Asia-Pacific (APAC) grocery retailers are under pressure as consumer behaviour continues to evolve in response to macroeconomic stressors.
The current landscape, wrought with cost-of-living increases, soaring interest rates, a looming mortgage crisis and climbing rents has forced consumers to become more discerning in their spending habits. As a result, grocery retailers must swiftly adapt to this changing landscape or risk being left behind.
Whilst the APAC region may have held up well in the current economy, ending 2022 with a much lower inflation rate (4.4 per cent) than the rest of the world (7.9 per cent), it doesn’t mean that consumers aren’t pinching pennies where they can. In fact, according to Eagle Eye’s recently released Grocery’s Great Loyalty Opportunity report, many admit to travelling less (54 per cent), eating at home more (50 per cent) and actively seeking out offers and promotions (54 per cent).
As prices continue to spike at the grocery store, consumers are looking to save money at all costs. Eagle Eye research reveals that 61 per cent of consumers say they use various money-saving techniques when grocery shopping, a figure that is increasing over time.
The desire to save at the shelf is real and urgent. Let’s break it down:
● 57 per cent are actively seeking out items for which there is an offer or promotion available
● 47 per cent are much more aware of items on sale or promotion
● 58 per cent leverage existing loyalty programs more frequently to save money
● 54 per cent seek out loyalty programs that can offer the most value and discounts
With such an emphasis on finding and delivering value, it’s unsurprising that grocery store loyalty programs are top of mind for both consumers and retailers. It’s second only to buying more items on sale or promotion (64 per cent).
“APAC consumers see grocery loyalty programs as a means to unlock tangible value, prioritising it over status, perks or earn rewards with other brands. It’s clear that if your loyalty program fails to deliver on the value proposition, shoppers will disengage. This is an opportune time for APAC grocery retailers to focus on effective offer delivery and management, tailored promotions integrated directly into their loyalty programs and more relevant and interactive loyalty platform experiences,” Jonathan Reeve, VP APAC, Eagle Eye said.
“Now is the perfect time for retailers to invest in capabilities that help them showcase the value of their loyalty programs to current and potential customers and increase existing member engagement. In fact, a staggering 76 per cent of consumers say they have joined new loyalty programs or used their existing memberships more frequently this year.”
Who is getting it right: Woolworths’ game-changing loyalty strategy
Woolworths, a prominent Australian supermarket chain, has been at the forefront of customer loyalty, continuously pushing boundaries and setting the standard for others to emulate. In fact, its dedication to customer-centric initiatives has recently been recognised globally at the International Loyalty Awards.
Taking home “highly commended”, Woolworths’ Everyday Rewards, powered by Eagle Eye, was recognised for Real-Time Loyalty — a new offer and loyalty management system that enables connected, personalised and seamless experiences for all 14-million and counting members.
This success is only further complemented by the remarkable participation of more than a quarter of a million people in Woolworths’ Everyday Extra subscription program. The figure is even more impressive, considering the program hasn’t been widely advertised. It’s grown largely via word-of-mouth referrals and recommendations in Facebook groups like ‘Woolworths Rewards Enthusiasts’.
Woolworths’ subscription model is a win with its super fan customers because they receive value that far exceeds the fee paid. At the same time, Woolworths comes out on top by obtaining a higher share of the customer’s spending.
Unlike most other retail subscription programs, Everyday Extra focuses on recurring benefits to in-store rather than online shoppers. For an annual fee of AU$70, subscribers receive benefits such as 10 per cent off one in-store shop each month at BIG W and Woolworths Supermarkets as well as “Extra Perks,” such as complimentary products from the local store.
The 10 per cent discount may encourage customers to consolidate their spending with Big W and Woolworths, whilst “Extra Perks” create a buzz on social media as subscribers have fun comparing their latest free products.
