My neighborhood supermarket, Shaw’s, recently got rid of its shopper loyalty cards and they weren’t so quiet about it. Giant placards declaring “CARD FREE SAVINGS” hang from the ceiling roughly every few steps. Endcaps have posters celebrating that now “Everybody Gets a Great Low Price.”
If you think this might be an admission that customers consider carrying those extra plastic cards in their wallet or on their key rings to be a major inconvenience, you’ve hit the bullseye. Shaw’s even uses the “H” word, “Hassle,” to describe their previous loyalty program.
Supermarkets and retailers are now experiencing a widespread backlash against loyalty cards, which serve an obvious data-gathering role for marketers but also sometimes create resentment from shoppers who see two different prices on thousands of items. In my experience, the cashiers have always swiped the store card at the register when I “forgot” to bring mine. (I also fall into the camp of not wanting an overloaded 400-pound wallet.)
The change at Shaw’s was mirrored at its sister supermarket chains, Acme, Jewel-Osco and Star Market. So are shopper loyalty cards and loyalty programs now going extinct?
Time Magazine notes that last year Americans had signed up for 2.65 billion loyalty program memberships.
Analyst Jon Hauptman, of Willard Bishop, tells the Supermarket News trade journal that
the customer intelligence gleaned from these cards give retailers a competitive edge by allowing them to make personalized offers to consumers. Meanwhile, successful companies that do not use loyalty programs fall into one of two camps:
“First are marketing-oriented retailers that connect with shoppers in other ways. Successful ones without loyalty programs include H-E-B, (the employee-owned) Hy-Vee and Whole Foods. Retailers like these, Hauptman said, typically rely on store management to help tailor store offerings; often solicit shopper email addresses to connect with engaged customers; and connect with shoppers in other ways as well, such as regular surveys and social media vehicles.”
“Second are efficiency/cost-oriented retailers that focus on low prices and don’t seek to tailor assortment or pricing by store or shopper. Those without loyalty programs include Aldi, Demoulas Market Basket and WinCo Foods. They present market-leading prices and great values, he said. Their low-cost focus is not designed to be tailored, localized or personalized.”
To avoid getting caught in a price-cutting race to the bottom, it’s preferable for retailers to build loyalty around unique products, services and experiences. Whole Foods, for example, enjoys a cult-like following for its organic produce, commitment to local food sources and dedication to the environment and community programs. (Check out these passionate customer pics.)
Photo-themed contests, sweepstakes and games can be an ideal vehicle for engaging with a retailer’s most devoted customer base — people who want to have a relationship with the brand rather than feeling forced to do so by two sets of prices.
Pongr uses image recognition technology to turn any brand logo or product packaging into an interactive direct-response advertising opportunity. Gathering intelligence from customer photos, the system can build a CRM database from scratch or tie into existing brand loyalty programs.
Recent shopper marketing campaigns using Pongr technology includes Sobe’s “Snap Into Your Escape” Sweepstakes,” Mountain Dew and Circle K’s “Ultimate New York City Getaway,” Pepsi’s “Iconic Summer,” and Nestle Skinny Cow’s “WoCave Instant Win Game.”
Want to learn more about Photo Response Marketing? Here are a few thoughts from Pongr CEO Jamie Thompson on how retailers and brands can capitalize on consumers’ natural passion for sharing their mobile photos: