How To Preserve Retail Loyalty in Light of Rising Inflation
As costs continue to rise, today’s shoppers are eager to find the best deals. Here’s how brands can leverage their loyalty programs to deliver personalized promotions and retain loyal customers.
From groceries and gas to rent and consumer goods, prices are only increasing—and today’s shoppers are increasingly budget-conscious. According to data from Mckinsey, 40% of U.S. consumers are becoming more mindful of where they spend their money.
Not only are shoppers more particular about how they spend their money, they are also more willing to change their behavior in favor of better deals, or what is more readily available. In fact, about 70% of U.S. shoppers said they had purchased a new or different brand compared to pre-pandemic purchases.
The bottom line? Inflation is causing loyal customers to look elsewhere for better deals—and retail loyalty programs must adapt quickly to retain their customer base.
The brands that prevail in a competitive, inflated market need to deliver real, meaningful value to shoppers by prioritizing retail personalization, customized deals, and timely offers. Today’s loyal shopper is looking for quick, highly-personalized brand interactions that offer great deals right when they’re ready to buy. Here’s what it takes to deliver.
What Does Brand Loyalty Look Like?
Typically, a loyal shopper is defined as someone who has had a positive experience with your brand and purchased from you more than once. An extremely loyal shopper, on the other hand, is fully engaged—spending on a regular basis, investing in upsells, and referring others.
For any brick-and-mortar retailer, the goal is to cultivate this top-tier level of loyalty. A survey from Customer Think revealed that loyal customers shop 90% more frequently and spend 60% more per transaction. In order to build a dedicated, long-term relationship with shoppers, retailers first need to understand who their customers are.
Prioritize Personalized Price Incentives
Now more than ever, shoppers are searching their smartphones—and the aisles of their local grocery store—for discounts, promotions, and savings. Not only do they want to see more savings, they also want those savings to reflect their needs—like their favorite brand of milk, a new snack from a brand they’ve bought from before, or a sale in the produce aisle they frequent. This is retail personalization at its finest.
With shelf space waiting to be filled by smaller, local brands with lower price points, brands need to be open-minded about accommodating shoppers’ needs and increasing savings. When brands take their strategy a step further and offer personalized discounts, rewards, and loyalty points, they demonstrate they know their customers. The payoff is clear: Research shows that when personalization is done right, there is a 6.4x lift in member satisfaction.
Leverage First-Party Data
A critical component of delivering this personalized shopping experience is having access to accurate insights into shoppers’ behaviors and needs. Equipped with first-party data, retailers can offer personalized discounts that cement customer loyalty in a mutually beneficial way—while always respecting shoppers’ privacy.
Knowing what customers want is particularly important now, amid ongoing supply chain disruptions, labor shortages, and the ongoing Russia-Ukraine conflict. As a result, many brick-and-mortar retailers aren’t able to replenish their shelves as quickly as usual. These changes in inventory mean that shoppers aren’t finding the specific products they want when they want them.
From the brand’s perspective, low inventory or availability translates to lost share of wallet. However, by leveraging first-party data and custom grocery retail tools, retailers can prepare shoppers for product shortages ahead of time, and offer relevant items in the meantime.
Give Shoppers a Reason to Stay
An effective retail loyalty program doesn’t engage a customer one or two times and then never again. A critical part of retail personalization is building an emotional connection with your shoppers. In fact, data from Forrester reveals that 86% of multichannel shoppers and 87% of digital shoppers who feel appreciated intend to spend more with the brand.
Offering specific savings and relevant deals demonstrates that brands care about how this challenging—and expensive—moment affects their customers on a personal level. Caring about your shoppers is beneficial for your business too—94% of premium loyalty members shop monthly, 44% every few days.
Ready to Begin Delivering a Next-Level Retail Loyalty Program?
Swiftly has the platform and solutions to help you thrive and adapt to an ever-changing retail landscape, defined by inflation, fluctuating shopping behaviors, digital trends, and more. With our simple, out-of-the-box model that includes a retail platform, a mobile platform, retail media, insights and analytics, you can quickly take your loyalty-building efforts to the next level. Get in touch with us to learn more.