US supermarkets' loyalty participation rates

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By: Wise Marketer Staff |

Posted on May 7, 2008

Food retailers in the US are using technology in innovative ways to remain competitive, meet consumer demands, build customer loyalty, and become more efficient, according to a report from the Food Marketing Institute.

The institute's latest report, entitled 'Food Retailing Technology Benchmarks 2008', observed that frequent shopper programmes tend to result in greater customer loyalty and spending.

Loyalty scheme penetration
The study found that 48.8% of US retailers have a frequent shopper programme in place, and that an average of 90.0% of each retailer's customers participate in the programme.

The institute also found that identifying shopper needs and shopping trip habits can lead to greater customer satisfaction, greater basket sizes, and better category management. Among the supermarkets surveyed, 84.2% claimed a greater number of weekly store visits from loyalty programme participants, and 76.5% cited higher gross margins from shoppers that have frequent shopper cards.

Weekly shopping trips
Most grocery shoppers today have a choice of several food retailers and formats. However, North American consumers are making only 1.9 trips per week for their groceries (down from 2.1 trips per week in 2006). With fewer opportunities to interact with the shopper, retailers therefore need to maximise the opportunities afforded by each shopping trip.

Frequent shopper programmes are not only used to attract consumers, but the data provided by loyalty programmes can help the retailer to better meet customer needs. As a result, these programmes were found to improve the efficiency of store operations and provide a cost-effective way to customise product selection. Retailers maximize their selling space and save customers money through discounts when they are able to maintain an inventory that reflects the store's demographics.

Top consumer benefits
In addition to product discounts offered through frequent shopper programmes, other benefits to the consumer may include:

  1. Automatic electronic coupon deductions (85.0%);
  2. Points toward store discounts on any product (55.0%);
  3. Donations to charities (40.0%);
  4. Points toward specific free products in store (40.0%).

The internet's role in retail
The internet is used by 93.0% of companies at the store level, including applications such as labour scheduling, time and attendance, loss prevention, employee communications, and staff training. Supermarket web sites are also being widely used to complement the consumer's shopping experience: in addition to providing store locations and weekly sales flyers, many provide additional information such special offers, career opportunities, menu planning ideas and recipes, gift card information, and general household and cooking tips.

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