Progressive Grocer - September 2017 - 108

Technology

Loyalty Programs

to shoppers by way of
spending patterns
affecting how quickly
the reward is earned.

2

Linking loyalty cards
to online shopping:

Strong value comes
from enhancing both
the in-store and online shopping experiences
with proper personalized incentives, David
Bishop observes. West Sacramento, Calif.based Raley's does this by allowing shoppers
to build online carts and lists based not only
on past online purchases, but also past
in-store ones. Doing so has removed friction
and enabled a more seamless and continuous
experience with the grocer.

3

4

We see very
high penetration
of loyalty card
usage when the
retailer respects
the shopper's
data and makes
their life easier
and better."
-Cheryl Black,
You Technology

108

Offering variety: Consumers today want to

choose their reward and how it's delivered,
whether loyalty points, a physical gift card,
emailed promotions, rebates, or even a reward
transferred to a mobile wallet, McEndree says.
While consumer preference varies widely by
application, value and demographic, offering the
right reward options for each creates added
opportunities for positive brand engagement,
bounceback and continued engagement.
Providing rapid rewards: According to

research from Hawk Incentives, respondents
ideally want their reward delivered in less than
a week. Innovations in technology now offer
near-instant rewards, allowing shoppers to
redeem easily, sometimes with as little as a few
swipes on a mobile device, McEndree stresses.

A Problem of Trust
The problem remains, though, that many consumers today desire privacy and are tempted to withhold their data. Bill Bishop, chief architect at Brick
Meets Click, notes that while his firm doesn't have
an estimate of the percentage of shoppers with that
concern, some things they'll do include providing
the retailer with incomplete or erroneous contact information to make connecting everything difficult.
"Withholding information that can help target
offers more effectively does make the retailer's job
more challenging and complex," David Bishop adds.
"Mining past purchases could reveal some of these
attributes; however, this isn't fail-safe, as households
are buying groceries across multiple retailers."
Bill Bishop notes that most retailers have pledged
not to share information they collect with others,
and that up until this point, many customers have
been satisfied with that. However, with data breaches
and other calamities causing concern in recent years,

customers' reluctance
could become more of
an issue.
One way that grocers
can balance their need
for data with their
customers' desire to keep
data to themselves is to
apply similar approaches
used by digital marketers. For example, David Bishop
points to ads served on the internet, driven by sophisticated, rules-based algorithms, which capture and sort
through many attributes based on past search activity.
"This collective information creates thousands of
micro-segments that help determine what deals get
served up in each individual case," he says. "Using
a similar framework, grocers can develop various
segmentation, using past purchases, to create targeting segmentation like households with kids, health
nuts, cheese enthusiasts, etc."

Relevance Removes Reluctance
But from her experience, Kate Hogenson, strategic
loyalty consultant with St. Petersburg, Fla.-based
Kobie Marketing, notes that shoppers are willing
to give up their personal data if they get something
worthwhile in return, like a discount, coupon, or loyalty points redeemable for free products or discounts.
The lesson is simple: Give first to get something.
This is especially the case when the data desired
from customers could help them avoid products
they don't want. For instance, Cheryl Black,
CEO of You Technology, a Brisbane, Calif.-based
provider of digital-offer platforms, notes that
Phoenix-based Sprouts Farmers Market gathers
data on food interests in regard to dietary requirements such as gluten-free, dairy-free and vegan.
The retailer rewards customers for sharing this
information by presenting them with offers for
discounts on products in these areas.
"We see very high penetration of loyalty card usage when the retailer respects the shopper's data and
makes their life easier and better," Black says.
Still, no matter how data are used and what incentives are offered, it all must come down to using the
information to offer savings, ease and convenience,
Black emphasizes. Grocers must be sure that if they
promote anything via incentives, that they not do it
with things a shopper isn't interested in. Retailers must
be transparent about any promotions and turn them
into savings, ease and convenience for the shopper.
"It is much better to keep a loyal customer
returning each week than to have them add one
more item to a basket on a given week and stop
shopping your stores as frequently," she says.
"Shoppers will respect a 'fair exchange' and will
give a little data to make their life better. But they
must never feel taken advantage of." PG

| Progressive Grocer | Ahead of What's Next | September 2017



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