Why You Need Loyalty Campaigns in Your Supermarket Marketing Strategy
The retail industry is highly competitive. Grocery retailers are on the constant lookout for ways to earn and keep customer loyalty. Around 75% of customers, it has been found, actually favor businesses that offer them rewards, and more than 70% are more likely to recommend a brand that offers them a good loyalty program. In other words: rewarding customers for their purchases should be part of your supermarket marketing strategy.
However, too many loyalty programs in grocery retail are either outdated or ineffective. Why? Mostly because they focus exclusively on transactions. In light of this, retailers are now implementing more short-term loyalty programs (also known as ‘loyalty campaigns’ or ‘collectible promotions’) to better surprise and delight their customers. In only a few weeks’ time and with gamification mechanics, these campaigns offer experience-focused rewards to shoppers and add great variety to mostly point-based loyalty strategies.
So, yes, as a creative agency specializing in kids’ and families’ loyalty, we are obviously rooting for loyalty campaigns. But why should you do the same? If you’re not already crafting at least the occasional loyalty campaign as part of your supermarket marketing efforts, here are four things to consider.
- Loyalty campaigns increase your brand awareness
- Loyalty campaigns deliver ROI: drive up your footfall and sales
- Loyalty campaigns nurture long-lasting relationships with customers
- Loyalty campaigns fuel your 360° supermarket marketing strategy
1. Loyalty campaigns increase your brand awareness
Supermarket loyalty campaigns, also called collectible promotions, are famous for featuring popular themes. They often include famous and trending licenses that have the power to pull consumers to supermarkets, especially kids and families – the customer segment UNGA specializes in.
When custom-molded to a specific audience, these small rewards – games, toys, and playful products for families – generate a lot of buzz among shoppers. They create memorable experiences for customers, either in the store while collecting the rewards or at home while unwrapping and playing with them. Loyalty campaigns are, thus, a great opportunity to build hype around your supermarket.
In other words, a trending collectible promotion attracts both existing and new customers and increase your brand awareness. Happy customers will spread their enthusiasm about their favorite loyalty campaigns happening in their local supermarkets, which will captivate their close ones as well. According to Nielsen, 92% of consumers actually believe their friends and families more than advertisements. This means that through word-of-mouth and social media, customers will invite others to participate in the campaign, not only generating brand awareness but also driving engagement.
2. Loyalty campaigns deliver ROI: drive up your footfall and sales
Loyalty campaigns help retailers boost their sales and win over key periods during the year. Customers’ curiosity and excitement for a campaign usually drive more traffic to stores for weeks, which gets converted into sales uplift for grocery retailers.
Campaign mechanics are the biggest reason for this. Customers, indeed, spend at least the minimum amount required to receive an instant reward or collect stamps to redeem bigger rewards. Plus, customers tend to commit to the campaign for its entire period so they can collect more rewards, which positively influences their shopping frequency.
In addition to the rewards, retailers can also offer customers the opportunity to buy merchandise related to the campaign theme. This allows merchandise to appear as “wish items” to make the customer’s collection complete. Simply put, loyalty campaigns also drive growth through cross-selling.
Some campaigns also involve supplier funding. These are particularly interesting for grocery retailers: they often pay for themselves while bringing huge brand exposure to both retailers and participating brands. Supplier funding makes loyalty campaigns strong ROI-driven marketing tactics.
3. Loyalty campaigns nurture long-lasting relationships with customers
As UNGA has pointed out before, loyal customers push sales up and are your top advocates. It is then extremely important to reward these customers for their engagement, purchases, and loyalty to your brand. This will only strengthen the relationship over time.
The gamification mechanics involved in collectible promotions appeal to customers; they are inviting. Excited by the idea of completing a collection for free, customers will engage in the campaign, and engagement is key for building long-lasting relationships.
Furthermore, emotion is one of the strongest drivers of loyalty. Getting customers emotionally attached to your brand can lead to the most profitable behavior and influence customer spend, loyalty, advocacy, and customer lifetime value. In this sense, loyalty campaigns, their mechanics, and their rewards are known for generating multiple emotions in all generations: surprise, delight, and nostalgia.
Moreover, since loyalty campaigns can be personalized to retailers’ brands, they offer an opportunity to communicate your brand values. When your values align with your customers’, loyalty campaigns contribute to strengthening your bond.
4. Loyalty campaigns fuel your 360° supermarket marketing strategy
A loyalty campaign consists of a complete marketing tactic that can be rolled out through many channels. With only one loyalty campaign or collectible program, you can:
- Activate the campaign online by pushing engaging content on social media and your website to drive web-to-store traffic;
- Involve PR and influencers to build awareness about your brand and the value you bring to your customers;
- Execute the campaign in-store and use POS display and other tactics to encourage engagement and sales;
- Organize events such as swap days that will help you connect with customers throughout the campaign.
As IGD shows, shoppers’ expectations and technology are changing quickly. They want to easily shop both online and offline. So with the rise of e-commerce and grocery delivery, retailers have to rethink their marketing strategies and go digital, a direction that loyalty campaigns already take.
Remember: you want your future supermarket loyalty strategy to focus less on transactions and instead bring real value to your customers. You also need your marketing efforts to deliver ROI while building your brand and customer loyalty.
What will help you do that? Loyalty campaigns.