Are you loyal to a particular grocery store? What are you loyal to?
I’ve been a loyal Oakland A’s fan since I was a young boy back in 1968. Since then, there’s only been one year where I didn’t make the hour-long drive to their ballpark to see a game and I now go to Spring Training every year. Most of us are loyal to a team, a cause, our friends. Many of us can also call out our favorite stores we regularly shop at. What makes us loyal to a particular grocery store?
Grocery Store Loyalty
A recent article in Food Dive references a new Food Marketing Institute (FMI) report on shopper loyalty. The article states that “most grocery shoppers believe they are loyal but do not behave in a loyal way because their needs are not being met by their primary grocery store. Only 9% of consumers shop at only one store and about 7% spend more than 90% of their budget at their primary grocery store.”
Let me repeat that. Only nine percent of consumers shop at only one store. Only seven percent spend most of their budget at one store. If you’re a grocer, that’s leaving a lot of money on someone else’s table.
Loyalty Pays Dividends
Loyalty pays dividends too. According to FMI, “An effective loyalty strategy can yield far more benefits for brick-and-mortar stores than just added sales. As customer preferences change and e-commerce players pull in more market share, providing shoppers with everything they need, including a memorable experience (which can’t as easily be translated via an online purchase) will give these retailers a competitive advantage. In other words, loyalty is perhaps the most effective way to compete and grow in an intensely competitive environment.”
According to the report, “consumers don’t believe loyalty is just a card, program or initiative, but rather the effort to satisfy their needs better than the competition. If retailers can satisfy those needs, shoppers will consistently allocate more of their food budget and time to the retailer.”
It’s hard to argue with that. If a business can satisfy customer needs better than a competitor, customers will return and that’s how you build grocery store loyalty.
According to FMI, customers are searching for better, higher quality products and a breadth of assortment. Formalized grocery store loyalty programs have their place, however, the combination of store cleanliness, friendly cashiers and a variety of high-quality fresh produce means more to customers than loyalty reward points.
Fresh produce (and meats) are what drives many customers to shop at a particular store. I spend probably 90% of my weekly food budget on those items. I once went to a discount grocery store to buy some broccoli. There were about three bunches in the bin. (A bad sign to begin with.) I picked one up and it went limp in my hand. Fresh broccoli shouldn’t do that!
Why did that broccoli go limp? It ran out of shelf-life. Just like the raspberries that turn to mush in your refrigerator the day after you bought them. The product then goes into the garbage leading to waste and unnecessary expense.
Grocery Store Loyalty is Related to Freshness Management
Solving the food spoilage and waste problem means understanding the cause of reduced shelf-life, which is attributed to poor freshness management, starting in the field at harvest. When produce is not properly handled from the time it is cut or picked, it’s freshness is immediately curtailed. Fresh produce left in the field for three hours can lose three days of shelf-life. If that’s not managed, it means that product could be shipped to a retailer where it will spoil on the shelf or with the consumer. By properly managing the produce and knowing its dynamic remaining shelf-life from the field to the store, we can prevent this from happening and ensure that the product is always sold to the consumer with sufficient freshness. When customers are thrilled with the freshness and quality of product, they’ll keep coming back and retailers can increase their share of wallet. Zest Labs focuses on the improving the delivered freshness of produce, and helps retailers, grocers and growers optimize for freshness. You can read more about this in our latest white paper Proactive Freshness Management.
When it comes to building grocery store loyalty, in today’s highly competitive retail market, grocers need to ensure that they’re providing quality and consistency. Else, we’ll find another store.
PS: If you’re a grower, that limp broccoli or those mushy berries could be your brand that the consumer rejected. Do you know how your retailer customers are treating your branded product?
PPS: That’s my daughter Caitlyn and me at a recent A’s game. Happy and loyal fans.