Is customer loyalty going green?
With sustainability becoming a bigger and bigger priority for shoppers, grocers have an opportunity to earn customer loyalty and build their brand, while doing their part for the planet. Joel Percy, regional director at Eagle Eye Solutions in Canada, has extensive experience in developing loyalty programs for retailers, including helping to design, launch and run Loblaw Companies’ PC Plus. He explains why “green rewards” should be on grocers’ radar these days and why the benefits in implementing future green programs will be well worth the effort.
What are green rewards?
We typically see this term lumped together to describe incentives offered to shoppers to make environmentally friendly, sustainable and ‘better for you’ choices. It’s really anything where you’re giving customers information and incentives to make purchase decisions that are better for the planet and better for their health.
Why is green loyalty gaining momentum now?
Through my work with retailers in launching loyalty programs and in consulting with technology partners, I’ve sat in on conversations with those who are designing strategies to launch new programs or looking to evolve their current ones. Green and healthy initiatives are top of mind and part of the conversation more and more. We’re in that interesting phase where consumers want it and retailers want to offer it but no one has quite cracked the code in how to successful execute it.
Do the majority of shoppers want green incentives?
On the environmental side, the demographic tends to skew younger, but on the health side it’s across the board. I don’t think we’ll see any demographic say they’re not interested in healthier choices and that can often mean more sustainable choices too. But it’s important for retailers to understand that green programs are not a silver bullet: there are a large number of people for whom sustainability efforts will resonate and for others it won’t.
What’s in it for grocers besides doing good for the planet?
Grocers are always looking for ways to engage with customers beyond deeper discounts and prices wars. This is a way for them to be customer-centric and, from a business perspective, these incentives often mean shoppers switching to a higher-margin product. The 2024 Eagle Eye Green Loyalty Survey showed that 48% of North American consumers consider it extremely or very important to shop with a retail brand that aligns with their values on sustainability, environmental awareness, responsibly sourced products, and carbon impact; 82% of respondents who prioritize sustainability said they would pay a premium for a sustainable product over a comparable item. Also of interest is that 73% of respondents with children would pay more for a sustainable product. There are subsets of the population who are going to use this to make their purchasing decisions and shop at the stores that provide this information.
READ: Why grocers need to get creative with their rewards programs
Plus, green initiatives can be a next marketing anchor for existing loyalty programs that have lost momentum. It gives retailers something new to talk about while giving customers something they can feel good about taking part in.
How can grocers start to develop these kinds of programs?
It’s about finding channels where they can have conversations with customers, either digitally or in person, to introduce these initiatives and see if they resonate. You could go old-school with signage noting healthy or more sustainable swaps for products. And then there’s artificial intelligence and data foundations that will eventually enable retailers to personalize offerings for customers based on their preferences. In terms of better for you choices, Woolworths in Australia has a healthier food swap as part of its loyalty program. Shoppers scan their Everyday Rewards card to check the balance of food groups among their purchases and get suggestions for healthier options. There are some Canadian grocers who have the foundation to be able to go in this direction too.
While I don’t know of any grocery retailers doing this successfully, we’ve also had retailers ask about being able to estimate a grocery shoppers’ carbon footprint over the course of year so they could indicate how shoppers are helping the planet with certain purchases. There are already firms that have databases on the carbon footprint of a range of package products that could be tracked.
If I was in leadership in grocery now, I would be trying stuff in this space especially because customers are saying they want it. No one will get this perfect on their first crack but it is coming and it’s better to get ahead of it.
