In several ways, the U.S. is more advanced in its grocery loyalty marketing efforts than Europe, according to Rick Swinkels, VP of Global Customer Loyalty at grocery conglomerate Ahold—but “Europe is catching up.”
Ahold has a clear view into the nature of loyalty marketing in those regions. Based in Amsterdam, Ahold owns stores in the Netherlands, Belgium, Germany the Czech Republic, and the U.S. (including Giant Food, Stop & Shop and Peapod). As part of the “catching up,” Ahold has transferred some of the strategies used by American stores to its European brands.
“For over 20 years, our Dutch operations used an identifier to get discounts on your grocery shopping,” Swinkels says, “but we never used the data. We didn't have any personal promotions.” On the other hand, Ahold USA stores had considerable experience with personal promotions. “We had lots of experience and heritage in analyzing data, working with insights, and integrating data into daily decision-making,” says Swinkels. “Also in the U.S., we had lots of experience with the gas programs and how having loyalty programs really made a huge difference.”
To benefit from that experience, “Three years ago, we brought all that knowledge and expertise to the Netherlands, where we implemented personalized promotions,” and concentrated on knowing and understanding customers so decisions would be made on insights.”
First, says Swinkels, “we needed to create focus, because retail is changing, and we wanted to be market leaders in the regions where we operate. We created a central structure to make a real difference and become world-class experts in loyalty. We started by defining how we see loyalty. We wanted to be the place where customers shop most or most frequently, and we wanted our customers to recommend our stores to family and friends.”
Other differences revealed by comparing American and European commerce, and noted by Swinkels:
- The European customer is less influenced by programs and more by price and quality, whereas the U.S. customer is more demanding in terms of service.
- The U.S. customer is much more accustomed to loyalty programs—in part because there are simply more programs.
- The U.S. customer is much more aware of the benefits in participating in loyalty efforts. Greater participation leads to more data, meaning that U.S. customer behavior is much more influential on programs.
- Though technology related to shopping—use of mobile and of RFID, for instance—is better in the States, it is used more in Europe. Higher mobile penetration is one factor.
- “Private labels are more of a loyalty driver in the Netherlands and other countries than in the U.S. Private-label products are more closely tied to the store brands, and themselves drive traffic to those brands. This is in part because the retail landscape is less homogenous than it is in the U.S. “The differences between American retailers are smaller than the differences between retailers in Europe.”