The rules of retail are changing – and you’re probably tired of hearing about it.
Customer loyalty used to be a given if you were located in a typical suburban area. Shoppers weren’t able to easily access your competitors, and yours was the store that happened to be on their drive home. Now, customers are just a few clicks away from their material desires (including grocery items!), and many industry experts have predicted the fall of brick-and-mortar retailers.
What most have failed to realize is that the radical changes in customer behavior are operating on more of a bell curve than a straight slope. Like nearly every other area of society, consumerism is experiencing a moment of nostalgia, not for the malls of the early aughts or the aspirational department stores of an earlier age, but for the age-old concepts of human interaction and experience.
If brick-and-mortar retailers want to stay in the game, they need to play by their own rules. As a grocer, you need to realize that you can’t compete with the ease of an e-retailer, so it’s pertinent to take a different approach.
That approach needs to be focused on customer loyalty. In 2019, loyalty is the most important currency that a grocer can collect from a customer – and it’s not easy to attain.
The State of Customer Loyalty in 2019
The current state of customer loyalty is murky. While it’s clear that loyalty is more important than ever for brick-and-mortar retailers like grocers (a recent Adobe study noted that the top 10% of your customer base is spending three times more than your average customer — and your top 1% is spending up to five times more) it’s less obvious whether customers have a vested interest in supporting any one retailer consistently.
They certainly see themselves as brand loyal. According to a national survey by Yotpo, 90.2% of shoppers saying they are equally or more brand loyal than a year ago. However, that uplifting stat doesn’t tell the whole story.
Though shoppers see themselves as brand loyal overall, that loyalty is often only in reference to one or two brands, and it takes awhile for shoppers to consider themselves loyal. According to the same survey by Yotpo, 37% of consumers say that it takes five or more purchases for them to consider themselves loyal to a brand. In a world where choices are endless, and material satisfaction is never more than a few clicks away, getting a customer to make five or more purchases from your store is extremely difficult.
And yet, it’s necessary for brick-and-mortar success. If a grocer is able to turn a handful of customers who stopped in their store to make quick purchases into loyal shoppers, that could have a significant impact on their traditionally low margins.
So, where to begin? Customer loyalty doesn’t come easily. There are key factors that stores need to take into account in order to gain the trust and loyalty of their customers.
What Factors Influence Customer Loyalty?
First and foremost, shoppers become loyal customers when they have an excellent experience in your store. For grocers, a great in-store experience could mean any number of things, including having a reputation for cleanliness, a great store flow, or the freshness of your products.
Your staff is another key factor of your in-store experience. While a bit harder to replicate across multiple stores, your reputation for having a friendly, helpful staff can turn a customer into a loyal shopper. Research by Oracle says that 74% of consumers think knowledgeable in-store staff is important to their brand experience. Trust us, your customers notice when a member of your staff can answer any of their questions, or is willing to go out of their way to make their shopping experience seamless.
In-store experience isn’t just important for generations of shoppers who long for an older era. This factor is intergenerational. 56% of Gen Z says a fun in-store experience influences where they shop according to NRF, and Morning Consult says that 50% of millennials said that positive customer service interactions with a brand are very important in contributing to their brand loyalty.
This factor comes into play for online and brick-and-mortar retailers alike. Today’s customer expects a certain level of personalization, whether that’s through tech-based tactics like retargeting or through in-person strategies like relationship-building.
Edelman notes that 80% of consumers say they are more likely to do business with a company if it offers personalized experiences. While that stat alone should be enough to make you consider what you’re doing to intentionally incorporate personalization into your business, here’s another. According to Epsilon, consumers who believe companies are doing very well on offering personalized experiences shop more than three times more frequently.
That’s a case for personalization generating customer loyalty if we’ve ever seen one.
It’s not just what a customer experiences in your store, it’s how they feel in your store that can impact their likelihood to become a loyal shopper. Brand values have a lot to do with that indescribable connection that a loyal customer has with the brand they support. In fact, Motista says that customers who are emotionally connected with a brand have a lifetime value that’s 306% higher than the average customer.
If your store doesn’t already have visible, public brand values, it may be time to create some. Value alignment is important to customers across the generational spectrum, with Euclid noting that 52% of Millennials, 48% of Gen X and 35% of Baby Boomers feel it’s important that their values align with the brands they like.
Brand values don’t have to be wildly specific to make a difference to customers. In fact, most shoppers just want a brand to stand for something, and commit to that cause. Accenture says that 62% of consumers want companies to take a stand on the social, cultural, environmental and political issues they care about the most.
When it comes to grocery, sustainability is a hot topic and a popular consideration for consumers. In the research conducted by Oracle mentioned above, 52% of consumers state that a key influence on loyalty is knowing that retailers are acting sustainably, especially for grocery (56%). Consider adding a focus on sustainability into your brand values, either by taking steps toward becoming food waste-free, or implementing a donation program.
Though many customers consider themselves brand loyal, their actions tell a different story. Developing customer loyalty for your business is imperative to staying competitive in the brick-and-mortar market. Repeat purchases are becoming more important than ever in order to stay afloat, and the retailers that do the best job of giving their customers a personalized, seamless in-store experience that reflects their brand values will come out on top.
Customer loyalty is the most important currency for grocers – and that won’t end in 2020. Click below to download our eBook on how becoming a community-focused grocer will set you apart next year.