Grocery Store Customer Loyalty After COVID
When restaurants started closing in late March, consumers had to turn to grocers for their meals. In addition to that, customers were looking for extra household supplies, like disinfectant and toilet paper. Such a sudden increase in demand led to high sales for grocery stores, a strange occurrence in an ordinarily stable industry. Now that some states are beginning to reopen, store owners are looking for ways to retain customers after the rush has died down. One of the most effective methods of encouraging customers to return is through loyalty and membership programs.
There is a difference between the two, though they are sometimes used interchangeably. Loyalty programs are free to sign up for and essentially create an account for the customer at the store. Membership programs usually require a fee and reward their members with discounts and special offers. While loyalty programs are always an excellent way to reach out to customers and keep track of spending habits and trends, membership programs can significantly increase the satisfaction your customers feel when shopping.
[Mini Case Study w/Goodwin's Organic Market]
My family’s store, Goodwin’s Organic Market, has a highly successful membership program. As many proprietors know, your top 200 customers generate 50-60 percent of your sales. When customers are investing that much in your store, create a symbiotic relationship by giving back to them.
While tracking basket count can help determine your highest spending customers, it’s also important to monitor store traffic. Our POS solution, IT Retail, helps to accurately keep count of customers so you can determine your busiest hours. Inform your members of the least busy times. By giving your members the chance to shop during your slowest hours, you’ll show that you are committed to providing the best experience possible.
With 4,000 members, Goodwin’s loyalty program provides excellent service to its members. We like to give a personalized experience by greeting customers by name and giving customized discounts. Our program offers a 10 percent discount for all purchases and a 15 percent discount on member’s favorite items. They can either pick their top five products or automatically apply it to their top five most purchased. Additionally, on Tuesdays, members receive 15 percent off of produce.
Beyond customer discounts, we also like to encourage the growth of our community. When customers feel connected to the people and community at a store, they’re more likely to return and recommend us to friends. We run events at Goodwin’s, like our rooftop yoga and cooking classes. Members are eligible for a discount on these events. Our goal is to create an environment where a customer will visit for yoga, grab a smoothie afterward, and get some shopping done while they’re there. We want customers to have an emotional connection with our business, as people that feel connected to a store are more likely to return.
To gauge how our customers feel about the membership and its rewards, we also like to give surveys. Just a few basic questions can help us determine popular products and services, as well as other ways for us to invest back into our customers. Feedback is one of the most important aspects of maintaining good customer relationships and ensuring satisfaction.
Along with the emotional aspect, financially, memberships are also a good idea. Returning and high-spending customers bring in more money, but their membership fees are pure profit for our store. We offer two payment methods. Customers can purchase a year’s membership for 20 dollars or pay three dollars a month. Even if all of our members only paid for one month, that’s 12,000 dollars of profit.
That extra money can especially be helpful now, with so much uncertainty surrounding the future. Grocers have to be prepared for anything, and some additional profits can help pay more workers or stock up or high-demand items.
Sales grew by 27 percent for grocery stores in March and continued to rise through April. While the growth slowed over the next few months, it is still on the rise, just at a slower rate. And regardless of when the pandemic ends, the effects of it will last long after. A survey found that about half of Americans are planning to continue eating 90 percent of their meals at home. There will be continued paranoia around going out, keeping most people at home.
- COVID-19 has caused grocery sales to reach new highs.
- Store owners need to find ways to retain customers after the pandemic has ended.
- One of the best ways to do so is to create a membership program for your customers.
We don’t know how the rest of the year will go, let alone the years following, so grocery store owners need to find ways to encourage customers to return. Loyalty programs are the best way of doing that. If you’re looking for more grocery related content, check out our blog.
Author: George Goodwin
George Goodwin is a Marketing Director for IT Retail POS solution. He has a background in marketing for health food grocery stores and online software. He is a 3rd generation grocer who has worked on business partnerships, social media, website SEO, and content writing. George graduated as a student-athlete in Economics and English from the University of California, Riverside. With a post-graduate degree from Graduate Institution of Biblical Studies.