Markdowns Go Digital: Online Loyalty Shoppers are Hungry to Save

Offering markdowns to loyalty program members offers big rewards to grocers and shoppers alike.

Previously, loyalty apps have not been linked to real-time in-store data, meaning loyalty program members could not take advantage of discounts being offered in their store. E-commerce is perceived by shoppers to offer less savings opportunities, and with the growth of online shopping and consumers’ increased price sensitivity, this is an issue that grocers will need to address quickly.

Loyal customers become business builders over time. As the relationship develops, they will buy more, pay premium prices and refer new customers. According to Fundera Inc, loyalty program members spend between 12 to 18% more per year than general customers.

However, to realize the benefits of these valuable customers, the Harvard Business Review cautions that retailers must admit that “not all customers are equal. In order to maximize loyalty and profitability, a company must give its best value to its best customers.”

In this article, we’ll look at how giving loyalty customers the ability to order markdown items online from their home store for same-day curbside pick up could quickly become a coveted perk.


A Quick Word About Markdowns

Periscope fresh item management solution includes capabilities that track shrink and markdown sell-through rates and effectiveness. Because the UPC for unique weight items is maintained even after an item is marked for discount, grocers can reserve and track these specific items for sale through a separate loyalty channel.

While Periscope’s ultimate goal is to diminish markdowns by reducing overproduction and over-ordering, they are still a fact of life: warehouses get overstocked, product gets pushed to the store, or doesn’t sell through. What could be seen as a loss turns out to be increasingly valuable to the consumer.


Shoppers Are Looking for New Ways to Save

Analysts say that price sensitivity will come into play online and in-store over the summer months because of massive job losses and financial constraints faced by the public.

There has already been a noticeable change in shopping behavior as people look for savings opportunities to offset this stress. Digital coupon redemption in March jumped over 50% YOY and enrollment in digital coupon programs across the top third of national grocery chains has grown more than 90% YOY, Inmar Intelligence found in a recent study.


Replicating the In-Store Experience

The effects of shoppers diverting trips to online is already being felt. Shoppers are shifting their pantry-stocking trips online, so quick trips to the store to grab specific fresh items have fallen significantly, IRi found. In turn, this is impacting incremental purchases of bakery, seafood, and deli.

To combat emerging post COVID-19 challenges, Nielsen Intelligence Leader Scott McKenzie advised retailers to make “bigger investments into their digital platforms, into their digital relationships with the people coming into their brick-and-mortar stores today who perhaps have shifted their shopping habits to online. So that reincorporation of the retail experience and the re-imagination […] are just going to be extraordinarily critical.”

Offering e-commerce customers an equal opportunity to access savings and creating awareness of in-store loyalty programs is one example of how stores can mirror the retail experience on their digital platforms. FMI’s U.S. Grocery Shopper Trends 2019 study found that shoppers thought brick-and-mortar supermarkets performed better than online grocery retail on a list of key criteria, including “ability to save” and “availability of loyalty programs. In this new world, stores need to find every opportunity to connect with online shoppers the same way they would in-store.



That roast your store associate just marked down 50 percent? And that day-old bread? These markdowns are a fresh way to engage loyalty program members as they look for ways to save online, and an opportunity to maximize profitability long-term.

About Invafresh

With a combined 500+ years of Freshology experience, the heritage of Invafresh has enabled fresh food retailers to create extraordinary store operations performance and differentiated customer experiences. As the leader of Freshology, Invafresh is deployed in over 350 grocery retailers spanning a global reach of 35 countries with more than $100 million of Fresh revenue being transacted daily, to provide AI/ML demand forecasting, merchandising, replenishment, and sustainability and compliance solutions.  

Learn more at About Us | Invafresh.

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