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Building Brand Loyalty and Retaining Customers in Grocery Retail

Explore customer loyalty in grocery retail; understand challenges and solutions. Research findings, recommendations, and an implementation plan included.

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Building Brand Loyalty and Retaining Customers in Grocery Retail

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  1. Building Brand Loyalty and Retaining Customers in Grocery Retail ILDP Group 1 | Cohort 2

  2. Meet the Team Chris Bowers Group IT Infrastructure Manager SteinBuild Arushka Bugwandeen Executive Assistant to Group CEO Pick n Pay Bongani Ngutshane Managing Director Bquad Consulting Services Nicole Harris General Manager IT Omnichannel Makro Richard Shezi HR Manager Mr Price Thulane Mokoena HR Manager TFG Africa

  3. Objectives What drives customer loyalty What grocery retailers should do to retain their customers

  4. As a retailer, imagine… • Customers interacting with your brand multiple times a day • Growing your customer engagement by 50% • Improvingloyalty to your brand by over 20% • Adding R400m to your bottom line

  5. Why this topic is important • Grocery Retail competition is rife Global players entering the market Technological advancement Customers are more sophisticated than ever before It’s 6-7 times cheaper to retain than to acquire

  6. Research methodology Customer Interviews Literature Reviews Observations • To understand brand loyalty & customer retention • 60 observations – observing behaviour; follow-up questions 35 face-to-face interviews 130 responses electronic • 7 interviews face-to-face • Customer Loyalty Programmes Executives Interviews Desktop Research Surveys

  7. Research results Customer interviews  loyalty in grocery retail - Number of mentions Number of mentions 35 responses, equal gender split, 22-54 years old – specifically on grocery retail

  8. Research results Customer service Convenience “Some facilities do not cater for disabled people. Can they deliver to my house?” - Bertha Malatsi (72), Retired, Johannesburg “It’s frustrating when I just can’t find out whether they have stock before I go there” - Samantha Jacobs (33), Office Admin, Cape Town “Abasebenziabanolwazingesitolo” [staff are not knowledgeable] - Lethiwe Shezi (24), HR, Johannesburg “Can I have my loyalty card on my phone. I am always forgetting it” - Prethnee Naidoo (23), Student, Durban “Sometimes they don’t have the products I need and I can’t really do anything about it” - Melany Bradshaw (50), Housewife, Cape Town “I will be attached to a store if they offer online services” - Thys Fourie (50), Entrepreneur, Brits

  9. Research results Executives interviews  grocery retail - • All rated loyalty as important to business • Focus on ‘service differentiation’ • Loyalty programs feedback varied • used to entice customers • Purchases influenced by • brand promise • reputation • visibility • Disconnectbetween Executive thought processes & customer wants / desires 7 face-to-face executive interviews

  10. Research findings Customer service, convenience Also not completely aligned with what Executives think… 33% of loyalty program members don’t use them 50% of under 25 year-olds do not belong to any loyalty program* *Source: Brandmap survey, 2015

  11. Recommendation TECHNOLOGY TARGET MARKET ENGAGEMENT CUSTOMER INSIGHTS 70% 74% 47% 10% Source: Customer Loyalty Statistics, 2017 edition

  12. Recommendation MENU Omo auto detergent 3kg Would you like to: • Add to shopping list • Find the nearest outlet • Check the price • Add to online basket OR Sorry! We currently do not stock this product. Would you like to recommend that we do? • Yes • No, thank you Scan, Be Scanned, and Play Option 2: Be Scanned Use your phone in place of a loyalty card Option 1: Scan scan any product barcode Option 3: Play Takes the user to the retailer’s game Option 4: Talk to us Allows users to log and track queries or give feedback Scan barcode Be scanned Be scanned Scan barcode 47% increase in customer engagement 22% improvement in brand loyalty 15% increase in brand awareness Play with PnP Talk to us Talk to us Play with PnP Go to Main Menu Main menu Takes the user to the full app with all functionality

  13. Financial viability Operational cost savings +R71m Less project costs -R5.1m Net cost saving +R66m 50% loyalty program users 10% using the app 17% revenue improvement Half by year 3 On R80bn revenue = R340m revenue increase Online marketing Targeted emails Web banners Search engine optimisation (SEO) SEO: 2% retention vs. Mobile app: 48% retention Add revenue generated +340m Additional Profit +406m Year 3

  14. Business case Improves service & convenience Drives customer engagement • Increases loyalty and retention Utilises existing technology Data on availability & demand

  15. Implementation plan Building the Team Appoint a project team and manager Partner with a IT service provider Appoint an executive sponsor

  16. Implementation plan Build and Test the App

  17. Implementation plan Launch • Training – All Staff Stores and Head office • Host Launch events in every store • Continuous Marketing : TV campaigns and broadsheets • Omnichannel Presence

  18. Conclusion • Have customers interact with your brand multiple times a day • Grow your customer engagement by 50% • Improve brand loyalty by over 20% • Add R400m to your bottom line “Customer satisfaction is worthless, customer loyalty is priceless” Quote from Jeffrey Gitomer, Customer Loyalty Specialist

  19. Questions?

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