The Eagle has landed on a new reward program, and it’s got omnivore tendencies.
Photo credit: KITAY
That’s the takeaway from the newly re-launched loyalty program by Giant Eagle, a supermarket chain with roughly 200 locations. The relaunched program, called fuelperks+, enables members to engage with the brand in expanding ways. They can earn and redeem points on fuel and pharmacy, gift cards and dry cleaning. They can keep track of their rewards on a new app. And they can use the program in store or online.
Really, it’s similar to what many major reward programs offer, but it is evidence of a key necessity to retail survival: If a merchant wants to generate enough enthusiasm to achieve maximum reward program participation — and the necessary data insights to support it well — then it has to think omnivore as well as omnichannel.
That means feeding all consumer appetites, from the demand for simplicity to flexibility.
Competition Hungry for Grocery Dollars
And supermarkets shouldn’t wait. Shoppers have no shortage of menu options when it comes to filling their grocery lists.
Mass merchants, dollar stores and fuel stations are all expanding their food offerings to include prepared eats and healthier fare. A Dollar General store in Nashville, Tenn., sells groceries, coffee and other grab-and-go foods within easy access of Vanderbilt University students.
In other parts of the country, European giant Lidl is penetrating major markets, causing rival Aldi to boost its selections, and Amazon is increasing its online food options, already plentiful, through its Whole Foods buy.
All of this leaves traditional supermarkets scrambling for ways to stand apart. They’re investing in meal kits, online ordering and “food theater” attractions such as niche eateries. And many, including Giant Eagle, are looking toward reward programs.
Supermarkets Need Loyalty
The timing is certainly right. A surge in supermarket mergers has resulted in fewer grocery reward programs against which to compete, so upgrades are more likely to get noticed.
The number of U.S. supermarket reward memberships declined by 24% from 2014 to 2016, to 42.4 million, according to the 2017 COLLOQUY Loyalty Census. That follows a 2% decline from 2012 to 2014.
With so many reward programs folding, members are forced to join other programs, which can represent a crucial friction point. If something goes wrong — if the offers are not accurately personalized or the perks are not relevant — shoppers may turn to another chain.
This means that in order to maintain shopper interest, Giant Eagle’s new program features will need to address specific shopper preferences across all touch points — at the moment of interaction. There are just too many other nontraditional food options out there, despite the narrowing number of supermarket chains.
Keys to Winning Shopper Appetites
Which is to say: Think differently. One of the key challenges of boosting shopper engagement through loyalty programs is they are just so prevalent. Shoppers expect them. Standing apart, therefore, will require a sharp shift in very basic applications. Drawing on my decades in the loyalty industry, I suggest three:
1. Remember who serves who. For years, supermarkets tended to limit their reward programs to being discount vehicles. Members got access to special promotions, but the engagement efforts ended there, essentially turning them into coupon programs. In order to generate loyalty, loyalty programs should serve as extensions of the parent brand, meaning all features and rewards answer to the voice and mission of that brand. This is key to an omnichannel strategy as well — the language and tone should be consistent from aisle to app, and the promotions should reflect that. In-house, the reward program should be viewed as a company-wide endeavor. Its insights should support all departmental strategies, from store location to merchandising. Likewise, all departments should have some input into program operations.
2. View services as food groups. Shoppers yearn for more pleasure in their grocery trip, and plenty of rivals are stepping in with enough service options to duplicate the food pyramid. Established grocery chains with reward programs have one important edge: They’ve been collecting shopper data for some time. Those insights could determine which services their shoppers would most likely value, such as ordering online or home delivery. Supermarkets shouldn’t just rush into a service because their rivals have, however. They should first analyze the data (or hire a third party to do so) to establish what specifically shoppers find beneficial about such services, and why they’d choose one over another. In-store features, from coffee bars to in-aisle offers sent via an app, may appeal to some shoppers more, especially during certain times of day.
3. Heat up the redemption experience. Speaking of time, retailers should know their loyalty programs are always on the clock. When program members are about to redeem or pay, that program is on double time. The redemption experience should be packed with random small surprises, such as bonus discounts or chances to try new services for free. And for a real surprise-and-delight reaction, the brand can offer expedited rewards (“We love you so much, we’re giving you next month’s reward today!”). However, supermarkets should be mindful that shoppers have different expectations at different touch points. If a customer is using an app, a push notification of an unexpected reward will likely delight her. If she is in the self-checkout aisle, she is more likely to be focused on the next task and less interested in promotions.
The shopper has many, many needs to be sated. This hasn’t changed in generations. What has changed are the ways shoppers can be satisfied, thanks to the onset of integrated shopping experiences enabled by omnichannel strategies. But supermarkets shouldn’t confuse reward programs with penchants; they should concentrate first on what the consumer seeks and then design the program around it. That alone should put meat on the bones of any strategy.
