Boosting Loyalty in Times of Inflation: How Supermarkets Can Use Loyalty Programs to Keep Customers Engaged in 2023

Inflation and food insecurity have shockingly increased globally over the last few years. The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8% in February 2022 on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics.

 

John Allan, the chairman of Tesco, issued a global warning about the “worse to come” in terms of food price inflation at the beginning of February. By the middle of 2022, inflation was predicted by the market research firm IRI to be between 5% and 8%, and that prediction seems to have come true.

How are supermarket shoppers reacting to inflation?

As inflation continues to impact the global economy, consumers are feeling the pinch of rising prices in their everyday lives. One area where this is particularly evident is in supermarkets, where many consumers are adapting their shopping habits in response to higher prices. In this blog post, we’ll explore how supermarket consumers are responding to inflation and what this means for the future of grocery shopping.

  1. Seeking out deals and discounts: One of the most common responses to inflation among supermarket consumers is to seek out deals and discounts wherever possible. Consumers are increasingly price-conscious, and they’re more likely to shop at supermarkets that offer lower prices or promotions. Retailers have responded by offering more promotions, deals and discounts, as well as loyalty schemes that reward frequent customers.
  2. Buying in bulk: Another trend that has emerged in response to inflation is the tendency for consumers to buy in bulk. By purchasing larger quantities of products, consumers can save money in the long run, as they’re able to take advantage of economies of scale. This trend has been particularly evident in the pandemic era, with consumers stocking up on essentials such as toilet paper and canned goods.
  3. Switching to own-brand products: Inflation has also led many consumers to switch from branded products to own-brand alternatives. As prices for branded goods continue to rise, many consumers are opting for own-brand products, which are often cheaper but of similar quality. Retailers have responded by improving the quality and range of their own-brand products, making them a more attractive option for consumers.
  4. Shopping at discount stores: Finally, many consumers are responding to inflation by shopping at discount stores. These stores often offer lower prices than traditional supermarkets, and they’re becoming increasingly popular as consumers look for ways to save money on their weekly grocery bill. In response, traditional supermarkets have started to offer their own discount lines, in order to compete with discount retailers.

How to utilize loyalty programmed at supermarkets to counteract price hikes

Inflation is affecting every aspect of our lives, and the supermarket industry is no exception. As prices continue to rise, supermarkets are looking for ways to keep customers loyal and prevent them from turning to competitors. One effective way to do this is through loyalty programs. In this article, we’ll explore how supermarkets can use loyalty programs to offset price increases.

  1. Discounts on future purchases: One popular tactic that supermarkets can use is to offer discounts on future purchases to customers who have spent a certain amount of money. For example, a supermarket could offer a $10 voucher to customers who spend $100 in a month. This not only encourages customers to spend more money in the short term but also provides an incentive for them to return to the store in the future.
  2. Personalized rewards: Supermarkets can also use loyalty programs to offer personalized rewards to customers based on their shopping habits. By analyzing customer data, supermarkets can determine what products a customer typically buys and offer discounts or free products on those items. This makes customers feel valued and encourages them to continue shopping at the store.
  3. Exclusive access: Another way supermarkets can use loyalty programs is by offering exclusive access to certain products or services. For example, a supermarket could offer early access to new products, exclusive discounts, or free delivery to loyalty program members. This creates a sense of exclusivity and encourages customers to remain loyal to the store.
  4. Partnerships with other companies: Supermarkets can also form partnerships with other companies to offer additional rewards to loyalty program members. For example, a supermarket could partner with a gas station to offer discounts on fuel to customers who spend a certain amount of money at the store. This provides additional value to customers and encourages them to remain loyal to the store.

How loyalty programs assist businesses in increasing their consumer base

  • Connect with the consumers on an emotional level
  • Get knowledge on consumer behavior
  • Attract consumers with various marketing tactics

Loyalty programs are an effective way for supermarkets to offset price increases and keep customers loyal. By offering discounts on future purchases, personalized rewards, exclusive access, and partnerships with other companies, supermarkets can create a sense of value for customers and encourage them to continue shopping at the store. As inflation continues to affect the economy, loyalty programs will become an increasingly important tool for supermarkets to retain customers and stay competitive.

Book a free consultation with us to learn more about our CounterPoint Loyalty Programs.

By POS Highway Staff | September 20th, 2023 | Customer Service, Retail News | 0 Comments

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