Retail: What is a supermarket loyalty campaign?
You might be familiar with the term “supermarket loyalty campaign” in retail. Or perhaps you’ve heard of “short-term loyalty programs”, “reward programs” or “collectible promotions”. In essence, these four terms all refer to the same retail marketing concept.
So, what is a supermarket loyalty campaign?
Wouter Aalberse, Commercial Director at UNGA, answers frequently asked questions, explains the meaning of “supermarket loyalty campaign”, and offers practical applications for retail marketers.
1. How would you define loyalty campaigns to someone who has never heard of them?
Wouter Aalberse: A loyalty campaign is an engaging tactic that supermarket chains use to gain better ROI from their marketing strategies whilst building brand equity and loyalty.
There’s no rule when it comes to the duration of a campaign. Depending on the goal and the chosen mechanics, it can be rolled out for a few weeks or even months.
During this period, the loyalty campaign connects grocery retailers with shoppers and direct them to supermarkets. Most importantly, they contribute to winning market shares and strengthening customer loyalty over the years.
2. Speaking of mechanics, what are they? How does a supermarket loyalty campaign work?
Wouter Aalberse: This varies from one campaign to another, but the key to success lies in customer rewards. A loyalty campaign is all about rewarding shoppers for their purchases and their loyalty.
In a nutshell, during a campaign, customers who spend a certain amount on groceries are eligible to receive a reward. In instant reward campaigns, they are rewarded immediately as they pay at the register. In a redemption campaign, they collect stamps at the register which they can later redeem to get bigger rewards.
These are the two mechanics behind the most popular supermarket loyalty campaigns. The good thing is that they are fully customizable to retailers’ goals. So, it is also common to design hybrid campaigns that combine these mechanics in order to offer the best of both worlds.
Just know that no matter the type of loyalty campaign you go for, the common denominator is collectability. Actually, a supermarket loyalty campaign is often referred to as a ‘collectible promotion’ because customers can collect up to 20, 30, or 40 rewards. This gamification feature is what makes loyalty campaigns so engaging and ROI driven.
3. What rewards do retailers offer during a loyalty campaign?
Wouter Aalberse: The rewards are very strategic. The best way to decide on what to offer your customers is to ask yourself, “What customer segment do I want to aim for? And what would delight them?”
When retailers focus their efforts on families with kids, for example—which is usually why they turn to UNGA—kid-friendly Intellectual Properties (IPs) or popular licenses among families are very likely to pop up. They are the best customer magnets, let’s put it that way! Little Shop, Little Garden, Little Chefs, or Bricks, are popular IPs in grocery retail, known to immediately catch shoppers’ interest.
So for family-centered loyalty campaigns, you will see rewards such as toys, games, collectibles, stickers, cards… The list of rewards is pretty big. This makes loyalty campaigns a great tactic to repeat several times a year or at least once every year.
4. What makes supermarket loyalty campaigns so different from traditional loyalty programs?
Wouter Aalberse: From experience, I can say that retailers now increasingly run loyalty campaigns because they are a different, unique approach to customer loyalty. With many retailers, we’ve rolled out two, three, and sometimes four editions of some campaigns due to popular demand. Little Garden at New World in New Zealand and Little Shop at Marks & Spencer in the UK, to name a few, perfectly illustrate that. Customers create positive memories through playful and fun experiences and that’s the key driver of emotional loyalty.
Supermarket loyalty campaigns are also a fun and impactful way to communicate about brand values, sustainability, and CSR initiatives. The rewards and campaign activation together have the power to spread strong messages. They offer retailers a chance to align with consumers’ expectations and requirements. For example, consumers are increasingly environmentally conscious, and retailers care about that. So at UNGA, we are producing more environmentally friendly campaigns every year. We have sustainable solutions available for all our campaigns, and shoppers love when retailers choose to take the sustainability road.
One important thing to note is that loyalty campaigns offer more than standard supermarket promotions or traditional loyalty programs. They stand out in a marketing strategy because they deliver ROI. They represent a huge opportunity to drive more footfall and boost sales.
If you think winning key sales periods is critical in the battle for market share, especially in the food and grocery retail industry, then you’ll want to try loyalty campaigns because they have the power to lead you there.