What is Supermarket loyalty program in South Africa (RSA)
Supermarket loyalty programs is a strategy that allows the seller to attract new customers, retain regular customers, increase income from purchases made by customers.
The first loyalty programs were introduced by American retailers at the end of the 18th century. They offered loyal customers copper tokens for purchases. The customers could exchange accumulated tokens for discounts then. In the 19th century, cheaper brands came into use.
In the 1990s, supermarket chains offered club cards to customers, allowing consumers to save on purchases by getting a better price on products. Modern successful supermarket loyalty programs
● Give the customer the freedom to choose their own loyalty rewards.
● Offer an attractive reward to the customer.
● Allow access to the program through various platforms, including mobile applications.
For a supermarket, a loyalty program is a way to be of current interest to the customer, to communicate with him, learning about preferences.
Benefits of Supermarket loyalty program
For a supermarket, a loyalty program allows you to learn customer information better on such important parameters as:
Participation in the program allows the company to find out how old its customers are, whether they have children, and what sex they are.
Due to the loyalty program, the supermarket learns about the area customers live in, rent or have their own apartment.
● Purchase structure
Products, customers often spend money on (grocery, baby food, pet food, alcohol, etc.).
● Purchasing behaviour
How often the customer goes shopping, what days of the week he visits the supermarket, how much money he spends, whether he uses ATMs and outlets inside the supermarket, etc.
Importance of Customer Loyalty Program in Supermarket
In the modern world, supermarkets compete not only with similar retail chains but also with online stores and nearby shops. Loyalty program is an important tool for competitive rivalry for a customer.
Studies show that purchasing behavior can combine several types of loyalty:
● price - a customer visits a supermarket that offers a lower price than competitors or favorable discounts;
● location - a retail outlet located closer to home has priority;
● variety of products - the greater the choice of goods offered by the retailer, the more convenient it is for the purchaser to buy everything in one place and reduce the time for shopping;
● receiving benefits or rewards - some customers make purchases in supermarkets that offer promotions in the form of discounts on goods, the opportunity to buy two goods for the price of one, etc.
The combination of different types of loyalty programs plays an important role because it allows the supermarket to:
● change advertising tools, choosing the most profitable at the moment;
● apply a flexible pricing policy, offering discounts on goods that are in high demand;
● regulate products supplies in warehouses, offering loyal customers to purchase certain goods at a promotional price.
According to some studies, in retail, 70% of sales come from 30% of loyal customers. That is why loyalty programs are so important to the success of a supermarket in a competitive environment.
Types of Grocery store reward programs
The points loyalty program is one of the oldest, but still popular and effective programs. The customer receives points (bonuses, chips, etc.) for the purchases made. The more money he spends in the supermarket, the more points he gets.
After accumulating a certain number of points, he gets the opportunity to receive a discount or a physical reward in the form of a product offered by the supermarket.
To be successful, the program must offer rewards that will be attractive to different categories of customers and provide a choice of options for using accumulated bonuses.
Membership cards are a tool that supermarkets have been using since the end of the 20th century. The client receives a card in paper, plastic form or installs a mobile application and uses it to buy goods at special prices and receive discounts on home delivery.
Membership cards are of interest to family customers and shoppers who plan their purchases a week or a month in advance.
These are programs based on the customer’s performance of certain actions for a reward. They showed their effectiveness in retail. The buyer receives a physical card or an application that has a barcode or QR code. After each purchase, the seller stamps or scans the code. The customer is rewarded. Having accumulated a certain number of seals or marks, the buyer receives a reward.
A program that offers rewards to loyal customers when a significant event occurs in the life of a customer, a supermarket, or a brand sold in a supermarket.
Customers participating in the program receive rewards on their birthday, the anniversary of registration in the program, discounts on an important date in the history of the supermarket (opening day of the shop, department, etc.).
Gamification is the use of game mechanics in loyalty programs. The supermarket offers customers:
● Perform a certain action for a reward. For example, find a specific product for a limited amount of time and get a discount.
● Achieve a certain goal and get a reward. For example, collect a certain number of chips.
● Get a discount randomly by purchasing a lottery ticket or participating in the ‘spin the wheel and win’ game.
How to Implement a Customer Loyalty Program in Supermarket
To implement a loyalty program, it is necessary to learn not only the market, but also customers. Answer the questions:
● Who are they?
● What do they buy most often?
● How do they make purchases?
● Do they use additional service programs (online ordering, delivery, etc.) offered by the supermarket, etc.?
With this information, you can create a loyalty program that takes into account the interests of different customer groups.
You can save time and get a ready-made platform for implementing a supermarket loyalty program by contacting mLoyalty.