What Makes Shoppers Loyal to a Grocery Retailer?

A team of business school researchers at Washington University in St. Louis found that shoppers weren't going to one store, or two stores, but rather a lot of stores in their choice of outlets. The vast majority—a whopping 83%—on average regularly visited between four and nine chain stores within a year's time to purchase groceries. Out of 1,321 households studied among this rich dataset, only 12 stayed loyal to just one store. More than half, at 51.1%, went to an average of five to seven different stores. Eighty-eight households, or six out of every 100, went to 10 or more.

The study, Polygamous Store Loyalties: An Empirical Investigation, was published last month in the Journal of Retailing. 

Surprisingly, in the study, researchers found the top 10 categories of products that change a store's attractiveness over its competitors, based on the available breadth of the brand assortment. These categories include: 

Probably not one category that any of us would have anticipated.

Using tracked data from a vendor utilizing a swipe card akin to a loyalty card, the researchers parsed more than $1 million worth of shopping transactions over 53 weeks involving 248 types of products sold at 14 retail chain stores in a large metropolitan market.

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"Store loyalty was pretty much a given in grocery retail," said senior author Seethu Seetharaman, director of the Center of Customer Analytics and Big Data and the W. Patrick McGinnis Professor of Marketing at Olin Business School. "When people do their shopping, it's the store close to where they live—location, location, location, like the real estate mantra.

"Then there is a group of choosy consumers who stop at many stores, shopping for bargains or certain brands or products," he said. "That made us do a deeper dive, and we found that people aren't as store-loyal as we thought. The majority of people are shopping at six grocery stores."

The dataset comprised chains that were either traditional supermarkets (Albertsons, Bashas', Food 4 Less, Food City, Fry's Food Store, IGA, Safeway, Trader Joe's and Wild Oats Market), supercenters (Kmart and Walmart) and warehouse clubs (Costco, Sam's Club and Smart & Final). 

According to the research, these are the top 10 categories of products that change a store's attractiveness over its competitors, based on the degree of price consistency (or lack of price variability) over time:

This makes retailers really stand up and take notice about what concerns consumers, and why they shop where they do.