Merchants and retailers can greatly benefit from customer loyalty. It's a win-win situation for both parties involved. But how can merchants build customer loyalty while also actively participating in one? Let’s explore why loyalty programs matter for merchants and use examples to understand their benefits better.
Importance of Loyalty Programs for Convenience Stores
Loyalty programs help businesses build relationships that generate revenue for the company while benefiting the customer. The main goal of loyalty programs is to encourage customers to commit to the brand and return for future purchases consistently.
Loyalty programs are crucial for businesses of any type. They establish a trustworthy image and strong presence in a competitive market. By encouraging loyalty and appreciation among customers, merchants, business owners, convenience stores and many more secure repeat business and acquire brand advocates who genuinely support their products. This ripple effect extends beyond conventional success metrics, influencing the long-term sustainability and growth of the brand.
Business Model
| Benefits
| Target Audiences
| Aims of Loyalty Program
|
|---|---|---|---|
B2B (Business to Business) | Long-term contracts Higher order values Stronger client relationships | Businesses Corporations Organizations | Build long-term relationships Increase repeat purchases Offer personalized service and support |
B2C (Business to Consumer) | Higher customer retention Increased lifetime value Better brand advocacy | Individual consumers
| Encourage repeat purchases Increase average transaction value Promote brand loyalty |
D2C (Direct to Consumer) | Direct customer relationships Better control over brand experience Higher margins | Online shoppers Brand loyalists Niche market consumers | Increase customer retention Enhance brand loyalty Gather customer data for personalized marketing |
Convenience Stores | Increased customer retention Higher purchase frequency Increased average transaction size | Local residents Commuters Occasional shoppers | Encourage repeat visits Increase basket size |
The table above shows different types of businesses and their needs in terms of loyalty programs. From the table, one can conclude that loyalty programs, even as a word-of-mouth tactic, are needed for every business type. Convenience stores can and will benefit from participating in one, although the cost to do it themselves may not be fruitful. Why, you may ask, let’s look at the challenges they face as a small business.
Checkmate at Checkout: Convenience Store Challenges
Convenience stores cater to a small and local audience.
Unlike larger retail chains, convenience stores cater to a smaller, more localized customer base. This intimate customer relationship can be both a strength and a weakness. While store owners often know their customers personally and can provide tailored service, this limited audience can make it difficult to justify the costs and logistics of implementing a sophisticated loyalty program.
Local audiences don’t have specific needs.
Convenience stores often experience high customer turnover, with many shoppers visiting periodically rather than regularly for immediate needs. This irregular shopping pattern complicates building a consistent loyalty program that incentivizes repeat visits.
Moreover, the diverse needs of convenience store customers—ranging from snacks and beverages to emergency household items—mean that a one-size-fits-all loyalty program might not effectively cater to all patrons.
Convenience stores simply don’t have the budget.
Most convenience stores operate on tight margins and limited resources. Implementing a loyalty program requires investment in technology, marketing, and ongoing management—resources many small store owners simply do not have. The complexity of managing such a program, from tracking points to issuing rewards, can be overwhelming without dedicated staff or automated systems.
With these challenges at hand, convenience stores are afraid of biting more than they can chew, and they are right. But even if they don’t have what it takes, how can they benefit from loyalty programs?
Quick Stops, Big Rewards: Loyalty Programs for Convenience Stores
Convenience store loyalty programs can be achieved through collaboration with big companies. This approach enables convenience stores to offer compelling loyalty programs without bearing the full development and maintenance burden. Let’s look at how big companies do convenience store loyalty program initiatives and what types of loyalty programs are used in the process.
1) New Seasons
New Seasons Market, a grocery and convenience store chain in the Pacific Northwest, collaborates with local farms to provide fresh, regional produce. Customers earn points on purchases through their Neighbor Rewards program, including local produce, which can be redeemed for discounts and special offers. This B2B collaboration highlights the store’s commitment to supporting local agriculture and providing high-quality, fresh products to its customers.
