For today’s consumers — especially younger generations — sustainability is increasingly a priority. They’re willing to change their behaviors (e.g. spending more on sustainable products), but they don’t want to do it alone; they want retailers to take some responsibility, too. The more retailers can support consumers’ desire to live more sustainably, the more loyalty they’ll generate.
Earning this loyalty is more important than ever, given how competitive the grocery industry has become. Shoppers have more options than ever — thanks to new industry standards like curbside pickup, online ordering and home delivery, consumers can easily engage in “grocery hopping,” visiting several stores to complete their routine shopping and taking advantage of each store’s strengths (e.g. freshest produce, lowest prices, best frozen food selection, etc.).
Now more than ever, grocers must fight for every marginal gain in market share they can capture. By weaving sustainability into their brand identity, grocery retailers can meet timely consumer needs while sharpening their competitive edge. Here’s how it’s done.
Give Shoppers the Data They Need to Succeed
Customers need to know grocers can help them live more sustainably, and they need to see it to believe it. At a minimum, this means retailers should stock organic produce, ethically sourced meat products, “free and clear” household products and products with sustainable packaging. But there’s a more powerful, data-driven way to meet shopper demand while staying competitive in the market — one that establishes grocers as true partners in consumers’ efforts to live sustainably.
Advertisement
Modern, app-based loyalty programs engage with customers and serve as a retailer’s front door. They track shopper’s purchases, not only facilitating paperless receipts — a nice detail for sustainably minded shoppers — but also generating personalized coupons based on purchase history. Gamified elements keep shoppers excited and, with free or discounted products as prizes, encourage store visits. Retail media placements help shoppers discover new brands and learn more about the brands they already love. These features are cornerstones of successful loyalty programs and, when leveraged the right way, they directly support shoppers’ sustainability aspirations.
Because loyalty apps connect with shoppers’ purchase history, they can shed light on consumer behavior and illuminate areas for more sustainable choices. Imagine a loyalty app that, when opened, displays a dashboard that lets consumers monitor their sustainable purchase activity. With easy-to-read graphics, shoppers can review the percentage of products purchased that fall within the “sustainable” category or the percentage of “sustainable” dollars spent.
Other helpful features might include a ranking of a shopper’s most frequently purchased sustainable products, a map showing where a shopper’s produce was grown or recommendations of simple substitutions customers can make to improve their sustainable purchase habits.
Grocers can reward shoppers for making sustainable purchases by offering personalized promotions. With gamification, grocers can keep the cycle of sustainability going by offering sustainable products as prizes. Retail media placements can spotlight local and sustainable food producers so that shoppers begin to feel more connected to their communities.
These are just a few ways grocers can use loyalty apps to demonstrate their commitment to help shoppers align with their sustainability values. How can grocers get started if they’re looking to introduce a holistic sustainability strategy like we’ve described? Like so much of today’s business world, the process starts with data.
Building a Data Proficiency (Green)house
If retailers already have a digital loyalty program in place, they likely have most of the data they need to support consumer sustainability. Assuming consumer purchases are already being aggregated, it’s a matter of modifying store metadata so certain items are categorized as “sustainable,” or even given a sustainability score. From there, tech teams can work to build sustainability dashboards that analyze shoppers’ purchases of those items. Stores can incorporate new gamified elements that nudge shoppers toward making more sustainable choices and build new promotions to highlight local or ethically sourced products.
If grocers don’t yet have a digital loyalty program, it’s never too late to get started. First, retailers will need to get their data management in order. Aggregate shopper data should be centralized so all necessary parties can access it in real time without worrying about version control. Then, grocery teams can use advanced tech like AI and ML to analyze this data, identify behavioral patterns and build customer segments to inform personalized promotions and gamification. Finally, grocers can partner with suppliers to activate their retail media network and open new revenue streams.
Here’s the best part: launching the digital loyalty program will greatly benefit all shoppers — not just those who are most concerned about sustainability. Even if shoppers don’t see the value in a sustainability dashboard, they’ll certainly see the value in personalized promotions and discounted products.
Data-driven loyalty programs boost customer engagement, encourage store visits and — perhaps most importantly — signal to customers that the retailer values their continued patronage. Today’s consumers have high expectations for grocers, including convenience, value and — increasingly — sustainability. Through digital loyalty programs, retailers can meet (or exceed!) these expectations by offering digital experiences shoppers can’t get anywhere else.
Anders Mittag is Chief Commercial Officer at Lobyco, a global leader in customer engagement and promotions for grocery retailers. With more than 20 years’ experience in retail technology, Mittag directs Lobyco’s commercial strategy and nurtures its growing community of like-minded retailers. He supports the implementation of loyalty programs across global grocery clients, designing engaging initiatives that increase customer spend and footfall. Prior to helping launch Lobyco, Mittag was SVP of Membership and Loyalty at Coop Denmark, where he was responsible for overall loyalty strategy. He lives in Copenhagen with his family.
