Services / Loyalty consulting / Grocery retail
Loyalty in grocery retail: customer loyalty at high purchase frequency
In grocery retail, customers often shop several times a week. At the same time, margins are low and promotions are everywhere. Customer loyalty has to be calibrated precisely here, otherwise it just hands out discounts.
ProNexum helps grocery retailers manage customer loyalty based on data: which customers to retain, which benefits really work and how it all pays off.
What makes loyalty in grocery retail special
The high purchase frequency generates a great deal of transaction data. This is the real opportunity: those who understand shopping baskets can personalize offers, manage assortments and use advertising more effectively.
More and more retailers are relying on ecosystems instead of stand-alone points programs. One example is Lidl Plus: the app combines coupons, rewards and offers with core functions of a grocery app such as weekly flyers, digital receipts and shopping lists. The same applies to REWE, one of Germany’s leading grocery retailers.
In addition, many retailers have complex structures: headquarters, regions and independent store owners must work together. Mechanics, funding of benefits and data access must work for everyone involved.
Discount and full-range formats
Discount
Simplicity, price perception and efficiency come first. Customer loyalty must be lean, digital and work without complex mechanics.
Full range
Assortment breadth, fresh produce, service and advice shape the profile. Added value, services and regional offers can play a much larger role here.
Our experience
Our team has worked for both formats – for national and international grocery retailers.
The role of multi-partner programs
Multi-partner programs continue to play an important role in grocery retail, not only in Germany with Payback, the country’s largest multi-partner program, but in other countries as well. For them, grocery retail is the most important industry: it brings the highest purchase frequency and large baskets.
Without a grocery retailer as a partner, the relevance and effectiveness of a multi-partner program drop significantly. For retailers, participation is therefore a strong negotiating position – and the decision between a partner program and an own ecosystem is one of the most important strategic choices.
Levers for customer loyalty in grocery retail
Personalized coupons
Offers based on purchase history instead of the watering can: higher redemption, less margin given away.
Identifying customers
Without a card or app, the purchase in store remains anonymous. Incentives for identification and opt-in make customers reachable in the first place.
Private labels and fresh produce
Directing benefits to assortments that create profile and bring margin.
App as shopping companion
Shopping list, flyer, digital receipt, click & collect and delivery as part of the ecosystem.
Retail media
Generating additional revenue with industry partners through customer data and reach, clearly separated from customer benefits.
Regional differentiation
A central ecosystem with room for regional offers and store promotions.
KPIs that matter
- Revenue penetration: share of revenue that runs through the loyalty program and can therefore be clearly attributed to individual customers
- Identification and opt-in rate: how many customers are known and may be addressed in a targeted way
- Visit frequency and average receipt of identified customers in comparison
- Share of wallet and churn in key customer segments
- Redemption rate and incrementality of personalized offers
- Cost per active customer and in relation to additional revenue
What clients say about our work
We know the structures of (cooperative) grocery retail, among other things from project work with REWE, which is organized as a cooperative of independent retailers.
“ProNexum not only advised us, but embodied a true partnership. Their deep understanding of digital marketing and operating models convinced us.”
Hanno Rieger
CEO, REWE Dortmund
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FAQ
Frequently asked questions
Is an own loyalty ecosystem worthwhile for a grocery retailer?
That depends on customer base, data competence and budget. An own ecosystem brings data ownership and differentiation, but needs reach and ongoing investment. We calculate the options in the business case.
Own app or a multi-partner program such as Payback?
A multi-partner program brings reach and partner revenue, an own ecosystem brings data ownership and a direct customer relationship. Combinations are also possible. The decision depends on strategy, customer base and negotiating position.
How do you prevent loyalty in the supermarket from just handing out discounts?
Through segmentation and personalization: benefits are targeted at customers and assortments where they change behavior. Incrementality is measured, not assumed.
Do you want to rethink customer loyalty in your grocery business?
We would be happy to discuss your starting point, goals and a sensible first step with you.