It wasn’t that long ago that supermarkets had a connection with their customers, a relationship beyond the exchange of goods for cash.
But today, loyal shoppers are increasingly becoming a thing of the past. A recent study we conducted of over 1,000 UK consumers revealed that nearly a quarter (24%) switched supermarkets in the last year, a stark contrast to the shopper apathy evident in the UK before the recession.
With families, the figures are even starker. Results showed that four in ten families with children under the age of 10 will visit several different brands to complete their weekly shop, cherry picking the cheapest and best from each. Not only are today’s shoppers increasingly disloyal, they are instilling this sense of disloyalty in the next generation.
The joy of supermarkets has always been in finding all you need under one roof, but today consumers are going out of their way to visit multiple stores in the hunt for the best prices. Testament to this is that a huge proportion of grocers’ marketing spend currently is focused on promoting cheap products and value for money.
With all the supermarkets singing the same song, there is little chance for any single brand to stand out and for consumers in general to become tired of the tune. However, with wages rising steadily, we are now seeing the first increase in spending power in recent years, which leads me to wonder what will come next. At a time when digital is everything and supermarkets are battling the challenges of multichannel alongside an all-out price war, what will consumers want next?
Perhaps we can look elsewhere in retail for answers. Shops exclusively selling CDs and DVDs have largely disappeared from our high streets, but music is no less important in our lives. In fact, live music is more popular than ever. Festivals and tours sell out in minutes, despite rocketing prices.
Consumers hanker for the experiential, which the savvy retailer knows only too well. Take John Lewis, for example, investing £14m in revamping its Oxford Street store; and the Co-op, investing in more staff to meet the rise in footfall from ‘little-and-often’ shoppers.
Online shopping has been a revelation but it can never replace the experience of visiting a store. Our research indicates that there is still very much an appetite for loyalty rewards to enhance this experience and build a stronger emotional bond between shoppers and their supermarkets.
Retailers need to review their loyalty strategy and look again at what truly motivates shoppers. Deliver that successfully and you’ll have a loyal customer for life.
By David Lawrence, Director of Planning and Insight at TCC.
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