Marketing For A 8 Million Member Loyalty Program: Shoppers Drug Mart Email Marketing Case Study

How many loyalty cards do you have in your wallet? I have six of them, not counting credit cards that come with rewards. Email has made these cards even more useful to me—and even more powerful for companies who use email marketing to get the most from their loyalty programs. Shoppers Drug Mart, a Canadian retailer, does excellent work in the email marketing department. But before we dive into their email strategy, let’s take a step back to understand the company and its goals.

Who Is Shoppers Drug Mart?

Originally founded as a pharmacy, Shoppers Drug Mart has changed its offerings in recent years in the face of government restrictions on drug sales as well as increased competition, like Costco’s prescription-drug delivery service. As a result, the company has expanded into beauty, personal care and groceries. With more than 1,000 retail locations and 10 million loyalty program members, it’s no surprise that Shoppers Drug Mart was acquired for $12 billion (Canadian) in 2014 by Loblaw, a supermarket chain.

While the company has significant assets, 2017 has seen its share of bad news. In October 2017, Loblaw Companies Ltd. announced plans to cut about 500 jobs across its divisions. Amazon’s acquisition of Whole Foods Market also threatens Shoppers’ tentative steps into grocery, especially in prime urban markets like Toronto and Vancouver.

Amidst all these pressures, Shoppers retains a critical advantage: its Shoppers Optimum loyalty program and the associated email marketing asset.

In 2018, this program will be merged with Loblaw’s PC Plus program. Analysts point out that not all customers are members of both loyalty programs, so merging the two may draw customers of one chain to shop at the other one too.

Email marketing has been a strong point for Shoppers Drug Mart. Time will tell if that strength continues after the consolidation. But for now, you can borrow their successful email marketing strategies to get the most from your loyalty program.

1) Tailor Your Marketing Offers to Existing Customer Behavior

If you need a cup of caffeine to get your workday going, then you might have a favorite coffee place you visit every business day. But if you’re like many consumers, your buying patterns vary considerably from weekdays to weekends. After all, you have more spare time on weekends to run errands or get organized for a trip or event.

Snipp analyzed 2.5 million grocery receipts and found that Saturday accounted for the largest share (17%) of purchases. The number of weekend-oriented offers I’ve received from Shoppers suggests they are well aware of this consumer habit.

This email copy works because it employs a classic copywriting principle: Join the conversation already going on in your prospects’ mind. In this case, the prospects are thinking about weekend errands, and the emails slide right in with weekend shopping deals.

Lesson: Don’t work against yourself by trying to change your customers’ behavior. Observe your their existing habits and link your marketing to those patterns.

2) Personalize Your Offers With Habit Psychology

Once derided as “creepy,” personalized email marketing is here to stay. Once a marketing email sells you on a tempting subject line, will the offer insider resonate with your purchasing preferences?

This is where Shoppers does excellent work again. They’ve detected that I like to shop for humdrum necessities (e.g., toothpaste) as well as guilty pleasures like M&M’s. Take a look at the coupons they’ve sent me:

Our discussions about Big Data, data science and AI often revolve around a simple truth: Most consumers are creatures of habit. In fact, Science Daily reports that “about 40 percent of people’s daily activities are performed each day in almost the same situations.” If you’ve bought a certain brand of toothpaste every month for a year, you are probably planning to buy it again. Sending you a coupon for that toothpaste is called repurchase marketing. Companies that sell food or other consumable goods—in other words, products that we use up and replace on a regular basis—are in the perfect position to take advantage of repurchase marketing.

Lesson: Asking customers to buy the same product again works, especially if your company sells consumable products.

3) Market for the Holidays

Unlike a typical weekend, holidays stand out in our memories. You might have fond memories of enjoying pie on Thanksgiving (guilty!) or dressing up as a pirate for Halloween or stocking up on Christmas decorations.

For a retailer, there are two kinds of holidays to think about: official holidays when most businesses close (e.g., Christmas Day, Labor Day and special Canadian holidays like Canada Day and Victoria Day), and special days that are marked in other ways like (e.g., Halloween).

How does a retail store best known for prescription drugs and personal care products connect to Halloween? Let’s see how Shoppers Drug Mart does it:

 

Though the products featured in the offers aren’t strictly Halloween-related, the subject lines take advantage of the holiday theme. The “BOO!” in particular stood out to me because it was unusual for Shoppers. Then the email followed through on the subject line by delivering relevant offers for candy.

4) Drum Up Excitement With Deadlines and Scarcity

 

If you have been in marketing for a while, you know that scarcity and deadlines work. Think about those Black Friday sales that gather so much attention each year. Consumers know the sale will not last long so they get excited to go shopping.

 

Scarcity and deadlines are mainstays in Shoppers’ email marketing copy. Take a look at the following examples:

 

 

Notice the specifics in the example: “tomorrow” and “3 hours only.” If you are going to use deadlines, be as specific as you can.

