Published on the 10/07/2023 | Written by Jonathan Reeve

From marketing in the moment to gamification, it’s all about the customer…

Australian and New Zealand grocery retailers are under pressure as consumer behaviour continues to evolve in response to macroeconomic stressors. The current landscape, wrought with cost-of-living increases, soaring interest rates, a looming mortgage crisis and climbing rents has forced consumers to become more discerning in their spending habits. As a result, grocery retailers must swiftly adapt to this changing landscape or risk being left behind.

Importantly, as prices continue to spike at the grocery store, consumers are looking to save money at all costs. Eagle Eye’s recently released Grocery’s Great Loyalty Opportunity reveals that 61 percent of consumers say they use various money-saving techniques when grocery shopping, a figure that is increasing over time.

This means now is the perfect time for retailers to invest in technology that enables them to help showcase the value of their loyalty programs to current and potential customers.

APAC consumers see grocery loyalty programs as a means to unlock tangible value, prioritising it over status, perks or earn rewards.

Each of these areas below are where most grocery loyalty professionals agree they can improve. And each can potentially have a significant impact on loyalty participation, offer acceptance rates, engagement levels and ultimately, revenues and profitability.

Advanced personalisation

One of the key drivers of successful grocery loyalty programs is advanced personalisation. By leveraging customer data and individual preferences, grocery retailers can tailor their offerings on a one-to-one level, creating a much more engaging and satisfying shopping experience.

Of course, personalisation at scale is traditionally difficult for grocery retailers to achieve, especially for those that rely on legacy technology. Despite recognising that personalisation tactics can make their promotional and loyalty strategies more effective, nearly 31 percent of grocery loyalty program managers admit that delivering personalised offers is their biggest challenge.

When asked what could improve the efficacy of their loyalty program’s current promotional strategy, program managers cited the ability to deliver offers or promotions to customers when they’re most likely to be used/redeemed (55 percent), the capability to match the right offer to the right customer (53 percent) and customising offers based on past purchasing behaviours (50 percent). Each of these is integral to a true personalisation approach.

With the right technology and partner, retailers can take advantage of the personalisation opportunity and deliver those core capabilities.

Marketing in the moment

Marketing in the moment is seen as retail marketing’s next big evolution. By definition, it’s the ability to merge customer data and contextual data points (location, history, current activity, time, environmental cues, preferences and loyalty status) to deliver content (a personalised offer, promotion or message) to an individual shopper at the optimal moment to influence a purchasing decision.

Eagle Eye research demonstrates that consumers can be motivated by loyalty program initiatives that reach them when they’re most likely to respond and take action on an offer. In fact, 71 percent of surveyed consumers say that if they got an alert about a promotion for a product whilst in the store – that is, in real-time – they would either consider buying it or would consider the information helpful.

The marketing in the moment model relies heavily on context-specific data and the ability to leverage it in real-time to achieve that outcome. The first consideration remains the same, who the individual shopper is and what is known about them (eg, when that shopper prefers to receive content). This profile and preference data can be harvested from retail loyalty program profiles and interactions.

Marketing in the moment then factors in a range of contextual data from various sources, surrounding that individual shopper, including first-party data provided by the shopper through the loyalty program or transaction history, environmental data like current weather and seasonality, location data and any other variables that are relevant to engaging with the shopper. With this information, grocery retailers can deploy offers and communications at the exact same time they are most relevant, useful and welcomed.

But many retailers are lagging behind consumers in recognising the efficacy of context-based marketing. This is likely due to a reflection of their legacy technology limitations – not an entrenched attitude toward the approach. Regardless, only about a third (36 percent) of retailers surveyed say deploying location-based offers would make their promotions more effective.

With access to the technology that makes marketing in the moment possible, grocery retailers can seize the initiative and leverage their loyalty program framework to engage with customers in ways that have an immediate and tangible effect on sales.

Gamification

Whilst contextualised marketing is hyper-targeted to the moment, gamification introduces a different and variable element to loyalty program engagement. Gamification provides a high degree of interactivity, which increases the time consumers spend engaging with their loyalty programs. It works because consumers love games, and loyalty programs are ideal for combining games and savings.

In APAC, specifically, gamification is an effective way to increase membership in a loyalty program. In fact, 74 percent of APAC consumers say they would or already do participate in games, contests or challenges through a company’s loyalty program or app.

Despite this, however, only 60 percent of loyalty programs they belong to actually offer games, contests or challenges. This gap represents an opportunity for APAC grocery retailers to expand their gamification initiatives to boost loyalty program engagement. When deployed at scale and utilising cutting-edge technology – think AI and machine learning to automate the creation, execution and measurement of game-like challenges – gamification can be a loyalty game-changer.

Unfortunately, retailers find themselves behind this trend. Less than a quarter (21 percent) of companies polled think gamifying the shopping experience is what consumers respond to most. They also ranked gamification last in perceived importance to consumers. Only 23 percent plan to introduce gamification elements into their loyalty programs in the next three to six months. Only when retailers overcome this short-sightedness will they be able to take advantage of this opportunity.

The best part of gamifying the loyalty program experience is that it doesn’t necessarily mean overhauling the entire loyalty program. Solutions exist that can layer gamified elements on top of an existing loyalty platform, meaning they can be integrated without disruptions or significant implementation time or resources.

Woolworths: an Australian grocery game-changer

Prominent Australian supermarket chain Woolworths has been at the forefront of customer loyalty, continuously pushing boundaries and setting the standard for others to emulate. In fact, its dedication to customer-centric initiatives has recently been recognised globally at the International Loyalty Awards.

Taking home “highly commended”, Woolworth’s Everyday Rewards, powered by Eagle Eye, was recognised for Real-Time Loyalty — a new offer and loyalty management system that enables connected, personalised and seamless experiences for all 14-million and counting members.

This success is only further complemented by the remarkable participation of more than a quarter of a million people in Woolworths’ Everyday Extra subscription program. The figure is even more impressive considering the program hasn’t been widely advertised. It’s grown largely via word-of-mouth referrals and recommendations in Facebook groups like ‘Woolworths Rewards Enthusiasts’.

Woolworths’ subscription model is a win with its super fan customers because they receive value that far exceeds the fee paid. At the same time, Woolworths comes out on top by obtaining a higher share of the customer’s spending.

Unlike most other retail subscription programs, Everyday Extra focuses on recurring benefits to in-store rather than online shoppers. For an annual fee of AU$70, subscribers receive benefits such as 10 percent off one in-store shop each month at BIG W and Woolworths Supermarkets as well as Extra Perks such as complimentary products from the local store.

The 10 percent discount may encourage customers to consolidate their spending with Big W and Woolworths, whilst Extra Perks create a buzz on social media as subscribers have fun comparing their latest free products.

The future of loyalty innovation is exciting

APAC consumers see grocery loyalty programs as a means to unlock tangible value, prioritising it over status, perks or earn rewards with other brands. It’s clear that if your loyalty program fails to deliver on the value proposition, shoppers will disengage.

This is an opportune time for A/NZ grocery retailers to leverage the right technology to focus on effective offer delivery and management, tailored promotions integrated directly into their loyalty programs and more relevant and interactive loyalty platform experiences.

About the author

Jonathan Reeve is vice president APAC for Eagle Eye, a role which sees him helping APAC businesses develop and implement digital marketing programs to drive customer acquisition, interaction and retention. He’s also the author of Retail’s Last Mile: Why Online Shopping Will Exceed Our Wildest Predictions.