Shopper loyalty in inflationary times was the topic of The Shelby Report’s recent webinar held with New York-based AppCard and featuring members of Metcalfe’s Market and Neighborhood Fresh.
AppCard is a personalized marketing shopper analytics and digital coupons platform with some five billion transactions and caters to more than 1,500 independent grocers, according to Eran Harel, VP of corporate development and strategic partnerships at AppCard.
“The mission is to work with independent grocers and to help the independent grocers competing particularly in times like today when shopper’s sentiment and behavior changes,” he said at the beginning of the Sept. 27 webinar.
AppCard achieves this by helping retailers regain control over their conversation with shoppers, which enables those retailers to “reduce the advertisement cost and increase conversion.”
Prior to the pandemic, customers were spending more on out-of-home food and drinks. During the pandemic, there was a dramatic shift into eating and drinking from home. Following the pandemic the restaurant and bar industry saw a resurgence before mounting inflation brought customers back to the kitchen, according to Harel.
“When we talk about inflation now and we talk about the impact of inflation…we also need to understand that here, we have an impact that is even greater on the west coast than is in the east. At the same time, when we talked about the opportunities or we talked about the downside and the importance, with the rise of prices of offering value, allowing the shoppers to be valued, we need to take into perspective that throughout the country, the inflation and the rising prices have impacted greatly across the board. There’s no markets that were exempt,” Harel said.
Harel emphasized the importance of bringing together and continuing to connect with their local communities. People are continuously looking for ways to save money and are “always looking for the best deals.” Independent grocers will be able to accomplish this by continuing to offset costs for consumers however they can.
Harel explained that being able to “capture the data and understand who is coming into the store,” retailers will have a better understanding of how to continue driving their business forward. AppCard hopes to help grocers accomplish this by bringing all the customer data available into one easily accessible platform.
Darlene Murphy, marketing director for Metcalf’s Market, explained that her brand has been utilizing the AppCard program for “about three years” while Todd Taylor, owner of Neighborhood Fresh, has been using AppCard at his stores for nearly two years.
Murphy said that due to inflation, labor shortages and supply chain dejection, customers have been required to become more flexible in their spending habits.
“[Customers] may not have been able to find the particular size or brand or flavor of an item that they’ve wanted. As a result, I think that they’ve become more open to the idea of using a digital coupon on one of those new items that may not have interested them before… Customers have been required to become more flexible in a lot of ways, and sometimes it’s changed their habits. They’ve decided not to shop in store so they shop online instead, and we’re able to offer them all of the same great benefits like rewards and digital coupons as part of the online shopping experience,” she said.
Taylor explained that prior to acquiring AppCard’s services, Neighborhood Fresh was seeing around 100-250 paper coupons redeemed a week across four stores. At the time of the webinar, he said that he has seen approximately 2,500 digital coupons redeemed within the same time frame.
“For people to feel as if they’re winning the budget battle against inflation is a big deal. So that 2,500, that is a number we would never have seen that kind of paper redemption. That has really given us a step up against inflation,” he said.
Harel then drove the conversation toward community-driven advertising campaigns that have seen success with the help of in-store customer data analytics.
Taylor began with AppCard’s communication campaign success in stores, with over 36,000 customers signing up with their phone number. Approximately 18,000 email addresses have been collected, in addition to newspaper circulation that helps drive customer engagement without the use of a completely digital medium.
“The acceptance of the program has been phenomenal. I would never have guessed we would hit 36,000 customers in a year and half. We ran a promotion that every time you shopped in the store and entered your phone number, you were entered to win a $100 Neighborhood Fresh gift card that day. During the month, we surprised and delighted 31. I loved it. I would argue that it’s the best $3,100 we ever spent. We saw our sales transaction dollars running through the AppCard portal…We saw those sales dollars go from around 45 percent running through the AppCard to 55 percent.”
Murphy added that her company’s personalized digital coupon email chain reaches about 34,000 customers. She also explained that these types of campaigns and targeted advertising help to persuade new and non-regular customers and encourage positive customer behavior.
“We target loss shoppers, folks who have not been with us in at least eight weeks and have been spending about what our average basket is. We target mid-level shoppers… We provide them with an offer that gets them to spend more like a top shopper. Last quarter, we ran an offer for them that was $10 off $100. We saw about a 23 percent redemption… More importantly, the average basket when they redeemed that 10 percent off was $152,” she said.
These examples were part of a larger Q&A session toward the end of the webinar. To view the full presentation, click here.