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Swedish Retail Loyalty – Do you know your shoppers?

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23 Sep 2021

The Swedish loyalty landscape (part 1)

Bartek Gorzny, Sales Director Nordics

Swedish retail is evolving. Perceptions of in-store grocery and food shopping has changed, people want to be rewarded for their loyalty in new ways.

The penetration of loyalty cards in the Swedish market is extremely high – 91% of shoppers have at least one loyalty card. They like to be connected, belong to a community and share values with their favourite brands. However, the majority of shoppers believe loyalty schemes work the same way, offer the same rewards and benefits, and roughly the same value.

This stems from the fact that many loyalty schemes are based on benefits linked to the core business of the loyalty scheme operator. Many offer transactional benefits rather than incentives that resonate with shoppers on an emotional level.

A lack of substantial differences between these loyalty schemes means that shoppers have little incentive to change their shopping behaviour. It also limits the acquisition of new members and results in a phenomenon I call “polygamic loyalty”, meaning that most shoppers possess at least 2 cards (i.e. ICA and COOP, or COOP and Lidl etc.) and don’t buy based on rewards but on the famous 4 P’s (Place, Product, Price, Promotion).

We’re convinced there is an outstanding opportunity within the Swedish retail market to break this cycle and offer something new and exciting to shoppers.

For example, over 60% of shoppers we surveyed would like to participate in a loyalty marketing campaign that offers household products as rewards they could redeem for free. Nearly 30% of shoppers would like to see campaigns featuring exciting rewards for kids, such as plush toys, trading cards, or stickers.

Loyalty marketing campaigns based on an instant-win, redemption or gamification mechanism are definitely a very powerful tool every retailer in Sweden should consider. They can help to increase market share, strengthen relationships with shoppers and boost sales on top of rewarding shopper’s loyalty in a meaningful and emotional way.

For grocery retailers, maintaining strong sales post-COVID will require determination, a brave strategy and - sometimes - out of the box thinking. Therefore, in my opinion, retail CMOs should be considering campaigns like this when planning a winning strategy for 2022 and onwards.

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