Customers Disloyal to Supermarkets, But Advocates Improve Profits
A new report from IBM (as covered by Reuters and Supermarket News) shows that just 27% of U.S. consumers are loyal customers willing
to act as “advocates” for the local store. The rest either have no loyalty toward
their local supermarket or feel antagonistic toward it.
Consumer advocates can help improve profits by way of larger transactions and recommendations to others, and place a high value on quality, selection, employees, product availability and social responsibility. As to store types, only 19% of supercenter shoppers are advocates, compared to 26% of supermarket shoppers, 32% of wholesale club shoppers and 46% of local or regional grocers.
The report identified Wegmans, Publix, Whole Foods Market, Costco and Target as having the most loyal shoppers in the survey. Among factors that are common to grocers with the most loyalty are quality and freshness; product range; convenience and customer service. For example, Whole Foods lets local managers who are closer to customers make decisions; Wegmans' emphasises employee motivation and retention; Publix has creative store formats, Costco's focuses on employees and a unique, limited merchandise mix; and Target's turns their customers into "evangelists."
Considering that from 2002 until 2006, spending at traditional supermarkets rose only 0.8% (compared to 3.2% for food spending), the writers' conclude that “the customer loyalty card efforts across the grocery industry have fallen short of their goals as grocers sacrifice customer experience to focus on lower prices. Building differentiation with today’s savvy and vocal consumer requires a whole new approach for businesses.”
Posted by Universal Ad
Consumer advocates can help improve profits by way of larger transactions and recommendations to others, and place a high value on quality, selection, employees, product availability and social responsibility. As to store types, only 19% of supercenter shoppers are advocates, compared to 26% of supermarket shoppers, 32% of wholesale club shoppers and 46% of local or regional grocers.
The report identified Wegmans, Publix, Whole Foods Market, Costco and Target as having the most loyal shoppers in the survey. Among factors that are common to grocers with the most loyalty are quality and freshness; product range; convenience and customer service. For example, Whole Foods lets local managers who are closer to customers make decisions; Wegmans' emphasises employee motivation and retention; Publix has creative store formats, Costco's focuses on employees and a unique, limited merchandise mix; and Target's turns their customers into "evangelists."
Considering that from 2002 until 2006, spending at traditional supermarkets rose only 0.8% (compared to 3.2% for food spending), the writers' conclude that “the customer loyalty card efforts across the grocery industry have fallen short of their goals as grocers sacrifice customer experience to focus on lower prices. Building differentiation with today’s savvy and vocal consumer requires a whole new approach for businesses.”
Posted by Universal Ad
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