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State of the Industry: The New Customer, New Loyalty

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It’s been a long time since we were clipping coupons from the Sunday paper to save a few dollars on groceries. We were content to clip our coupons while reading the paper until the loyalty card came along, acting as a new friend to us consumers. Its convenience made us feel like we received the best possible savings when we left the store, and retailers believed they were instilling customer loyalty. But what recent customer activity and frequency rates are telling marketers is that consumers are seeking deals anywhere they can find them and aren’t as loyal to the grocers and retailers as they thought. The whole loyalty game has been flipped on its head; there is a new consumer in the wild and a new technology has emerged, feeding the beast.

The fall out came as consumers began to rack up these cards on their key chains and fill their wallets; though seemingly taking off, the whole sentiment of loyalty went out the window. Consumers are not loyal to a single grocer or retailer but rather loyal to the savings they’re finding at the store on the way home from the kid’s soccer practice, not necessarily where they’ve used their loyalty card so many times before. According to the National Center for Data Mining, over half of loyalty program members are inactive, and this number is growing. While retailers boast about increasing membership, customers have moved, switched their grocery store or lost their card. The reasons could pile up as high as the stack of loyalty cards they have on their kitchen counters.

 

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