When it comes to attracting Millennials to consumer incentive programs, expert advice is a particularly potent offering, finds new research from loyalty marketing firm LoyaltyOne
. According to the study, when it comes to joining grocery-store reward programs, shoppers in the 18-29 age range are especially motivated by in-store experiences such as sessions with a nutrition expert.
The report draws on the responses of 1,034 U.S. consumers, asking about the benefits that most interest them in their loyalty programs. While 69 percent of respondents overall said an "expert session" with a nutritionist or chef drive them to shop more with a grocer, 84 percent of Millennials responded the same.
"Grocery loyalty programs have traditionally relied upon price discounts and fuel rewards to lure customers, which are typically quite expensive for the grocer to offer and are relatively undifferentiated," Fred Thompson, retail practice leader for LoyaltyOne, told IncentiveMag.com, adding that these traditional programs have led to growing "customer fatigue." "Customers are looking for grocery stores to expand their healthy choice options, and this is an excellent time for grocers to retool and refresh their loyalty strategy to incorporate more health and wellness benefits, while decreasing their reliance on static, published rewards."
This research comes out as Whole Foods recently announced that, after three decades in business, it will be developing its first customer rewards program. The program is being tested at select stores ahead of a national rollout planned in 2015. This move has been seen by analysts as the natural-food grocer's effort to stay ahead of competitors like Kroger and Wal-Mart that have moved into selling more healthy offerings.
Thompson believes the decision was also aided by the evolution of loyalty technology capabilities, which allows Whole Foods to launch a program that is more immersive and experiential.
"Expectations are high for this new program, especially from a brand that already has strong customer engagement programs such as local classes for food photography," he said.
Thompson also pointed out that COLLOQUY, LoyaltyOne's research arm, has found that while the average U.S. household is a member of 21 loyalty programs, they are only active in nine of them.
"It is clear that there is a lot of noise in the marketplace, and it will be important for Whole Foods to develop a differentiated program consistent with customer expectations," he said. "Launching a 'me-too' loyalty program would likely fail to increase customer engagement and could end up backfiring on them."