Supermarkets Ramp Up Loyalty Programs

It’s a good time for supermarkets to focus on customer retention. Their supply chain is currently threatened, so having the right product at the right time is at risk. And the competitive set that sent several grocery chains into bankruptcy this quarter won’t get any easier. To reinforce the need to keep current customers, two major supermarket players have launched new loyalty programs, both taking advantage of the need for personalization.

Southeastern 1,243-store chain Publix announced a new loyalty strategy this week that it hopes will build relationships and strengthen connections with a personalized approach. Club Publix will aggregate digital features, including early notifications of BOGOs and other sales, a branded digital wallet and the option to receive e-receipts. Publix cited research from Salesforce showing 84 percent of consumers say being treated like a “person, not a number, is very important to winning their business.” It also says 74 percent of consumers want companies to understand their needs and expectations.

“We’re always looking for ways to create a more convenient and rewarding shopping experience for our customers that delivers more of what matters to them,” said Publix Vice President of Marketing Mark Irby. “Customers who join the free program will enjoy a more seamless shopping experience, one that’s more personalized to their individual needs and preferences.”

Mid-Atlantic chain Giant (181 stores) has also announced a new reward program. Flexible Rewards will enable customers to earn points for Gas Savings, Grocery Savings and Special Rewards (free grocery items). Customers earn additional points by shopping customized offers featured on Giantfood.com and in the Giant mobile app.

“By giving customers the power to customize their rewards, shoppers can choose rewards that fit their lifestyle every time they redeem,” said Ryan Draude, director of loyalty at Giant. “This launch is the first step toward more rewards for every Giant customer where they feel appreciated for each interaction with us — in store or shopping online. Soon, there will be more ways to earn and redeem points, and exciting partnerships that will include supporting local charities in our communities.”

The new program reignites the debate as to whether loyalty programs actually increase the frequency and recency of customers or simply extend discount pricing. A recent report from Bond Brand Loyalty has shown (in its interpretation) that loyalty continues to work for brands, with positive impacts on advocacy, retention and spend. The Bond report also shows that expectations of loyalty programs continue to rise. “Top programs differentiate and lead by prioritizing the program experience over the end reward itself,” the report says.

Part of those elevated expectations comes from personalization. Consumers expect that when personal data is shared, it will be used to create a better experience for them. Only 2 in 10 members say that they are very satisfied with the level of personalization they get from their loyalty programs. However, when personalization is executed properly there is a 6.4x lift in member satisfaction.

“This year’s report substantiates the experiential elements of a brand’s program as the key to unlocking greater profitability,” said Sean Claessen, chief strategy officer at Bond. “It’s the journey, not just the destination, when it comes to customer loyalty. The experience the program facilitates is what differentiates leaders from laggards. Personalized experiences, elements of game-science and strong brand partnerships — that deliver along the entire customer journey — are what make members more likely to increase spend, stick with and say good things about the brands they do business with.”