Grocery-driven fuel rewards just aren't enough
US grocery shoppers have a resounding message for grocery retailers who have been enticing them with fuel rewards for over a decade - that they prefer that grocers offer discounts in the aisle instead of at the pump - according to a nationwide survey of 1,000 consumers by LoyaltyOne.
The survey found that this preference is strongest in the densely populated Northeast, where 81% said they'd opt for grocery discounts over gas savings. It's weakest but still noteworthy, in the West, where 65% favoured grocery discounts.
Among the biggest spenders, those who budget $700 a month on groceries, no less than eight out of ten (83%) expressed a preference for grocery discounts versus gas rewards. Similarly, the majority of shoppers (74%) spending $300 to $500 a month, said they prefer grocery discounts to gas savings.
Age-wise, older millennials are leading the charge for grocery discounts over gas rewards. Among shoppers 25-35 years old, 76% said they prefer grocery, rather than gas rewards. That's five percentage points higher than any other age group in a range spanning from 18 years old to over-65.
"Too many grocers have become complacent with a one-offer-fits-all mentality about loyalty. Not only is a generic fuel offer not relevant to all customers, it equates to untargeted marketing spending undermining ROI," explained LoyaltyOne Consulting's managing partner Dennis Armbruster. "Fuel reward programmes still have relevance and value, but our research and client engagements confirm they're also not a cure-all for building loyalty. Progressive grocers need to heed the signs. Few can afford to not leverage shopper data and explore alternatives or additions to their fuel programmes to engage more customer segments, improve their marketing response and derive significant returns."
Among the survey's other key findings:
- 62% of respondents said they'd switch to grocery rewards if a grocer offering gas rewards gave them the option of a different type of reward;
- 24% said they'd stay with gas rewards;
- 8% said they'd opt for travel rewards;
- 6% chose electronics, housewares or apparel.