Industry-Specific Solutions in the Food Retail Sector

27.02.2019
The wallets of modern consumers are replete with discount cards, each self-respecting company has its own loyalty program, the retail sector is no exception.

Background

The background for loyalty programs development was created by economic growth and market saturation. They have caused intense competition which came together with high “advertising noise”. As a result the cost of customer acquisition went well beyond the profit from first purchase making it more efficient to build loyalty among existing customers. For example, an Internet contact with a potential mortgage loan borrower costs about 700 rubles, with an air transport customer – 250 rubles and with an insurer (Action Pay) – 450 rubles. A similar situation exists in the food retail sector. What is more, there are specific restrictions related to the fact that consumers are bound to store locations.

Seasonal factor

Activities under loyalty programs are tied up to general seasonality typical for the industry. The middle segment here has its high season in December and March and low season in summer. Maintaining sales is the priority in a low season while the high season is associated with “Holiday actions” designed to beat the competition and build customer loyalty.

Tools

SMS-messaging is an integral part of a set of tools which is used for loyalty programs. Among the advantages of short messages is the low cost of contact, maximum message personalization and high effectiveness.

Database collection

To leverage on the inherent benefits of this tool, one needs a customer mobile phone base. It can be collected in a number of ways. For example, using your own trading floor: a promoter may run a customer satisfaction survey and then, as a sign of gratitude, ask customers for their contact details and give a loyalty program card. A less efficient but more economic way of database collection on a trading floor would be a questionnaire stand. Another popular way is selling cards through cashiers; these cards will require an SMS or e-mail activation. A store web-site, especially a web-store, is an excellent way of collecting a base of loyal customers. You may offer a customer to subscribe during order making and get a discount for subscription. Many market players consider that the most economic and simple way of database collection is communication via a customer’s sales receipt.

Database legitimacy

According to the law, subscribers have to confirm their consent to receive bulk messaging. Such consent has to be explicit – that is the customer must realize what he/she consents to and clearly identify him/herself in doing so (leave his/her name, signature, mobile phone number and e-mail). Filled in customer information forms aredeemed to be confirmation of consent, and they must be kept permanently as web-site logs, electroniccopies or paper documents. If consents are collected via SMS (e.g. by sending a message to a shortnumber), they are keptpermanently with the provider of an SMS-messaging service. A customer phone conversation recording may also serve as confirmation of consent.

Types of SMS messaing

After the first step of collecting and legalizing your database, you need step two which is developing a communication strategy for your customers. Bulk messaging can be conditionally divided into service, promotion and intra-company. They have different objectives which affect the manner in which they are used.

Service messages

These are messages aimed at building customer loyalty. They notify customers on the movement of points on their loyalty cards, opening of new stores, they are the means of receiving feedback on the quality of goods in a store or of favoring a customer with holiday greetings. They do not contain obtrusive advertising and improve communication value.

Promotion messages

As the name suggests, the purpose of these messages is to increase sales but that doesn’t mean they are limited just to discounts and promotions information. They contain information on new collections, food samplings, sales; popularization of other promotional activities of the company and promotion of own media. Even promotion messages should observe correctness and consistency: remind customers of current actions or offer best terms and alternatives.

Intra-company messages

Large chain companies face a crucial task of personnel coordination. The trading floor is a place where customer loyalty is gained and easily lost. The personnel must be timely notified of all current actions and company policies. Personnel is at the heart of customer experience which cannot be replaced by even the most effective loyalty program. Any chain retailer also comes across another critical issue of personnel recruitment and coordination of employment document flow because Head offices with HR departments are usually removed from the immediate workplace of employees.