 

Tip: If you haven’t read Influence: The Psychology of Persuasion by Robert B. Cialdini, it’s a must-read for serious marketers. Cialdini explains that scarcity works as a persuasive technique because we place a higher value on things that are less available. Cialdini explains how longstanding techniques like scarcity, reciprocity and consistency work.

 

I’ll be the first to confess that these scarcity-based offers work on me. Before getting an offer, I might have a vague notion to go shopping for a few essentials. Vague notions don’t do anything for the bottom line. The prospect of missing out on bonus points—i.e., free products in the future? That’s a different story entirely. While deals and deadlines do work, you can have too much of a good thing. If you have already used several deadline offers in the past few months, it is time to use a different technique.

Lesson: Use time-tested principles like scarcity and deadlines to drive sales.

5) Don’t Be Shy—Send a Lot of Email Offers

“Timid salesmen have skinny kids.” —Zig Ziglar

When you first launch an email marketing program, it’s easy to get lost in debates over how often to send offers. Is one per week the ideal amount? Should you follow Gary Vaynerchuk’s rule of thumb from Jab, Jab, Jab, Right Hook that direct offers should be outnumbered by value-added content? I admit that I like the “add value before selling” school of content marketing. However, that’s not the only path to marketing success.

Shoppers Drug Mart is not shy about sending direct offers. In the first 10 months of 2017, I received over 200 marketing emails from the company. If you think you must restrict yourself to a monthly or weekly email, think again.

Now, you might be skeptical of this approach. Is it smart to send that much email? Would that approach work in other fields?

Ben Settle, an email marketing specialist, has an excellent perspective on daily email. He advocates (and practices) daily email marketing. His main focus—selling subscriptions to the “Email Players” print newsletter—is about as far from Shoppers Drug Mart’s focus as you can be. However, his “infotainment” style means you look forward to his emails and keep reading them. Whether your business sells information products like Settle’s newsletters or consumer products like Shoppers, look for ways to increase the frequency of your email marketing.

Lesson: Look at your email marketing frequency over the past three months. How many offers have you sent to past customers?

How Could Shoppers Drug Mart Improve Its Email Marketing?

There are a few areas where Shoppers could further improve their email marketing and add value to the customer experience.

1) Experiment With Content Marketing

As I just mentioned in point #5 above, Shoppers’ email marketing is all business: offers, offers and more offers. While this approach is working reasonably well for them, there is a gap when it comes to content marketing.

For example, they could send out makeup tutorials and other grooming how-to’s featuring products they sell. The rise of YouTube beauty vloggers like Jaclyn Hill and Makeup Geek illustrates what you can achieve with makeup content.

Or Shoppers could publish more health content like tips to avoid sunburn in the summer. After all, pharmacy and health products are the company’s core offering.

2) Reduce Friction: Add an Option To Automatically Load Coupons

Did you notice the “load coupon” copy in the email screenshots above? As a customer, I find this to be an annoying intermediate step. Why not offer the option of “auto-loading” coupons instead of making customers click through to the website to load them?

I can see two reasons why they may not have implemented this. First, they want to collect “intention data” (i.e., which coupons people intended to use). Second, they may not have the technical capacity for automatic coupon loading. That said, removing friction from the loyalty program strikes me as an idea worth trying.

3) Follow Up After a Customer Uses an Offer or Coupon

Shoppers Drug Mart knows how to run a sale. Like Old Navy and Macy’s, Shoppers has conditioned their customers to expect a steady stream of promotions and coupons. But in the flood of offers I received last year, I can’t recall a follow-up email. How about copy like this:

Well done on earning 5,000 points last weekend! You now have enough points to redeem $100!

On that note…

4) Reward Loyalty Members With More Point Redemption Options

Picture this: You use a credit card and build up a huge points balance. You have vague travel plans and unused vacation days… Then you receive an email reminding you that you have enough points for a flight to Europe. I don’t know about you, but I would welcome that kind of marketing.

Shoppers Drug Mart could do more in the redemption department. They do periodically offer additional rewards for redeeming points on certain days, but with all the data they’ve collected on their customers, they can do better than “receive $100 in value”-style offers.

Speaking of data and personalization…

5) Rethink Blanket Offers

I’ll be blunt: I’m not interested in receiving offers about makeup and cosmetics. Yet Shoppers Drug Mart keeps sending them to me:

If you are operating a multi-million member loyalty program, think through such offers. Are you quietly irritating parts of your customer base by sending them totally irrelevant offers?

How Will You Use This Case Study?

Shoppers Drug Mart has built one of Canada’s most successful loyalty programs, and email marketing plays a key role in the program’s success. You may not have millions of members yet, but if you want to get there, take note of Shoppers’ successful tactics.

What email marketing practices do you like to see from your favorite retailers? Share an example in the comments below.

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