Changing customer behavior without sacrificing your grocery store profit

Looking to attract new customers, bigger baskets, and more sales? Coupon platforms miss the mark. Here’s a breakdown of how to really push your grocery store profits.

The competition for customer attention is fierce. Trying to differentiate your business in the grocery industry takes more than a catchy slogan or jingle — you need to apply effective, proven strategies that get customers into your stores and keep them coming back. 

Grocers have a number of strategies at their disposal to give sales a nudge. In particular, coupon platforms have increased in popularity. Although they hold some short-term growth potential and might increase your store’s visibility, these programs end up costing you more in the long run — and largely fail to boost your same-store profits.

Let's explore where these coupon platforms fall short, how you can measurably change customer behavior and create loyal customers, and what to look for in a partner to guarantee a return on investment for your business.

Where coupon platforms fall short

There is a long line of discount products that claim to drive equal benefit to customers and merchants, but in doing so end up favoring one over the other. Many of those products have guided grocers to strategies that unnecessarily discount products when a customer would have paid full price, giving away margin for little to no return. Here’s where they’ve gone wrong:

  1. Broad-based promotions that don’t speak to customers

Major coupon platforms use little to no measurement or precision. Instead, they either provide blanket discounts to their user base or they bucket and target customers in segments based on some kind of demographic or spending criteria. Customers might jump on the occasional promotion or two, but these promotions rarely inspire loyalty and it’s impossible for retailers to know whether these views, clicks, or discounts result in any real behavior change or bottom-line grocery store profit.

  1. Third-party online sales are contribution-negative

While third-party delivery or ordering platforms might expand your reach a bit, transactions through these programs are contribution-negative and end up costing your bottom line more per product sold. Simply jumping onto additional marketplaces with high logistical and other upfront costs will negatively impact your grocery store profit.

  1. Double discounting with your current customer programming

Many grocery chains have loyalty programs already in place, but coupon platforms are rarely built to work in tandem with them. When sales are stacked on top of one another or customers are incentivized to purchase the same marked-down products, your grocery store profit will shrink even further. To make your loyalty program more effective, you should layer on additional (profitable) tools that will boost your program’s reach, not coupon platforms that will cannibalize your profits.

What your stores really need

One-time coupons and segmented promotions aren’t exactly the silver bullet to creating regular customers. Instead, let’s explore three tactics that can really change customers’ behavior and get them to consistently choose your stores over others.

  1. Personalized incentives that bring in customers

Instead of broad-based promotions, your stores need to leverage the data you already have to generate personalized incentives at scale for each customer. This will help you provide each customer with what they actually need to change their behavior and become a regular at your grocery store, capturing sales you wouldn’t have seen otherwise.

  1. Larger reach to stay top of mind

Loyalty programs are ideal for customer retention but not acquisition. Great loyalty programs get about 30% of their existing customers to sign up and about 10% to 15% of those customers to remain loyal. Coupon platforms are designed for just that — coupons. They’re not made to increase your brand’s visibility or awareness in a local region. Instead, go after the 70% and look for a location-based marketplace that keeps your store at the top of customers’ minds, making sure your brand is the first one they think of when it comes time to get their groceries.

  1. Zero-cost access to digital marketplaces with strong customer bases

Some marketplaces and platforms come at either an upfront cost to you or take a significant portion of every sale. The best marketplaces avoid those added costs by listing your business for free and focusing on driving measurable, incremental profit to your bottom line. 

The right platform for grocers

Amidst a sea of options, marketplaces like Upside provide personalized promotions that customers love. More importantly, they offer grocers substantial growth by attracting new customers, improving trip frequency, and increasing money spent per visit. Upside uses your own anonymized transaction data to provide targeted promotions that scale with your business and complement your existing strategies and loyalty programs. 

The time is now for grocery stores to improve their customer retention.

Learn more about how to keep your sales up and customers loyal using Upside