Beyond reward points: Store loyalty varies among generations
- Grocery retail sales are expected to increase to more than $800 billion in the U.S. by 2018 according to Progressive Grocer.
- Kantar Worldpanel reported that online grocery options saw a sales increase of 15% in 2016 and account for 4.4% of the market.
- Dissecting the buying habits of different generations can help grocery retailers better prepare a marketing strategy to influence each set of demographics. For instance, baby boomers often prefer one-to-one interactions with retailers and are more apt to buy something if they have a coupon or loyalty discount. Millennials prefer to conduct most of their research online, but are more likely to buy a product at the a nearby brick-and-mortar store location.
If the grocery segment wants to keep its share of the projected $800 billion in sales that the U.S. is set to average by 2018, it needs to attract all generations and demographics. That starts with building brand loyalty.
The ultimate goal of a loyalty program is to generate goodwill with existing customers. Many analysts agree that having a solid marketing strategy targeting all generations is the best way to ensure customer loyalty.
A recent study by Nielsen revealed that 80% of millennials are interested in loyalty points and want the option to choose from several different types of rewards and earn bonuses. Another study by Bond Brand Loyalty found that 68% of millennials were willing to switch where they shopped for the promise of more rewards points, so offering this type of loyalty program could be a successful way to attract younger demographics to the store.
Last year, a report by Chase for Business found that baby boomers (40%) don’t find loyalty programs as essential as millennials (62%) or Gen Xers (64%), and that the boomer demographic is more interested in coupons and in-store savings when it makes decisions to shop. Baby boomers and Gen Xers are more likely to stay devoted to a store that continues to provide savings.
- Progressive Grocer Building True Brand Loyalty
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