Can Loyalty Apps Increase Consumer Loyalty?

BY Courtney Huckabay

The “Polygamous Store Loyalties: An Empirical Investigation” study used tracking data from a vendor utilizing a swipe card akin to a loyalty card. The researchers parsed more than $1 million worth of shopping transactions over 53 weeks involving 248 types of products sold at 14 retail chain stores in a large metropolitan market, Supermarket News reports.

A team of business school researchers led by Washington University in St. Louis found that the vast majority of shoppers are shopping at a vast number of stores, often in search of specific – and rather oddball – product categories, including dessert toppings, motor oil, candles, moist towelettes, lighters, automobile fluids/​antifreeze and refrigerated ethnic foods.

The vast majority of shoppers – 83% – regularly visited between four and nine chain stores over the course of a year to purchase groceries. Of the 1,321 households studied, only 12 stayed loyal to just one store. More than half – 51.1% – went to an average of five to seven different stores, and 88 households, or six of every 100, went to 10 or more. The majority of people are shopping at six grocery stores.

Stores can try to narrow shoppers' scopes by emphasizing killer loyalty apps and programs. The newest AudienceSCAN survey showed 10.6% of U.S. adults have at least ten loyalty cards/​programs/​apps that they use regularly.

The study examined the impact family size and family income have on shopping patterns. “We find that as family income increases, the loyalty to Costco increases,” senior author Seethu Seetharaman, director of the Center of Customer Analytics and Big Data said. “The effect of larger family size on store loyalty is most pronounced for Walmart Supercenters. We also find that as a category’s budget share increases, the household’s store loyalty to membership warehouses – Costco and Sam’s Club – increase.”

Offering a loyalty app that does it all could sway shoppers to one store. The latest AudienceSCAN study showed Loyalty App Users are 91% more likely than average shoppers to download and redeem coupons on their mobile devices. They might be drawn to apps that provide such coupons to their most loyal customers.

The study’s researchers found the top 10 categories of products that changed a store’s attractiveness over its competitors, based on the available breadth of assortment were: motor oil, candles, lighters, refrigerated dips, refrigerated baked goods, dry beans/​vegetables, moist towelettes, hairspray/​spritz, hair accessories and automobile fluids/​antifreeze.

When it comes to price consistency, consumers were most interested in the dessert toppings, refrigerated eggroll/​wonton/​tortilla wrap, pickles/​relish/​olives, peanut butter, toothbrush/​dental accessories, toilet tissue, cat litter/​dog supplies, refrigerated meat/​poultry products, snack bars/​granola bars and spaghetti/​Italian sauce categories.

The above items can be featured on loyalty apps to remind shoppers to come there for those specific items. The most recent AudienceSCAN study reported 36% of Loyalty App Users took action after getting text message ads and/​or mobile app ads in the past 30 days.

The study’s findings show that retailers have to rethink their marketing strategy. “The same store may need to engage in different marketing strategies in different product categories in order to win store loyalty,” Seetharaman told Supermarket News.

AudienceSCAN data is available for your applications and dashboards through the SalesFuel API. Media companies and agencies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.