Merchants can see a significant lift from the three I’s — interest, intent and in-basket, but some of the practices to achieve that incremental increase are outdated, meaning that merchants are failing to accomplish all possible benefits.
Next-Level Personalization Needed
Many companies offer loyalty and customer engagement programs with some basis in the three I’s but have yet to take that strategy to the next level. Personalized offers, customer-chosen rewards and customized spending thresholds based on shopper data all generate interest and incremental purchases beyond providing offers indiscriminately to all customers.
Highly personalized offers help consumers with their desire to save money on their purchases. Eagle Eye’s Grocery’s Great Opportunity Report found that 61% of consumers say they use various money-saving techniques when grocery shopping more frequently than in years past, with 57% using loyalty program points and discounts to reduce how much they spend. Other techniques for saving money at the grocery store include shopping at discount stores more frequently (46%) and purchasing more private-label items (42%).
This presents an excellent opportunity for grocery retailers to deliver the value their customers crave. Rather than having rigidly defined benefits for behavioral targets, like earning a specific prize or unlocking a discount on a particular product category in return for spending a certain amount of dollars, reward banks give members the ability to choose the most meaningful reward. This creates an incentive structure unique to each shopper, resulting in a more personalized loyalty experience.
Reward banks are the low-hanging fruit of personalized loyalty; they can immediately create a more personalized loyalty experience for customers and members by providing discounts and other offers that they value. Companies offering these programs are rewarded as well. They receive customer data and richer insights into customer purchase behavior. But beyond that, merchants that engage in the latest strategies for the three I’s also enjoy increased customer spending, improving revenues and profits.
Base Rewards on Purchasing Habits
Offering rewards based on purchase habits and other shopper data (such as when grocery purchases are made each week) generates interest in the discounts and other offers.
A customer or loyalty member displays intent by saving an offer to their digital wallet, activating a reward through their loyalty app, or even playing a game or participating in a challenge integrated into their loyalty program.
When a purchase is made or an offer redeemed, that’s denoted as “in-basket” and represents the spend lift generated by the personalized loyalty initiative. Merchants can track, recognize and reward this activity, creating a positive self-reinforcing cycle.
Leverage Digital Capabilities
With digital capabilities facilitating real-time engagement with the customer in the store via mobile as well as online, these techniques can be used to deliver personalized and measurable marketing at any point where it may be relevant during the shopping trip.
The benefits, as identified in another Eagle Eye analysis, include a 16% average basket uplift with personalized offers.
The data for personalization can be easily collected by involving customers in a loyalty program. Our research shows that 65% of new loyalty program members transact, while nearly a third (30%) make two or more purchases.
Final Thoughts on the 3 I’s
By focusing on the three I’s — interest, intent and in-basket- a merchant can drive additional customer spending, leading to greater incremental sales that will result in additional revenues and profits.
Using rewards banks that offer value customers want helps drive interest. Past shopping behavior helps predict shopper intent. By leveraging rewards banks and shopping data, merchants will help motivate the shopper to put more items in-basket, helping to drive additional spending. Tracking, recognizing and rewarding this activity will create a self-reinforcing cycle.