How shopper loyalty can lead to increased sales

Earning customer loyalty is hard work for food retailers. But it’s vital work.

That’s the message from a new report from the Food Marketing Institute (FMI) and retail strategy and analytics company Precima, titled “Next Generation Loyalty: Get It Right In Food Retail Part 2: Loyalty In 3D.”

“The best way for food retailers to gain an advantage over digital retailers and other competitors is to have a large, loyal customer base,” FMI and Precima said in a press release announcing the report. “To achieve this, it is critical for retailers to take a next-generation approach to customer loyalty and view it in 3D — loyalty as a strategy, loyalty as an outcome of daily decisions and loyalty as a program.”

According to the report, food retailers have the ability to compete successfully and sustainably in today’s highly competitive market by understanding and consistently satisfying shopper needs better than the competition. “But retailers need to realize they can’t assume that their current customers will remain loyal — they need to consistently earn the loyalty of their shoppers by aligning their resources and decisions with customer needs,” the report stated.

“Food retailers need to reboot the way they think about loyalty, taking advantage of the latest tools to truly engage shoppers and earn their loyalty across all customer touchpoints and not merely through a loyalty program,” said Graeme McVie, chief business development officer at Toronto-based Precima, in a statement. “They need to align their strategic, tactical and operational decisions across merchandising, marketing, store operations and supplier collaboration so a clear and consistent message is sent to the market that the retailer is working hard to earn the shopper’s loyalty.”

The report, the second of two on the topic, provides a framework and roadmap for how food retailers can successfully approach “Loyalty in 3D” and take their efforts to earn customer loyalty to the next level.

“With the intangible and tangible benefits that are possible from taking a shopper-centric approach, it is surely time for retailers to embrace next generation loyalty. As one of our member CEOs told us, ‘if you don’t like change, you’re going to like irrelevance a lot less,’” said Pat Walsh, senior vice president for industry relations at FMI, a food retail industry association. he report, which is based on survey of more than 3,000 shoppers and 200 retailers, provides guidelines for how retailers should implement a next generation approach to loyalty. Part one of the report can be downloaded here.