How does it benefit customers?
Customers benefit from this with access to fresh, high-quality produce sourced directly from local farms, ensuring better taste and nutritional value. By purchasing locally sourced products at New Seasons Market, customers contribute to the local economy and support small-scale farmers in their community.
The Neighbor Rewards program incentivizes customers to choose locally sourced produce by offering discounts and special offers, rewarding their loyalty to the store and the local farming community while benefiting from a sustainable food chain.
How does it benefit local farmer shops?
This approach exposes local farms to a broader customer base, enhancing their visibility and brand recognition.
Collaborating with a reputable retailer like New Seasons Market provides local farms with a steady market for their produce, reducing uncertainty and volatility in sales.
Customers are more inclined to support local farms when they see their products prominently featured in a trusted retailer like New Seasons Market, fostering community support for small-scale agriculture.
Building relationships with New Seasons Market can lead to long-term partnerships and recurring business opportunities for local farms, contributing to their sustainability and growth.
2) Paid Pantry
Plaid Pantry, a convenience store chain in Oregon, has partnered with local coffee roasters to offer exclusive blends as part of their loyalty program. Customers earn rewards points on all purchases, which can be used to receive discounts on these locally roasted coffee products. This partnership promotes local businesses and provides customers with high-quality, unique coffee options, enhancing the overall shopping experience.
How does it benefit customers?
Customers earn rewards points on all purchases, which they use to get discounts and special coffee blends that taste like no other! Choosing locally roasted coffee from Plaid Pantry allows customers to support small businesses in their community, fostering a sense of connection and pride in supporting local entrepreneurs.
Supporting local coffee roasters reduces the environmental footprint associated with coffee production and transportation, aligning with customers' desire for sustainable and eco-friendly purchasing options.
How does it benefit local stores?
They now have access to a wider audience, their brand is recognized, and they have earned the title of a trusted establishment.
Offering their coffee blends as part of a loyalty program incentivizes customers to purchase from local roasters, increasing sales and revenue for these small businesses.
Plaid Pantry may collaborate with local coffee roasters on marketing efforts, such as joint promotions or tastings, further boosting visibility and driving sales for both parties.
3) Coca Cola & Family Mart
Coca-Cola, a leading beverage company, collaborated with Family Mart convenience stores in Japan to offer exclusive Coca-Cola branded products and promotions. As part of the collaboration, Coca-Cola likely introduced exclusive branded products tailored to Family Mart stores. These products may have included limited edition Coca-Cola beverages, special packaging designs, or unique flavours that were only available at Family Mart locations. These exclusive offerings aimed to attract customers and differentiate Family Mart from competitors.
How does it benefit customers?
Customers gained access to Coca-Cola's extensive portfolio of beverages, including iconic brands like Coca-Cola, Sprite, Fanta, and more, providing them with a wide selection to choose from. Unique offerings provided customers with novel and exciting beverage options that they couldn't find elsewhere, enhancing their shopping experience. Customers gained access to various discounts, and Family Mart's widespread presence across Japan made it convenient for them to purchase Coca-Cola products wherever they were.
How does it benefit Family Mart?
The partnership attracted more customers to Family Mart stores. This increased foot traffic translated into higher sales and revenue for Family Mart.
Collaborating with Coca-Cola, a globally recognized brand, enhanced Family Mart's brand image and credibility.
Family Mart generated additional revenue through the sale of Coca-Cola products and the promotional tie-ins and discounts offered as part of the collaboration. Increased sales of Coca-Cola beverages would have contributed to higher overall store sales and profitability.
Partnering with Coca-Cola provided Family Mart with a competitive advantage over other convenience store chains that did not have similar collaborations.
Final Words
Customer loyalty is a must for all companies looking to grow. B2Bs, B2Cs, and even convenience stores should hop on to loyalty programs to see more revenue and ensure stable customers, not unprotected walk-ins! If you are a B2B seeking to collaborate with local convenience stores and have doubts about how to do it, contact us, and take the first step towards growth!
