Gamification: The Next Grocery Retail Loyalty Trend in APAC?
As the market across APAC tightens and prices increase, the pressure is on customers to unlock better value at the checkout counter. In this article, Jonathan Reeve, VP APAC at Eagle Eye takes a look at an exciting new trend emerging in the grocery retail sector, and how it impacts customer loyalty in the region.
Tighter market fuelling the the search for better value at the counter
Whilst the APAC region may have held up well in the current economy, ending 2022 with a much lower inflation rate (4.4%) than the rest of the world (7.9%), 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%), eating at home more (50%) and actively seeking out offers and promotions (54%).
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% are actively seeking out items for which there is an offer or promotion available
47% are much more aware of items on sale or promotion
58% leverage existing loyalty programs more frequently to save money
54% 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%).
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. And that is where ‘gamification’ can open exciting opportunities.
Gamification and groceries: an exciting opportunity
Whilst contextualised marketing is hyper-targeted to the moment, gamification introduces a different and variable element to loyalty program engagement. Gamification provides a high degree of interactivity, which increases the time consumers spend engaging with their loyalty programs. It works because consumers love games, and loyalty programs are ideal for combining games and savings.
In APAC, specifically, gamification is an effective way to increase membership in a loyalty program. In fact, 74 per cent of APAC consumers say they would or already do participate in games, contests or challenges through a company’s loyalty program or app.
The best part of gamifying the loyalty program experience is that it doesn’t necessarily mean overhauling the entire loyalty program. Solutions exist that can layer gamified elements on top of an existing loyalty platform, meaning they can be integrated without disruptions or significant implementation time or resources.
Is the grocery retail sector failing to adapt?
Despite this, however, only 60 per cent of loyalty programs they belong to actually offer games, contests or challenges. This gap represents an opportunity for APAC grocery retailers to expand their gamification initiatives to boost loyalty program engagement. When deployed at scale and utilising cutting-edge technology – think AI and machine learning to automate the creation, execution and measurement of game-like challenges – gamification can be a loyalty game-changer.
Unfortunately, retailers find themselves behind this trend. Less than a quarter (21%) of companies polled think gamifying the shopping experience is what consumers respond to most. They also ranked gamification last in perceived importance to consumers. Only 23 per cent plan to introduce gamification elements into their loyalty programs in the next three to six months. Only when retailers overcome this short-sightedness will they be able to take advantage of this opportunity.
Seizing the great grocery loyalty opportunity in APAC
The good news is, many retailers are ready to seize the loyalty-related opportunities available to them. Many loyalty program professionals surveyed indicated a willingness to invest in scalable, feature-rich loyalty program technology. In fact, 82 per cent say their companies have invested in their loyalty program’s technology during 2022, and 80 per cent plan to do so in 2023.
In the future, grocery retailers must prioritise alignment between their loyalty technology provider and the capabilities required. Executing personalised offers at scale, Marketing in the Moment and gamification of the loyalty program experience requires a tight orchestration of inputs and outputs, alignment across three key stakeholders (the customer, the retailer and CPG brands) and significant investments in resources and technology.
Even major global retail brands that have implemented next-generation loyalty strategies, like Woolworths in Australia and Asda in the UK, found it burdensome to dedicate internal resources to developing these capabilities and turned to a third-party technology provider to improve their systems and platforms. This illustrates how critical it is to find a partner like Eagle Eye with the appropriate tech stack, skill set and experience in developing scalable, enterprise-level solutions.
Investing in grocery loyalty programs that deliver
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.
For the loyalty program managers who predict higher levels of engagement in the next year to be proven right, they’ll have to deliver a high-value, high-touch loyalty experience that gives consumers a compelling reason to use their programs.
Brands know this. But are they investing in the right features and options to help them achieve their goals of increasing membership and engagement? To do that, they must make the most of three major opportunities for grocery loyalty programs right now: advanced personalisation, marketing in the moment and gamification.
To take advantage of these opportunities, retailers should place an increased focus and investment on personalisation and look for solutions that can quickly scale their promotions, improve customer interactions and deliver measurable and profitable returns. By demonstrating value, personalising loyalty experiences at scale, marketing to customers in the moment and incorporating gamified interactions, grocery retailers can solidify their relationships with their customers for years to come.
Woolworths: An Australian Grocery Retail Game-Changer
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”, Woolworth’s 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. Creating a community of customers with a shared passion for your brand was one of four steps to creating a winning loyalty program identified by McKinsey & Company in its recent Australian Consumer Loyalty Survey.
