Introduction
If I ask you — “Where do you get your lipsticks from?”, you would quickly say Sephora or Mac Cosmetics. Most of us are quite loyal to the cosmetic brand we use. However, when asked about the hypermarket store you purchase from, you have several options on your mind —- Walmart, Target, and so many others. That’s the blasphemy of hypermarket brands. People quickly change their preferences according to their demands. This is reflected in the fact that 83% of customers visit 4 to 9 grocery stores in a year, and only 1% are loyal to a single chain.
A huge challenge for grocery stores is that they have really low margins on their business. So, it becomes difficult to offer attractive discounts and other promotional offers to the customers.
Before we get into customer retention strategies, let’s understand the psychology of your customer and what factors lead to this fluctuating loyalty.
Studying the Modern Hypermarket Customer
The modern hypermarket customer has a smartphone 24×7. They have great awareness about everything and that has made them increasingly demanding. Moreover, they can compare the prices of different products throughout the various channels. As a result, they can make better decisions and choose the right products in line with their preferences. Having access to too many alternatives have also affected their brand loyalty and made them switch between brands according to their convenience.
So, what exactly contributes to the fluctuating loyalty? Let’s take a look at the factors
Factors Affecting Customer Loyalty
According to Forbes, U.S. companies lose USD 136.8 billion per year owing to avoidable customer switching. The success rate of selling to a new customer is merely 5-20% while in the case of an existing customer, it is 60-70% as they are less price-sensitive. Customer churn not only damages the reputation but also curtails profitability, leading to losses.
There are a number of factors that affect brand loyalty of a hypermarket customer. They are discussed below:
- First comes the overall shopping experience. Store navigation, ambiance, and customer service play an important role in retaining customers.
- Every customer is looking for ways to save money. If you want to attract more customers, you ought to deliver value to the customer in addition to discount offers.
- Most of the customers prefer to shop from online grocery stores owing to its convenience. Hypermarkets have to compete with the speed and ease of online shopping while maintaining the in-store experience as a compelling alternative.
- If your customers don’t see an extensive range of brands, they are sure to bounce off to the competitors.
- Is there anything unique about your hypermarket? Introduce offers or strategies that would differentiate your brand from others and compel the customers to choose you.
Does this discussion make you think about customer retention strategies? That’s exactly what’s coming up next.
How to Build an Impactful Customer Retention Strategy?
To make your eCommerce business thrive amid fluctuating loyalty and intense competition, hypermarkets must focus on delivering a smooth digital experience. Here are some actionable tips to help you achieve this goal:
1. Understanding the customers
The road to a memorable customer experience starts with understanding them well. Craft different customer personas and segment them accordingly. Implement powerful customer data analytics to get insights into their shopping behavior,purchase patterns, and customer lifetime value. You can also take the help of loyalty programs to collect customer data.
Customer data includes parameters like:
- Demographics
- Brands and product categories frequently bought — organic, sugar-free, gourmet, etc.
- Shopping behavior — average basket size, time of the day/days of the week or month preferred for shopping, etc.
Here are some market segments to consider for your hypermarket business:
You can take the help of an expert eCommerce consulting agency to formulate the right plan for different customer personas.
2. Delivering long-term value instead of short-term gains
In addition to pricing tactics, you also need to focus on value-added services. Offer free home delivery and click-and-collect features. Strike the correct balance between profitability and customer satisfaction. Stand out from the competition by introducing exclusive products and brands. Also, have a feedback form wherein customers can let you know their opinion and suggest a product or brand you should add.
Take a look at this survey email by Walmart that encourages the users to share their feedback.
Source: Mopinion
Alternatively, you can also incentivize the users to make them share their feedback.
Source: Mopinion
Such eCommerce strategies will build the customer’s trust and make them feel special, thereby increasing the likelihood of retention. However, it is even more important that you take the feedback seriously and work on the shortcomings.
3. Improving the shopping experience
Invest in creating a seamless digital experience. Deliver consistent messaging strategy across all the channels. Create a welcoming and efficient shopping environment for all your offline customers. Work on your store ambiance and lighting too. Just like website and app navigation helps in building online reputation, in-store experiences like interactive displays, product demonstrations, and personalized customer service with relevant recommendations.
4. Fostering Customer Loyalty
Introduce a tiered loyalty program to reward customers according to their spending and engagement. This will compel them to purchase again and again, thereby facilitating customer retention.
For example: Walmart has an exclusive Walmart Cash Offers program that encourages people to redeem the promotional Walmart Cash toward future purchases from their online or offline stores.
Users can easily claim manufacturer offers and get Walmart Cash on purchasing eligible purchases.
Organize events, workshops, and social media giveaways to create a sense of community among customers. You can even launch referral programs. It will not only help you retain the loyal customers but also contribute to the acquisition strategy. For example: Carrefour has an exciting referral program that offers a 10% discount on the first order to the referral and a 10% discount on the next online order to the referee.
5. Managing Customer Lifetime Value
To start with, recognize high-value customers and maximize their spending through personalized marketing communications. Employ retention strategies to prevent customer churn and encourage repeat purchases through cross-selling and upselling opportunities.
For example: A customer buying steak might be offered red wine and barbecue sauce to go with it as a cross-selling endeavor. Or in an upselling strategy, a customer going for a regular coffee gets a recommendation to buy a premium blend or organic coffee or a bigger pack of the regular coffee.
6. Applying innovative technologies like AI
AI has entered brick-and-mortar stores to streamline retail operations with visual intelligence. It lets the store owners monitor what happens on the shelves so that they can understand the shopping behavior of the customers. Data analytics along with visual intelligence lets you analyze the customers’ needs and their receptiveness to different displays. Store owners can also use image-recognition technology to create real-time analysis of the whole store and ensure smooth retail execution even with less manpower.
Here’s a chart showing the different uses of AI in hypermarkets.
7. Optimizing the strategies according to the metrics
Analyze the metrics like customer lifetime value, customer churn rate, repeat purchase rate, and net promoter score. Keep a constant eye on these metrics and optimize the retention efforts accordingly.
Conclusion
Retaining customers in the hypercompetitive retail landscape requires a multifaceted approach that focuses on understanding customer needs, delivering exceptional value, and building strong relationships. By investing in customer experience, loyalty programs, and data-driven insights, hypermarkets can navigate the challenges of fluctuating loyalty and emerge as leaders in their industry.
Table of Content
Subscribe with Us!
Never miss any post, stay tuned!
Digital transformation expert and trusted advisor to global brands. With a career dedicated to navigating tech's evolution, she's led successful initiatives, driving businesses into the ecommerce future. Beyond the boardroom, she finds solace in mountain retreats, cherishing moments of inspiration with a bowl of Maggi. Whether crafting strategies or exploring new heights, Shruti's journey exemplifies innovation, resilience, and a zest for life's adventures.
Recommended Reading:
Optimizing the Omnichannel Strategy for Supermarkets: Featuring Grandiose Supermarket’s Success Story
5 September, 2024 With major players like Walmart, Tesco, Lotte Shopping, Kmart, and Tesco, the supermarket industry has a market size of USD 0.98 trillion as of 2024. This figure is expected to touch USD 1.16 trillion in 2029.
Subscribe with Us!
Never miss any post, stay tuned!
Trusted by leading brands
