In a tough economy for the UK population, we’ve seen steady growth in food retail, with more of the population turning to scratch cooking to save costs as opposed to dine-in establishments or quick-service restaurants. While the first quarter of any year is typically a slower time for grocers, there are essential steps that can be taken to not only attract new patrons but convert those consumers into repeat customers.
Within this article, there are two key areas that are important for grocery retailers to place focus; the return customer rate concept, and the emerging and established technologies that all brands should be capitalising on. When combined, the two can provide a blueprint to creating a seamless shopping experience guided by quantitative insights and cutting-edge solutions, writes Monica Eaton, Founder and CEO, Chargebacks911.
What can retailers learn from return customer rates (RCR)?
To start, the return customer rate (RCR) is one area that is crucial for grocery retailers. It indicates the percentage of customers who continually choose one particular brand’s products or services over competitors. This loyalty translates into consistent revenue, reduced marketing costs, and a solid foundation for business growth.
Put simply, a grocery retailer needs to divide the number of return customers by the total number of customers in a given time frame. While RCR is easy to calculate and provides a good foundation for building on existing customer loyalty, there are other variables to consider that can provide added insights into shopping cycles, such as alternative payment methods, emerging technology, and shifts in consumer shopping trends.
A “good” RCR for any given grocer depends on multiple factors, such as a retailers’ store type, location and competition, but on average, grocery retailers should be aiming for anywhere between 60% and 80%.
A bad RCR rate could be determined by a series of variables. For example, high prices can deter customers from making repeat purchases. They may find more affordable options elsewhere and decide to buy from a competitor, as we’ve seen many brick-and-mortar storefronts fall second to online merchants. Additionally, unclear, incomplete, or misleading product information can frustrate customers. They may lose trust if they can’t get accurate details about your products.
Also, if a customer has an issue and feels they are not being listened to or having their issue addressed, then poor customer support can be a turn-off for buyers. For those purchasing groceries, particularly if they have complex dietary requirements, they must have clear, accurate and detailed descriptions of these products. Without this, it can lead to customer frustration and eroded trust. This extends to being able to find those products in the first place. Navigating a physical store or the brand’s app must be intuitive – if they can’t find what they want, they’ll become frustrated, and you run the risk of losing the customer to a competitor.
One of the most effective ways of determining the causations of both good and bad RCR is likely the most obvious: ask your loyal customers. Surveying repeat shoppers to find out what they appreciate and what they dislike can provide the roadmap needed to create effective customer retention campaigns.
Emerging technology in grocery retail
One preference among consumers expected to explode in 2025 is more personalised shopping experiences. For grocery traders, the shopping journey typically begins at home. A consumer will create their shopping list of the items they need, either a written version or a mental list, before heading to the store. And this is where modern technology can play a crucial role. Grocery retailers are embracing apps using generative artificial intelligence (AI) to store this information, identify patterns and suggest items tailored to individual needs, tastes and budgets.
At the grocery store itself, brands can implement technology that direct consumers to the appropriate aisles and sections for each item – introducing an immersive experience that mirrors the technology used by in-store staff for fulfilling online orders. Integrated apps like OurGroceries and Aisle411 allow for personalised and efficient shopping, with the latter even allowing users to locate products in stores by providing aisle information, essentially giving them the quickest and easiest route for finding all their desired items.
Furthermore, stores can turn operational data into customer-facing information. For example, grocers can use AI to anticipate seasonality and demand, refine orders from suppliers or evaluate stock information to offer targeted recommendations or discounts. This not only enhances the consumer experience but also helps stores reduce waste and boost profits.
As well as adopting new tech, developing loyalty programmes and rewards, incentivising referrals, building surveys and reviews into the sale cycle, and seasonal discounts during slow periods are great ways to reward and learn from loyal patrons.
A strategic approach
Overall, a strategic approach is required to build loyalty and significantly increase turning first-time buyers into repeat customers. This requires exceptional service, effective communication, and understanding your shoppers’ needs. Brands should promote the recurring benefits of their products or services because returning customers are likely to spend more, make referrals to others and provide feedback or reviews that can help these brands improve and grow by 25% to 95%, according to some studies.
By fostering a culture and practice of trust and dependability, ensuring you have the goods your customers desire, and making those products easy to locate and purchase, you’ll be best placed to provide new and returning customers with a personalised and seamless shopping experience. By examining and acting on customer feedback, enhancing the customer experience service strategy, and adopting technologies that can implement smart retargeting tactics, you can significantly increase your chances of turning first-time buyers into repeat customers.
The key to growth for grocery stores is not just making the sale but cultivating a relationship that encourages customers to return time and again.
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