News Feature | January 13, 2014

5 Loyalty Lessons Loblaws Learned

Source: Retail Solutions Online
Jim Roddy

By Jim Roddy, Vantiv

Loblaws patisserie

By Jim Roddy, Integrated Solutions For Retailers

About 30 years ago, the grocery store where my family shopped was a Loblaws. The nicest thing I can say about it was that it was functional. The store was essentially a combination of products, shelving, coolers, and linoleum flooring — nothing more than that. Fast forward three decades and Loblaws now looks like this and this. The stores are better functionally and architecturally for sure.

Loblaws has advanced in many other areas as well, namely customer loyalty. Peter Lewis, the senior director of customer analytics and loyalty for Loblaws, was a featured speaker on Jan. 12 at Retail’s BIG Show, hosted by the NRF at New York’s Javits Convention Center.

Lewis shared with retail executives his company’s lessons learned and metrics related to Loblaws’ relatively new loyalty program.

Lesson 1: Stay focused on your target audience.

Understand who your best customers are and cater your strategy to them. Prior to launching its loyalty program, Loblaws had only 55-65 percent of its best customers’ wallet share, so there was opportunity to improve.

Lesson 2: Don’t try to solve every edge case problem.

It’s not realistic to cater to an extreme 1 percent of your customers and not damage the 99 percent of preferred customers. “You are welcome to shop here but we won’t invest in you,” Lewis said.

Lesson 3: Website and app consistency is important.

They don’t have to be identical because they are different experiences, but the core needs to be consistent. For example, use consistent language and consistent functionality. Lewis said a key to accomplishing this outcome is coordinating the providers who develop your site and your app.

Lesson 4: Keep the sign-up decision simple and relevant.

Many customers will make the loyalty sign-up decision in the store, so if it takes too long they will abandon the process. Lewis said your message should basically be “it’s easy and free to sign up and you get free stuff.” Sign-up language should be simple and clearly explain the program’s value.

Lesson 5: Fight like hell to keep reporting in scope.

Because this aspect isn’t customer-facing, retailers often lose focus on this aspect of their new loyalty program. “It’s just as important as the other elements,” Lewis said, “because without it you’re flying blind.”

Lewis also shared several metrics related to Loblaws’ program:

  • 6,000 customers per store registered
  • 50 percent email open rate
  • 35 percent click-through rate
  • 3x lift in sales vs. printed flyers
  • 12 percent increase in visits
  • 5 percent increase in basket size
  • 7 percent increase in categories. Loyalty program participants purchased more categories from Loblaws compared with their behavior the previous year.

“Listen to your customers and deliver on that experience,” Lewis said.

Retail’s BIG Show and EXPO, hosted by the National Retail Federation (NRF) and billed as the world's leading retail event, is being held Jan. 12-15 at the Javits Convention Center in New York City. The event expects to attract 29,000 retail executives and 550 exhibitors from more than 80 countries together for educational and networking opportunities.