Could loyalty schemes bring back the weekly shop?

The weekly grocery shopping spree has been falling out of favour for some time now, with just 16% of consumers now reportedly sticking to this food shop schedule as opposed to 26% in 2020, according to Savanta’s latest Grocery Eye report. Former Ocado Group finance director, Vineta Bajaj, chalks this drop in weekly grocery shoppers to how life has fundamentally changed since the pandemic. “Pre-pandemic shopping habits were more frequent shops in one week, rather than the ‘one weekly shop’,” Bajaj says. “However, during the pandemic, customers gravitated to a one-shop out of necessity. Post-pandemic, customers started shopping more frequently, in smaller baskets, as the mix of office/home working has shaken up the natural flow of the week when it comes to grocery shops.” Consumers have blamed their lack of funds and spare time on the change in their grocery shopping pattern, as they reportedly hunt for better deals across smaller shops and online. In fact, some 16% of Grocery Eye’s respondents feel they are not being rewarded for their loyalty by supermarkets. Bajaj is also not surprised by this finding, citing that in times of high inflation, there’s a focus by customers to be frugal and shop around. GlobalData’s recent report, Thematic Intelligence: Customer Loyalty in Retail and Apparel, backs this sentiment up, revealing that Fast Moving Consumer Goods (FMCG) retailers face low customer loyalty in particular. This is due to their “highly interchangeable” offerings, which increases the necessity to offer perks through loyalty schemes to maintain and gain market share. Savanta’s own report also brought to light that shoppers are increasingly expecting more from their chosen retailers, with 62% saying they want more promotions and 51% saying they look for a loyalty scheme when they decide where to shop. This also echoes GlobalData’s How People Shop Survey 2023, which found that 55.3% of consumers are “always” or “often” influenced in their product choices in the food category by loyalty scheme incentives. GlobalData is of the opinion that customer loyalty schemes are the key to success for FMCG specialists, arguing that as consumers increasingly look to take advantage of promotions – particularly for groceries and beauty items, retailers must “ensure their loyalty offers are compelling”. “In addition to the competitive benefits that loyalty schemes offer to retailers, data collection gives substantial opportunities to better serve customers,” says Oliver Maddison, retail analyst at GlobalData. “The data that retailers collect on their consumers’ shopping habits can help them target campaigns to specific consumer groups, personalise promotions, and ensure their proposition remains relevant.” Maddison continues: “The findings of the How People Shop survey emphasise the need for grocers and health and beauty specialists to make their loyalty schemes as appealing as possible to remain competitive in the face of a disloyal customer base.” Meanwhile, Theadora Alexander, the CEO of FMCG consultancy YF, feels that consumer shopping habits are “in part a reflection of the breadth of on-shelf choices that inspire them”, not to mention how well these products deliver on shoppers’ changing preferences. “The opportunity for retailers is to use new products to give shoppers reasons to engage more, buy more and ultimately enjoy the shopping experience more – seeing it as a source of inspiration, excitement and theatre,” Alexander says. “We know that retailers who are quicker to embrace new propositions and brands grounded in real consumer insights, are far more likely to enjoy more frequent, loyal, satisfied shoppers.” Another aspect to consider in this discussion is time and Gen Z shoppers. Savanta revealed that 36% of respondents from this cohort said that taking too much time is one of their biggest frustrations with grocery shopping. Time is not only an issue for Gen Z, but rather it appears to be a universal annoyance for many consumers; Paysafe’s own research found that 60% of shoppers will abandon a purchase if faced with checkout complications – including failed payment authorisation. Rob Gatto, chief revenue officer at Paysafe, conclude: “Shoppers will no longer stand for a frustrating checkout experience, and retailers risk losing valuable sales if they can't provide a frictionless experience.” As 2024 is projected to be a transitional year for many retailers, loyalty schemes and seasonal promotions could prove a surefire way to keep shoppers fascinated. A positive finding from the Grocery Eye report was that the food shopping experience was “a happier one” in 2023, with 27% of shoppers feeling more in control than in 2022 when only 22% reported as such. Perhaps this year that percentage will grow once again.