An Opportunity for Loyalty Programs to Help as Customers Overwork Stores – Perspective from Loyalty360 and Members

I am sure we have all seen the massive lines in the stores by now as everyone rushes to stock up on the essentials – including ten packages of toilet paper, more cleaning supplies than you could use in a year, and enough milk and fresh meat to feed the respective school classes that have been quarantined.

Loyalty programs, which sometimes are at the center of great scorn, have a tremendous opportunity to not only elevate their relationships with customers, but also play a pivotal role in the quotidian challenges we have with the Coronavirus outbreak - all while potentially elevating their commitment to corporate social responsibility.

Grocers, such as Kroger (to a great extent), wholesales similar to Costco and Sam’s Club, pharmacies such as CVS or Walgreens, and retailers like Target, have a great deal of transactional, behavioral, and other data (third and first-party) on their customers. They know what you buy, how often, when, and more than likely why you’re buying.

With this data, they have an opportunity to help control the panic buying many grocers are facing, but also improve customer experience and build loyalty in the process. After all, these brands understand my typical buying patterns, and they also know what standard buying patterns look like for others.  

Right now, many retailers are finding themselves in a challenging position, but grocery is classified as an essential business, and its position is perhaps more unique than most brands’. How can those in the grocery industry work to meet skyrocketing customer demands while maintaining loyalty for the time being and best positioning themselves for the future?

“While grocers are focused on meeting new levels of customer demands, it is also important they plan for what’s next,” shared Nicole Amsler, VP of Marketing for Formation. “High consumer expectations present a huge challenge for marketers as consumers seek proactive service, personalized interactions, and connected experiences across all channels. Grocers should leverage their loyalty programs to deliver relevant information and offers on an individual level to reflect both customers behavior and the current climate…grocers should be using what they know about each customer to create real value by sending personalized notifications about back-in-stock items or potential replacements, expanded delivery options, or other changes or promotions that are relevant to each individual shopper.”

In meeting customer demands, an additional challenge for grocers right now as customers flock to stores, is how do you control panicked purchase behavior? Many grocers have had to put limits on certain items such as paper products, cold medicine, cleaning supplies, etc.

There is a balance between limiting purchases and slowing down the checkout process in any matter - so the “checks” for product limits are manually done, if at all. Having partaken in several shopping excursions since the quarantine in Ohio, I have been to the store more times than I wish to admit, and these limits are being broken. I have even taken it upon myself to say something to the people who are still abusing the limit, usually in a joking manner, with terse results.

While limiting the purchase of certain items is not ideal for anyone, maybe instead of limiting purchase to two or three of a specific item, retailers and grocers could be unique stewards of this crisis with a tie to their loyalty program. What if, for example, they were able to limit other customers to a percentage above your “normal” purchase behavior for some time? This could be accomplished tactfully, letting customers know that they are over their “limit” if they attempt to purchase too much of a particular product.

Additionally, in an era of personalization and one-to-one marketing, a focus on digital right now could help brands more successfully meet customers’ needs. For example, if there was an integration with loyalty and customers’ purchase behaviors, brands could send customers reminder emails that you can buy your next bottle of hand sanitizer or package of toilet paper on this date, reinforcing the message through respective channels to help address customers’ fears and building stronger relationships in the process.

Sharing his perspective, Bill Finaldi, Senior Director of Business Development and Strategic Partnerships, IRIS, said, “By definition the term loyalty implies a ‘trusting relationship’ and while the circumstances and fallout of this pandemic are challenging on many levels, the silver lining might lie in the increase of mindfulness in purchase behaviors and the value exchange inherent in the retailer/consumer relationship. Opportunities for retailers to serve and support customers through personalized messaging and deliver offers for products and specialized services that align with the unique needs of their customers and families is central to this situation we are all experiencing.”

Furthermore, there is an opportunity for brands to be proactive managers during the outbreak. While it would be an additional cost to implement this, brands could hold items for certain customers and communicate accordingly. Knowing that I (or someone that would fall into a “high risk” category) have not purchased any of the limited items and that I usually purchase 15 of said items over a specific time period, they could offer a service to hold them for me briefly (ex: until the next day at noon) for a small convenience fee.

For example, “Dear customer, I realize you usually purchase five pounds of ground beef and two packages of toilet paper each week. We have a new truck coming in that will have a few things that you usually buy and are willing to hold them for you.”

Think about the opportunity here. Controlling the panic and providing value and pivoting to a more significant focus on digital – this could help calm the market, as the emotional uncertainty would be lessened considerably.

Bill Finaldi of IRIS continued, “Digital conversion for may grocery chains has been a key strategy even prior to this crisis and many customers have heightened awareness of the need for an alternative to driving to the store for purchases and are likely to be receptive to the value and convenience going digital provides. The overall mutual benefit, retailers will increase their ability to capture and leverage data for targeted marketing and customers benefit from the personalized services and support that are the result.”

A focus on digital, personalization, and loyalty may best set brands up for success during this crazy time, but also in the future as more customers (and even grocers) were shifting toward a digital-first mindset before the outbreak.

There is undoubtedly an opportunity for brands to get creative – offering “bonus” loyalty points for customers who usually use 25 products in a weekly period, and they reduce the usage to 15. Of course, there are challenges with these ideas, as customers would have to use their loyalty card, but by encouraging the use of the program or quickly allowing customers to sign up, brands could support customers and build loyalty now, while setting themselves up for stronger relationships in the future.

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