Supermarkets today face challenges that are making it harder than ever to stay competitive and offer a consistent shopping experience for consumers.
From online shopping becoming more convenient, e-commerce sites such as Amazon, Alibaba and others are becoming stronger competitors, and new players are entering the market with their own unique value propositions. The pace at which these challenges are emerging is only growing, making staying on top of the latest trends an even more significant challenge.
One way supermarkets can deal with this challenge is by using the power of gamification. Gamification isn’t just about finding fun ways for people to interact with your brand or business; it is an excellent way for dying industries like brick-and-mortar retail to reinvigorate their brands and attract new customer demographics.
But before we delve into what gamification can do for your supermarket, let’s look at the challenges faced by the brick-and-mortar supermarket industry that make the need for gamification even more urgent: inflation.
Challenges faced by supermarkets
The rising level of inflation (8.2% in September) is increasing the cost of living. As a result, households must pay more to purchase the same groceries and necessities like utilities. This is happening while salaries are not increasing at the same rate as inflation.
For example, the cost of food has increased quite a bit, but there’s not enough money for people to buy that much food. As a result, many customers opt to reuse single-use items, buy local or lower-quality products and use alternative payment methods like Buy Now, Pay Later (BNPL) when possible.
This gives supermarkets a big problem because they are not getting the foot traffic they need to make. To combat this, supermarkets need to sell more online, which is where gamification comes in. They can use gamification to encourage buying and selling on the website, increasing the number of people visiting their website and buying things.
The growing demand for convenience and speed
The demand for convenience is growing in the US and across the world. Consumers are moving away from traditional shopping and are shopping more online. In the third quarter of 2022, e-commerce retail purchases in the United States accounted for 14.5% of total retail purchases made in the quarter. This amounted to around 258 billion US dollars.
There are many reasons for this. First, it can be challenging to go out and shop when you have a busy schedule. Online shopping allows you to shop anytime, anywhere, and you don’t have to worry about crowds and long lines. It also saves you time and money. Online shopping also allows you to customize your products and earn rewards on each purchase.
Changing consumer habits
Consumers are changing their shopping habits constantly. This is because people are finding new ways to shop and looking for more than just a product. They want a product made with environmentally friendly materials that can be customized in some way.
Due to changing consumer preferences and habits, consumer products must be environmentally sustainable, with no child labor and no slave labor. These are just some of the few ways consumer preferences are changing that retail stores, specifically supermarkets, struggle to keep up with.
E-commerce giants are taking all the customers.
E-commerce platforms like amazon are taking all the customers and leaving the brick-and-mortar stores out in the cold. This leaves many people wondering what they can do to compete with these e-commerce platforms.
E-commerce giants like Amazon leverage their big brand names and convenience to bully smaller supermarkets and brick-and-mortar retail stores out of the market. With innovations like Amazon’s same-day delivery and rewards systems, brick-and-mortar stores simply can’t compete.
However, it is still possible to compete with e-commerce platforms. With some innovation and gamification, brick-and-mortar supermarkets can command the same level of engagement as Amazon and Alibaba, perhaps even more.
The growing cost of inventory is eroding already slim profit margins.
With inflation rising and supply chains still recovering from the Covid-19 pandemic, many supermarkets and other retailers are experiencing an increase in the cost of their inventory. If you also factor in the fact that inflation is also reducing consumers’ purchasing power, retailers are paying more for their inventory and keeping it in their stores for longer, thus reducing their inventory turnover ratio.
The combination of such problems is hurting supermarkets since they are getting fewer customers through the door. All of this is wiping away profit margins that were already slim, to begin with. This means that companies must find ways to reduce the amount of inventory they carry or find a way to move the inventory faster.
One of the tried and tested ways to move retail inventory faster is to use gamification to make the consumer’s purchasing journey smoother and more engaging. A smooth and fun purchasing and checkout process will make consumers return and make your brand stand out from the rest of the competition.
The solution is gamification.
As you can see from the challenges above, gamification can resolve most, if not all, of the issues that supermarkets and retail stores face. This also includes the problems arising as a result of inflation.
