Grocers have always been a low margin business, but this poses a greater challenge than ever before when they’re up against a new set of competitors in online services, meal kits etc. and customers whose expectations cannot be met without the help of technology, investments in which must be made with caution. According to MarketWatch, only 47% of grocery shoppers said they shopped at one primary supermarket, down from 61% a decade earlier. With shoppers splitting their dollars between so many different vendors and services, where should grocers prioritize their focus to win their customers’ allegiance? In this blog post, we’re taking a closer look at some strategies and innovations for grocers to consider in order to increase shopper loyalty and stand out from competitors.

Consolidate disparate systems

Like the rest of the retail industry, grocers are using a bunch of different systems to collect customer data, but those systems are disconnected, causing major delays in the time it takes to actually act on that data. Deploying a campaign might take several weeks, which is obviously way too long. They dream of a “real-time” world where it would only take a day or two. The reality is, that a day or two is still not real-time.

Think omnichannel

Smart grocers will provide shoppers the option to choose different types of experiences based on their preferences and lifestyle. Some shoppers still want to be able to go in-store and touch and smell things, while others are all about one-click ease.

Amazon’s acquisition of Whole Foods in June 2017, increased the urgency for grocery chains to develop or expand their ecommerce options. And shoppers have demonstrated that they like having options when it comes to how they shop for food. According to Forbes, online grocery spending is projected to grow to 20 percent of the market, or $100 billion, by 2025. Ecommerce done well requires the right content. This includes well-optimized photos with helpful product descriptions and accurate nutritional information, as well as shoppable recipes and product recommendations.

Omnichannel is about creating consistency between the physical store and online -- as well as any other brand touchpoints through which customers might interact. Not only does being omnichannel make customers happy, there’s a great advantage for brands as well. As Brick Meets Click explains, “Digital tools introduce a great deal of flexibility as to where and when purchase and fulfillment take place. It’s helpful to think of this as cross-pollination instead of competing channels: Online marketing and merchandising may generate in-store sales and in-store marketing and merchandising can spark online sales.”

Personalize the experience

Nearly every grocer is slashing prices and offering discounts. It’s impossible to stand out if you’re using the same tactics as your competitors. Rather, leverage a customer’s previous purchase behavior and data on their habits and preferences in order to send personalized offers and suggestions.

Delivering highly targeted content and experiences helps grocers achieve higher margins, more traffic, etc. For example: by feeding your point of sale data back to a customer’s profile, grocers can push offers and content into the point of sale to enable offer redemption in real time.

Personalization is paramount to delivering a great experience and a profitable loyalty program. Focus on driving incremental value on a per customer basis, as opposed to rewarding existing behavior. Motivate high value behaviors and advocacy in addition to transactions and spend. Align the financial value of benefits to the potential value of each customer to maximize profitability. Table a mobile first and omnichannel approach to create a frictionless experience.

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Reinvent loyalty

The margins in supermarkets are very small, so traditional loyalty programs can end up being money losers. A program has got to be making money for you and driving additional revenue, but it’s not just about that. It’s also about the data that you’re gathering about those customers. You can match up the spending patterns of loyalty program members across categories and be more intelligent about offers that you’re sending.

Loyalty is the outcome of knowing who customers are across all channels at all times, being able to meet and anticipate their needs, and recognizing them for their attention and spend as individuals.

Invest in tech -- but proceed with caution

Grocers will be required to make investments in technology in order to keep up. However, they must be judicious about where they invest their dollars. As HBR explains “One reason is that new tools often don’t save the retailer enough or generate sufficient new revenue to cover their cost. Another is that too many customers simply don’t like them.” Don’t just innovate for innovation’s sake. It’s crucial that these innovations actually address customer pain points.

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