Grocery Loyalty Actually Lost Members From 2010 To 2012

What happens to CRM when loyalty programs hit a wall? Grocery chains may be about to find out. After years of steady growth, memberships in U.S. grocery chain loyalty programs fell by about 1 percent between 2010 and 2012, according to the 2013 Colloquy Loyalty Census. Yes, total membership really did shrink, from 173.7 million in 2010 to 172.4 million in 2012.

In practical terms, that's not exactly falling off a cliff. But loyalty programs have been growing at a rate that means memberships would double every decade. If your CRM plans were based on needing the processing power to handle all those extra members' data, it's time to adjust those plans.

That doesn't necessarily mean scaling back, though. Chances are good that you haven't been mining all the data you've been collecting, out of fear that you won't be able to deeply mine more than a fraction of CRM hoard. With a stable (or much more slowly growing) loyalty membership level, you'll have one less variable and an easier time calculating how deeply you can mine. You might actually be able to generate better, more actionable results because your data set size is more predictable.

What's not clear is why grocery loyalty memberships are flat. According to the study, gas station and convenience store loyalty programs actually lost 21 percent of their members, so it's possible that the recent trend for grocery loyalty to be linked to fuel rewards hasn't had the desired effect.

Or it could be that, as one loyalty guru we saw quoted said of grocery loyalty programs, "They're boring." Most grocery programs offer roughly the same rewards and the same fine print, which means there's nothing to grab the customer's attention.

The problem with that theory: The stagnant situation with grocery loyalty programs isn't unique, but while grocery programs are flat, most other loyalty program memberships are up an average of 27 percent. For some reason, even if those other programs are boring, members are still hanging around.

And what if grocery CRM levels stay flat—or actually begin to drop more dramatically? If grocery loyalty really has seen its day, it may be time for some slightly more Big Brother-ish in-store tracking. That won't give you the kind of long-term customer data that loyalty generated but, for example, using cellphone signals to follow customers through the aisles and compare where they went with what they bought at checkout could provide a new set of insights.

Or anyway, at least until customers (or management) decide that really is a little too creepy.