounts and other incentives started back in the 90’s. The airlines recognized the marketing potential long before with frequent flyer programs.

The ability to identify a customer at the POS and target them has revolutionized the customer experience, allowing the grocer to build a loyal customer base that enjoys these types of inducements. STCR offers services to our customers to help rollout a full blown loyalty card program. These programs typically follow the crawl, walk, run deployment approach, offering an immediate attraction for signing up to get a card and subsequent savings on items if the card is used in the order. However, these programs can develop into sophisticated marketing tools that require a significant level of planning and administration. Other grocers want to advertise a promotion to all customers in an effort to bring more in the door but are unsure how to set it up in their system.

If you are unsure how to proceed with your loyalty program, please call the STCR Support Center at (607) 757-0181 to request assistance. If your question is a “how to” we would be glad to assist you. If your question requires a more involved setup, testing, and implementation, we can assist you with getting quotes on services needed to accomplish the desired promotion. Let us help you take full advantage of your systems ability to promote and bring more customers back to your store.

Winning Shoppers in Turbulent Times

Behind the headlines of the slumping economy shoppers are being forced to make some hard choices every day. What these choices are, how they affect your business, and most importantly, what their choices will be if the economy were to worsen, are the subject of the recent Unilever Trip Management study.

The study reveals the different shopping tactics that different demographic groups employ to navigate this new economy. It tells you how shoppers are planning their shopping, what compromises shoppers are willing to make to stay within budget, and what could spur even more change in shopping behavior.

The bottom line is your shoppers are looking for the same retail experience that brought them to your stores in the past. With the information gathered from this report, creativity and determination, you can maintain and even strengthen your bond with shoppers in uncertain times.

To compensate for rising gas prices half of consumers (49%) are reducing their retail spend, 70% combine shopping trips and errands, and 39% percent stay home more, according to a recent Nielsen study.

“Quick trips” (typically the most profitable trips for grocers since this type of shop is used to save time over money) and “Intermediate Needs Trips” for the three demographic groups studied suggest that shoppers are carefully planning their shopping.

The three demographic groups studied were Low Income, Middle Income and Baby Boomers.

Lower Income shoppers are very smart shoppers. They do their research, prioritize, and make trade offs. They typically start their shopping around the kitchen table in a volume of coupons from newspapers, circulars, and direct mail offers. They show up at their store on or near payday, budgeted cash in one hand, circular in the other. They look for loyalty card discounts and stock up on essentials only if in-store deals make it possible. They focus more on private label value products.

Middle Income shoppers go through a similar though looser routine. They use coupons for higher priced items and meal planning is typically a diversion rather than a budget driven necessity. They have more wiggle room for the impulse purchases. They desire larger economy packs and will continue to purchase name brand products.

Baby Boomer shoppers are considered the been-there-done-that demographic who may collect a few coupons but are more likely to leave them at home. They’ll use a list, more to remind them than to constrain their spending. Gas prices haven’t completely dissuaded them from shopping around a bit for freshness and variety. They’re more likely to stock pile on quality sale items and their favorite name brands. Since most people in this group are empty nesters, decisions revolve around what they want not the kids.

Looking at category loyalty the study showed the top categories consumers will stop buying were Air Fresheners (17%), Beer/Wine (13%) and Soda (11%). The top 5 departments shoppers indicated they would reduce spending on were Deli, HBA, Household Cleaning and Paper Products, Beverages and Meat. These were very similar across all demographics.

Surprisingly, the study showed that even as they’re squeezed shoppers don’t want to give up on product quality and they’ll continue to search out trusted brands across the store. Areas where they would move to private label values were more relevant in Household Cleaners and Paper Supplies.

From the study Unilever provided 10 promotional strategies to connect to how shoppers are shopping:

* Circular tactics built around whole meals will resonate with the growing number of shoppers carefully budgeting and planning their meals
* Sales across multiple quality levels within a category help maintain your store appeal with both brand and loyalists and shoppers are more willing to trade down
* Increase sampling of product across the store can encourage shoppers – especially low income – to make a purchase they had not intended
* Shoppers are already skipping aisles and may do so even more – tempt them to shop all aisles-feature super-low prices on attractive items in every aisle
* With saving minded shoppers increasingly buying big or small, let them know about the different product sizes you offer… consider more value packs
* As shoppers of all types become more proactive in their planning, attract them with complementary product sales – buy a bagged salad, save on your favorite dressing
* Cross promote right at the shelf to stimulate sales in categories shoppers are ready to abandon in tough times – for example, coupons for cookies in the milk section
* With bulk buying for sharing on the rise, showcase “Friends and family” specials on your economy sizes
* Tag products that have a high wellness quotient – two/thirds of adults say health drives their food selection
* Position yourself as a complete one-stop shop for essential categories to draw shoppers cutting back on trips due to high gas prices

Differentiate Yourself

Recently we had one of our customers from the beautiful island of Trinidad visit our corporate office for training. While they were here we took them to other IBM system users to see how they operate their stores. It was an eye opening experience to see things through a different culture and how it relates to the way our customers run their businesses.

While on tour at one of these locations they asked a simple question, “What do you recommend a supermarket owner do to separate itself from its competitors”? Our answer was simply put…

* Know Your Neighborhood
* Specialize
* Merchandise Attractively
* Provide Superior Customer Service

It sounds all so simple yet many owners are caught up in their day to day operations to recognize how to implement these strategies. In this day and age the consumer is empowered to shop anywhere for their products. At STCR we have the opportunity, through supporting hundreds of customers nationwide and Caribbean, to see what works. It really comes down to these four strategies. Not one of those strategies alone can make you successful.

Often the Independent Grocer lacks the resources to implement and manage major changes to their operation due to lack of capital or labor. The ideas listed above do not require much to implement yet will have a tremendous impact on your customer’s perception of your store. What is required to make this strategy successful is a common mission shared with your employees. This mission needs to be consistent and constant. It’s not what you expect; it’s what you inspect.