As the cost of food rises, Canadians are leaning on loyalty programs. A survey by Drop found that 62 per cent of respondents are redeeming loyalty points to help manage expenses.
In 2022, Empire Co. (which owns a national network of grocers, including Sobeys, FreshCo, and IGA) partnered with Scotiabank and Cineplex on the Scene+ loyalty program as part of its strategy to deepen ties to shoppers and better compete with other loyalty programs. It also allows them to have better access to customer data, which they can utilize to create a more personalized relationship with customers. This, in turn, encourages repeat customers—and with rising food costs, customer retention for grocery franchisers is more important than ever before.
Canadians are making fewer grocery store runs as food inflation persists, and loyalty programs are a proven way to motivate guests to continue visiting. Having a strong loyalty strategy in place is a great tool for franchisers to build relationships, retain existing customers, and motivate buyers to make their next purchase. The value of loyalty programs is evident—but grocery franchisers can take their customer loyalty programs one step further by implementing community rewards that give back to charities at the same time.
The history of grocery and community
This approach to loyalty is not new. Historically, community giving began in the grocery space as part of a fundraising program where grocers sold paper gift certificates to participating schools at a discounted rate. Schools would then resell the gift certificates at face value. While this approach had its advantages, it also posed some administrative and financial challenges for both the grocers and the schools. Now, community rewards programs provide grocers with the opportunity to give back to schools (and other non-profit organizations within the community), while also measuring the results on a customer-specific basis.
Community giving in 2023
During challenging economic times—like we are in now—some organizations might be tempted to cut back on corporate philanthropy efforts. Inflationary pressures are causing businesses to see rising costs, and companies have long seen community giving as an expense that provides minimal return on investment. However, with the right strategy, this is no longer the case.
Grocers that use community rewards are able to allocate their current community donations to the charities chosen by customers when they sign up. Just like loyalty rewards programs offer customers points for each purchase, community rewards programs allow loyalty members to select a charity of their choice that will benefit, proportionally, from their purchase each time they shop. The most powerful brand in community rewards is the organization receiving the benefits, and when customers choose the beneficiary, it becomes highly personal.
Not only do community rewards programs help to support local communities, but grocers can also take advantage of customized, customer-specific loyalty and measurable sales with the help of the right partner in technology. Meanwhile, customers get to support organizations that are dear to their hearts—a win-win.
Consumer loyalty tends to diminish amid inflation, with cost savings taking priority over brand affinity for many shoppers. It’s far more expensive for businesses to acquire new customers than it is for them to retain current ones, and a well-planned community giving program is an effective way to drive retention, while also giving back to the community.
Measuring community rewards
Grocers with a community rewards program in place also see greater customer loyalty. It demonstrates goodwill in the local community, which in turn fosters a sense of trust amongst consumers, who will want to return to provide support. Beyond bolstering its credibility in the community, grocers can also track their ROI through community rewards.
When a customer enrolls in a community rewards program, grocers will have detailed insight into when they shopped, and the amount of revenue that was generated through their sales. Having access to this type of data is highly valuable for any business, particularly when charities encourage their donors to shop at a particular grocer. This, in turn, takes the return on investment further.
There’s no time like the present
Community rewards programs are a powerful tool for organizations that are looking to drive return business and give back to the community—without compromising profitability. From a corporate image standpoint, charitable work can also bolster a franchise’s perception amongst the general public and potential franchisees.
The bottom line is that tough times are when the community needs our support the most. Displaying commitment to corporate social responsibility by implementing a community rewards platform is a great place for franchisers to start.
Andy Ruff has successfully implemented retailer specific cause marketing and community give-back programs. With Givex’s Community Rewards platform, Ruff’s team has generated more than $450 million given back to schools, churches, pet adoptions and other charities over the last 15 years. He has a passion for and keen understanding of how customer information, especially in cause marketing, impacts an organization’s marketing and brand identity and has worked with dozens of grocery retailers of all sizes in successfully implementing these strategies.
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