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02.07.2007

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NOW AVAILABLE» Pulse Report SHOPPER CARDS FOR A CONSUMER PERSPECTIVE This Pulse Report documents how well consumer attitudes and behaviors align with industry intent and practice. Shopper Cards from a Consumer Perspective looks beyond transaction size and shopping frequency patterns to begin to unravel the mystery surrounding who holds the key to loyalty: the consumer or the retailer. Click to learn more...

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For more Hartman Group articles on SHOPPER CARDS, click here...

12.06.2006 Loyal to Loyalty Cards


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For more Hartman Group articles on RETAIL EXPERIENCE, click here...

11.15.2006 Simplicity at Retail

07.19.2006 The Role of the Exit Experience

10.27.2005 Retail Experience on the Front Lines

08.25.2005 Costco vs. Wal-Mart: Getting Beyond Utility

05.19.2005 The Myth of One-Stop Shopping

05.12.2005 Building Community: the Lost Art of Hanging Out

04.07.2005 Trader Joe's: Cracking the Code of Lifestyle Brands

05.06.2004 Beware of Self-Checkout and RFIDs

11.01.2002 Mom & Pop: What's in a Memory?

08.02.2002 The ABCs of Experience

07.26.2002 The Retailer as Brand

06.28.2002 Experience, Expectation and the Shopping Trip

04.26.2002 Sometimes an Experience is Just an Experience

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Click here for an archive of past HartBeat articles

Shopper Cards: Popular, Yes...but Special?

One problem with the typical supermarket card program is that it treats every cardholder the same - everyone receives the same discount on the same item. The downside to this approach is that shoppers have almost no expectations beyond savings for ordinary supermarket shopper cards. According to a recent Hartman Group report, Pulse Report: Shopper Cards from a Consumer Perspective, well over half of today's shoppers own cards from two or more supermarkets - with 26% in possession of three or more grocer cards. Given this, it would seem that a discount-only approach to a card program would not effectively foster consumer loyalty.

From our Shopper Insights research we've determined that shopping behavior is largely unscripted. This does not mean there are no shopping routines or habits. Everyday shopping does involve behavioral scripts, but these are typically of a highly general nature and have more to do with adhering to cultural standards of social etiquette than to patterns of behavior.

For example, among shoppers there are definite right and wrong ways to manage shopping carts, handle produce, act in a checkout line, etc., many of which are highly scripted behaviors. These routines and habits, however, are themselves only loosely constructed patterns of behavior that help consumers minimize the amount of time and energy spent on what is a necessary household task. The result is that observed shopping behavior may appear much more haphazard than it really is simply because the most efficient approach to shopping often does not lend itself to systematic and mechanical coverage of every aisle.

In line with trying to determine "scripted" shopping behavior, we find that the practice of analyzing point-of-sale data alone does not necessarily shed light on underlying drivers of consumer shopping behavior, nor does it reveal much of how consumers valuate the in-store experience, products and services, and staff. While such data prove useful from the supply side of the business, combing internal shopper data to understand loss/wins in shopper allegiance will very likely yield limited insights into the motivations and habits that drive shopping behavior.

Going Beyond Promotions at Store Shelves

According to Pulse Report: Shopper Card from a Consumer Perspective, shoppers have almost no expectations beyond savings for typical grocery shopper cards. Eye-catching point-of-purchase materials really do "talk" to consumers much louder than other types of marketing materials, primarily by communicating that all-important four-letter word: SAVE! And because of the proliferation of shopper card programs and usage, sale promotions linked to these types of cards are extremely effective in drawing shoppers' attention at the shelf.

Consumers deeply intent on bargain-hunting during a given cultural occasion for shopping generally pay strict attention to at-shelf promotional tags. They may even experiment with new/alternative brands if the deal is right and if doing so won't transgress any household member's individual food orientation. Generally, though, consumers using this tactic constantly alternate between store brands and mainline brands over time, as the shifting promotional winds blow.

Yet we find that shoppers have almost no expectations beyond savings for typical grocery shopper cards. This means a new era is unfolding where loyalty offerings can go beyond the confines of "what the shopper buys in store" to understand what the shopper is doing outside the store that influences behavior in the store.

By shifting the strategic focus of a shopper card program from "monetary savings" to "making emotional connections," the shopper card program is transformed from one that merely captures cash register data into one that incorporates lifestyle information to enhance the overall shopping experience - thus differentiating the store in ways that resonate with consumers.

"Happy" and "Unhappy" Card Users

Our work in shopper insights has pretty much shattered the myth that supermarkets are sacred spaces for loyalty-building efforts given the shifting patterns of food purchase behaviors exhibited by many households. The consumer perspective on supermarket shopper cards as strictly a vehicle for savings illustrates the lack of emotion shoppers share between themselves, their lifestyles and traditional supermarkets. If there were more emotions, we might expect there to be a larger number of "happy" card users who view their cards as "special." To gauge a level of happiness, we asked shoppers if they thought that their shopper cards provided more benefit to them or to their stores.

The divide in shopper sentiments over the idea that shopper cards provide exclusive benefits beyond savings helps to highlight the overall ambivalence customers feel about shopper cards. Only 19% of shoppers somewhat or strongly agree with the statement, "the shopper card provides more benefit to me than it does to the store," compared to 39% who strongly or somewhat disagree with the statement. A more telling example of indifference to perceived benefits of shopper cards is seen in the 80% of shoppers who are either "neutral" or disagree with the statement. (Figure 1)

Getting Beyond the Ordinary

Compared to the rewards/points programs from service sectors (e.g., airline miles or hospitality points), supermarket shopper cards managed solely as discount systems have proven over time to under-whelm shoppers in terms of causing them to equate happiness or loyalty to local stores. Unlike rewards/points programs from service sectors, retail brands who employ strictly as vehicles for savings tend to be purveyors of ordinary, highly commoditized SKUs.

The grocery store is the best example of this kind of retail brand. Part of the problem, for consumers, is that not only are shopper cards simply seen as "my way to get to the real price," the commoditized goods are hardly enough of an incentive to build an earned rewards system around.

Additionally, the majority of supermarket shopper card programs don't nurture loyalty for another reason: they generally don't "give" anything relevant back to consumers beyond instant savings - the same savings they received before the advent of card programs. Shoppers are therefore more likely to be "loyal" to the credit or bank card with which they can accumulate airline miles or similar rewards and use the frequency of paying for groceries as the fast track to free trips.

Findings in our Shopper Cards from a Consumer Perspective report suggest that consumers are more than a bit fatigued by ordinary savings-styled shopper card programs. To reduce the fatigue, food retailers utilizing or those considering card programs, would be well advised to look for ways to integrate a bit more surprise and delight into affinity programs. One part of crafting cards into special programs that engender "happiness" lies in forging a link between consumer lifestyles, as lived outside of the store, with behavior happening in the store (at point-of-purchase and at point-of-sale). Such connections, while complicated to synthesize into pure numbers, also create more of what all retailers crave: loyalty.

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