Know-How Exchange : Customer Behavior

Around here (in the US) the main factors are cleanliness with brand (is it clean and have a prestigious brand?), and price with cleanliess.

People will pay a dollar more per item to shop at an Albertson's (clean and prestigious), but will also flock to Walmart (clean and cheap...OK, the parking lots are nasty, but most Wal-mart stores are pretty nice and well kept).

The stores that almost alwaysa hit rock bottom are the ones who overcharge (like Albertson's) yet have not developed any kind of brand equity, and the stores who sell items for dirt cheap but the stores are so dirty you can barely stand to walk in the door...not to mention the weekly News broadcasts about bad meat, swollen cans of beans, etc.

So there seems to be a common denominator: cleanliness. Your prices can be determined by your brand...are you are discount store or the nicest place in town?!?!!

Hope this helps!

The first thing to realise is that there is no such thing as ABSOLUTE loyalty in this market! After all, a majority of the products stocked by supermarkets are what we call convenience goods - i.e. you tend to buy them wherever you find most convenient. Now I accept that when it comes to a big weekly shop, you might go out of your way to get to a store you prefer, but that doesn't mean that you'll go out of your way when it's just a jar of coffee or a box of tissues you find you need.

The first marketing lesson from this is that location is a very important part of the marketing mix for a supermarket chain - one which two of the leading chains here in the UK have recognised recently. Tesco and Sainsbury (both of whom are rivals in the large supermarket game) are now also actively buying-up chains of small convenience stores and re-branding them with their own fascias and layouts.

That doesn't mean, of course, that you can't also put into place a lot of tactical tools to encourage customers to come back - and earlier posts have given you a good list of some of those.

I'd also endorse laqa11's recommendation to read "Scoring Points" - it's the story behind the Tesco loyalty programme and well worth reading. (At least read the first chapter which discusses different types of loyalty and the importance, not just of trying to make customers loyal to the store, but also of the store demonstrating loyalty to its customers!)

Good luck,
Bob

Martin, I can offer you my personal view on supermarket loyalty, because I've been keenly aware of my own "emotional ties" to certain stores.

Take Randall's, for instance: A local success here in Houston, my favorite for years... until it was acquired by Safeway. Then it lost some of its quality in the fresh goods (produce, meat, seafood), the long-familiar faces of the staff changed, the floor managers became practically invisible, and the place "felt" different... too generic, too corporate, less like a neighborhood business. Not enough cashiers anymore, either. I used to look forward to grocery shopping, then I dreaded it.

Then there is Kroger: I shopped there when I moved to a different part of town, but I hated that store. Yes, the loyalty program card offered good discounts. Yes, it had decent fresh goods, although not a very creative selection. The employees were pleasant, but none of them acted as if they were happy to be there. Sections like the salad bar didn't seem too clean. The only thing I actually liked was the pharmacy, probably because the staff had low turnover and remembered me when I came in.

Now I'm having a love affair with H.E.B., a Texas-based chain that has finally started opening stores in Houston. Big store, great produce, seafood, butcher counter, bakery, even sushi chefs. Lots of variety on the shelves, including in ethnic categories. Priced VERY competitively. Employees seem to take a lot of pride in themselves and their jobs.

I agree with Andrew (aosterday) about Whole Foods, by the way. Would love to shop there (or at H.E.B.'s copycat store Central Market) regularly, but their high quality comes at a steep price. And their locations are not convenient -- over in the rich neighborhoods, naturally!

So... that is my story, and I'm sticking to it. Does it fit Ajay's list?

¤ Shelley ¤

Martin,

You've been given some great advice. Even jstiles offers great advice about the whole thing. I think this is the kind of question that everyone can chime in offering you their own personal experience so I'm with Shelley on this one. I have found for me the stores that keep me coming back again and again causing me to be loyal are those that make me feel at home. I love it when people have a down home atmosphere with great employees that seem to be available right when you need them. Price is a factor but I've paid more for the atmosphere, cleanliness and the quality of the fruit at stores. The Meijers brand comes to mind because they offer all of the above including one stop shop where you can buy food and a pair of BVD's all at the same place for a great price. So I think creating customer loyalty has the following.

Quality fruit
Helpful employees
Down home atmosphere
cleanliness
one stop shopping

Martin thanks for a great question. Is there anything else I can do for you?

Your Servant, Deremiah, *CPE (Customer Passion Evangelist)