No matter which side of the Atlantic they are on, grocery shoppers want loyalty programs with smarter, more relevant messaging, and merchants across the United Kingdom and the United States are rising to meet this demand.
U.K. grocery giant Tesco, for its part, is looking to drive rewards adoption using artificial intelligence to power a six-week promotion event using “hyper-personalization” to tailor a series of challenges within its loyalty scheme to each user, per a company announcement Monday (April 29).
“Personalization is about using what we know about customers to make their experience better and our rewards more helpful, and we’re very excited to see how our customers respond to Clubcard Challenges,” Lizzie Reynolds, group membership and loyalty director at Tesco, said in a statement.
In the U.S., meanwhile, pure-play grocery chain Kroger is looking at personalization to drive Click-and-Mortar™ shopping.
“By offering personalized savings, we can ensure customers get the right promotions at the right time, allowing us to get the most important return on our promotional spend while enhancing loyalty,” Kroger CEO Rodney McMullen told analysts on the company’s last earnings call. “Moving promotions online allowed Kroger to take personalization to a new level. … During the fourth quarter, this led to an 18% increase in digitally engaged households.”
In both the U.K. and the U.S., consumers tend to be less digitally engaged in grocery purchases than retail purchases, although rewards could help drive omnichannel adoption.
The PYMNTS Intelligence study “2024 Global Digital Shopping Index: U.K. Edition,” commissioned by Visa Acceptance Solutions, drew from a survey of 2,200 U.K. consumers. It found that 64% of shoppers in the country said they prefer purely online retail shopping, while only 13% prefer online grocery shopping.
Similarly, the U.S. Edition of the study, which was based on a survey of more than 2,400 U.S. consumers, found that the average grocery shopper uses fewer digital features than the average retail shopper.
Yet, in both cases, rewards can help drive adoption. The U.K. study observed that “nearly 80% of U.K. consumers consider loyalty schemes a benchmark feature” for merchants, while the U.S. study found that 54% of grocery shoppers expect rewards or loyalty programs.
Overall, the Global Edition of the study found that rewards are the second-most in-demand digital feature from grocers, right behind preferred payment methods. Plus, across the seven countries surveyed, 72% of shoppers said they want omnichannel rewards or loyalty programs.
Personalizing the rewards that these programs offer can further drive adoption. When shoppers receive offers tailored to their preferences, they feel understood and valued by the retailer. This personalized experience enhances customer satisfaction and fosters loyalty, as shoppers are more likely to return to a retailer that offers relevant deals.
The PYMNTS Intelligence report “PersonalizedOffers Are Powerful — but Too Often Off-Base,” which drew on responses from more than 2,500 U.S. consumers, found that 71% of shoppers received personalized offers and were interested in them. Plus, another 12% did not receive personalized offers but were interested in them.
Personalized offers have the potential to influence shoppers’ purchase decisions by highlighting products that align with their preferences or past purchasing behaviors. When faced with relevant deals, shoppers are likelier to try new products or make additional purchases.
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