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Missed connections: how failing to engage non-loyalty customers can cost grocers

Seize Digital
Author: Lucy Sharman-Munday

Many, if not most, grocery stores offer a loyalty program. They are a well-recognized and effective way of generating incremental sales, boosting customer engagement, and capturing customer data – something we examined in a recent blog post. What’s more, loyalty members often represent the lion’s share of overall revenue, and are widespread and popular among consumers (77% of Canadians belong to one, according to our Shifting Loyalties report).

That said, an individual grocer will still have a significant segment of customers that are not members. And with narrow profit margins and plenty of competition, it’s a segment that grocers can’t ignore.

More importantly, it’s a segment that grocers can eventually convert into loyalty members, if they know how to effectively engage with them at this point in their customer journey. Even if they’re not ready to join a loyalty program, these customers are still receptive to offers and promotions that are relevant to them. Over time, they may even be willing to forge an emotional connection with a grocery brand that can demonstrate it cares about their wants and needs.

But to get to that point – where grocers can send tailored, relevant offers and communications – it means starting small and building profiles on these customers before they join the loyalty program.

The value of customer data

The more a grocer can learn about a customer, the better equipped they are to deploy promotions and communications that drive repeat visits, redeemed offers and higher per-visit spend. Ideally, grocers should be able to get a holistic view of each customer based on data, which can include their purchasing history, preferences, how they want to be engaged, and how they interact with the brand. Loyalty programs, which typically gather identifiable information on a customer as a condition for joining (and then through various interactions thereafter), offer a natural collection point for much of this information.

Customers outside of the loyalty program are more difficult to track, as grocers don’t have identifiable information on them, but it’s not impossible. By employing a few low-risk data collection tactics, grocers have an opportunity to better reach and engage with these customers.

A discount for your data: a fair exchange

Consider this example:

A customer who does not currently belong to a grocery store’s loyalty program is in the checkout line. The cashier confirms that the customer is not a member, and gives them a 10% off coupon for their next visit, contingent upon the customer visiting a specific website. When the customer goes to the landing page, they are prompted to provide a small bit of data – their email address – to get the code they can redeem for their discount. When that customer redeems their 10% off discount on their next in-store visit, the store is now able to identify that customer, and begin tracking their engagement and behaviors with the brand.

Another way to capture an unobtrusive amount of customer data is to offer in-store WiFi that customers can connect to by providing some identifying information, typically an email address. Grocery shoppers receive value from the in-store connectivity, and grocers can leverage that customer information to deploy offers or track visits whenever the customer’s mobile device connects back to the WiFi network.

These tactics don’t cost the grocer much (in time or resources), but the payoff is often well worth it. Even a single identifying data point on a customer can facilitate tailored offers and relevant communications, which ultimately lead to more conversions and higher revenue.

Getting social

In fact, this process can be tweaked to capture customers who aren’t currently in the store, but “like” or interact with the grocery brand on social media. The grocer can offer these customers the same percent-off coupon, but require the customer to provide their phone number to receive the offer via SMS message. Now the grocer can track the customer’s activity in three channels – their mobile device, their social media platforms, and at the point of sale.

While a full-scale program will always offer more opportunities to collect customer data and drive incremental sales, using any data to understand and connect with customers can have an impact. Grocers can begin using the data they have right now to improve customer engagement and begin building relationships with their non-loyalty customers. And by capturing and using some customer data to better inform their customer interactions, they create more opportunities to capture additional customer data, in a virtuous cycle.

Building customer profiles – and their trust – takes time. It won’t happen overnight, but the more grocers lean into this cycle, the better positioned they will be in the long run.