It is easy to say that supermarkets and retailers are losing customers because of e-commerce stores, inflation, changing consumer habits, etc. However, it is not easy to accept that many supermarkets and retailers are losing consumers because they don’t engage their customers enough to keep them. If a consumer doesn’t have a high level of engagement with your supermarket brand, they are less likely to be loyal when faced with the convenience of a big e-commerce platform like Amazon.
However, suppose a consumer enjoys coming to your store and is fully engaged beyond just the bare minimum of picking out what they want and paying for it. In that case, these customers will have an emotional attachment to your brand that will be more resistant to the convenience of e-commerce platforms.
Gamification engages your customers by appealing to the core drives of human motivation, as laid out in the Octalysis Framework. For example, with gamification, customers could feel like buying from your supermarket makes them a part of a meaningful community (Core Drive 5), gives them a sense of meaning (Core Drive 1) and accomplishment (Core Drive 2) as well as ownership (Core Drive 4) over their retail experience.
With over 2,000 PhD-level citations, the Octalysis Framework is the best way for supermarket chains and retail stores to incorporate gamification into their business operations. With the Octalysis Framework, you can eliminate the trial and error method and use behavioral science to identify the Core Drives you can leverage to get your specific customer demographics more engaged with your brand.
Let’s look at some examples of gamification in the supermarket industry and evaluate the impact these gamification campaigns had on each brand’s customer engagement.
Examples of gamification in the supermarket and retail industry
Starbucks Rewards is one of the most successful gamification campaigns ever carried out by a retail restaurant brand. What started as a simple card that customers used to accumulate points with purchases has evolved into a fully functional app that awards customers stars for every purchase that can be redeemed for discounts in the store, which drives up customer loyalty and engagement.
This program has been so successful that it accounts for about 40 to 50% of all of Starbucks’ revenues. This is because it motivates customers by giving them a sense of accomplishment (Core Drive 2) with every purchase and induces a bit of unpredictability (Core Drive 7) with every purchase.
Sephora’s ‘Swipe it. Shop it.’
Beauty products brand Sephora enhanced their customers’ experience by introducing a new marketing and sales campaign called ‘Swipe it. Shop it.’ This campaign makes it easy for customers to browse the brand’s extensive product list without feeling overwhelmed or intimidated.
Sephora used the popular Tinder gamification of swiping left or right to help customers quickly browse and select products by swiping left or right on them. This added unpredictability (Core Drive 7) to the purchasing process and allowed customers to browse hundreds of products without getting overwhelmed or turned off.
eBay’s auction feature
E-commerce giant eBay changed the e-commerce game with their gamified auctioning tool. This tool allows consumers to bid on products with other potential buyers, with the product going to the highest bid. This feature has done a lot for eBay’s consumer engagement and might be the main reason why it still exists today.
Unlike other e-commerce platforms where customers just purchase items, eBay gives customers a sense of accomplishment (Core Drive 2) and social influence (Core Drive 5) every time they bid for an item and win. Unlike mundane purchases on ordinary platforms, eBay makes consumers compete for the chance to purchase an item and gives them the feeling of victory every time they win. This keeps customers longer on the platform and guarantees they come back again and again.
How can they do better?
While these three examples mentioned above were all successful gamification campaigns, they could have been better with the Octalysis Framework. Most of the gamification in the examples above leverages Core Drives on the left side of the Octalysis quadrant (Accomplishment, Ownership and Scarcity).
With Octalysis, these campaigns could also leverage the elements on the right side of the quadrant, like Epic Meaning (Core Drive 1), Social Influence (Core Drive 5) and Creativity (Core Drive 3). These Core Drives create lasting impressions in consumers and give them a positive emotional attachment to your brand.
Brands that use gamification to leverage these Core Drives gain a lot of traction among consumers of all ages and gain fierce customer loyalty.
Would you like to use gamification to increase your supermarket’s customer engagement and retention? Please contact us today; we will help you fight the growing inflation and poaching from e-commerce platforms with gamification.