For grocers seeking to evolve to the next level of customer connectivity, mobile offers an abundance of choices worth checking out.
The grocery industry and consumers’ path to purchase have changed dramatically in the past decade. Gone are the days of a single weekly trip to the local supermarket to fulfill family and household needs. The majority of U.S. households now spread their weekly shopping trips out between membership clubs, specialty grocers, traditional grocers and big box retailers. Add in the fact that these frequent shoppers use a multitude of new digital tools to get the best deals wherever possible, all in real time, it becomes apparent that the challenge of being in grocery marketing has never been more demanding. However, for those grocers that are adapting to their customers’ lifestyles and are integrating digital elements such as mobile coupons and text communications into their existing loyalty programs, the opportunities and competitive advantages are endless.
Industry fragmentation also plays a role in the shopper’s shrinking cart, as does the multi-tasking lifestyle. One national chain has reportedly seen their average basket size drop from over $75 to less than $25 in just the past three years. With thousands of locations, it will be a struggle to survive if this grocer does not adapt to the reality of the marketplace—quickly. Basket size has decreased as consumers shop at multiple locations and roam the aisles cherry-picking the store for exclusive offers and deals. With the increasing popularity of grocery delivery services, traditional brick-and-mortar stores have additional pressure on driving in-store traffic.
Traditionally, grocers have been one the slowest of all consumer verticals to adopt technology as part of their marketing and loyalty strategies. As late as two years ago some were just integrating email into their loyalty programs. Most card-based programs still highlight the home landline phone as the primary identifier. More than one-third of U.S. households do not have a landline phone, and of the homes that do, many say they do not use it. Analysts are taking these 2012 stats into account for the 51.7% of households that are effectively wireless-only, making America more wireless than wired.
For grocers, the good news is that the marketing landscape has now evolved to their advantage. With the advent of digital media and multi-channel marketing programs, the biggest game-changer is now mobile.
Retailers such as Meijer Supercenters and Kroger that have significantly incorporated mobile into customer communications and loyalty programs have experienced excellent customer participation and program ROI. Mobile marketing is a cost efficient, personalized addition to traditional print media, email, FSI and direct mail marketing campaigns. Mobile’s most notable impact is on coupons, where 62% of consumers say they are redeeming grocery and consumer retail goods-based coupons via mobile. Mobile is unique, as it requires a contact database of customers that have agreed or opted-in to participate, but unlike Sunday circular coupon-clippers, they become a known quantity of qualified shoppers. By promoting mobile participation among them through text messaging, QR codes, mobile coupons and in-store events, grocer marketers can drive in-store traffic.
Mobile is a dynamic channel where a promotional campaign can be conceived and launched in minutes, not days and weeks like print and direct mail. This allows marketers to respond to their organizations’ unique demands and can influence store traffic, in-store purchase behavior and leverages the immediacy and location-based connectivity of a customer’s mobile phone. Text is still more popular and reaches more users than push notifications within smartphone applications, offering a nearly universally utilized channel with which to contact and influence consumers. A recent study reports that 42% of consumers prefer the less invasive text-based coupons versus barcode scanning and push notifications. Savvy grocer marketers can take advantage of solutions that use text for quick-to-deploy campaigns that tie in to in-store or manufacturer’s campaigns and extend their reach to your qualified and engaged customers.
Finally, mobile offers a great way to create a positive customer experience with proactive communications, such as a recall notice, loyalty program milestones, delivery notifications and holiday store hours. Extending customer service beyond the walls of a store not only differentiates grocers, but also creates a sense of care and convenience with shoppers that strengthen their loyalty.
Mike Romano is senior vice president mobile, sales and client services at Genesys | SoundBite.