Exploring the intersection of sustainability, health, wellness and loyalty in the North American retail landscape
When considering how loyalty programs can influence customer behavior in a retail setting, we often focus on their ability to encourage repeat business or generate incremental sales, writes Sarah Jarvis, Communications and Propositions Director, Eagle Eye.
Rewarding existing customers with savings or status, attracting new members with the promise of value and perks, and incentivizing both cohorts to make additional or directed purchases – that’s what loyalty programs are built for, right?
What if they could be more than that? What if, instead of simply being mechanisms for customer retention and acquisition, they could signal that a retail brand aligns with its shoppers’ values and make it easier for them to make purchasing decisions they believe in and feel good about?
This is the opportunity presented to retailers today—particularly grocers—by incorporating sustainability and health & wellness initiatives into their loyalty offerings. These two increasingly important consumer priorities influence typical grocery shopping behaviors and purchasing patterns. By embedding them more deeply into the loyalty experience, grocery retailers can help customers make more sustainable and healthy choices while driving financial performance and brand affinity by aligning with shoppers’ mindsets and needs.
To support these conclusions and explore the dynamics between sustainability, health & wellness, and loyalty in the North American retail environment, Eagle Eye surveyed 1,096 US and Canadian adults. We asked about their opinions and preferences related to sustainability and health & wellness, specifically within the context of their grocery shopping habits, purchasing decisions, and loyalty behaviors (the complete survey findings are available here
The data showed a market eager to make more sustainable and healthier choices at the shelf – and primed, in most cases, to pay more for the opportunity. But it also revealed a relative lack of sustainability and health & wellness options included in retail loyalty programs’ earning and redemption structures. This represents an opportunity currently being overlooked but ready to be seized by those retailers who take proactive steps to integrate “green loyalty” into their customer engagement strategies.
Making More Sustainable Shopping Decisions
It’s certainly no surprise that sustainability is a priority for American and Canadian shoppers. For years, consumers have been actively seeking to reduce their carbon footprints and support environmentally friendly causes, including by choosing sustainable CPG brands, altering their consumption habits and menu planning and embracing sustainable in-store behaviors like using reusable bags. Several sustainability studies outline this trend, but few examine the relationship between sustainability and loyalty the way our survey does.
To gauge how important sustainability is in shopping behavior, our survey asked consumers: “How important are sustainability considerations to your typical grocery purchasing decisions?” Over half of respondents – 56% – said they were “extremely” or “very” important, and another 31% rated them as “somewhat” important.
Younger shoppers, including 74% of Gen Z and 60% of Millennials, are more likely to say sustainability considerations are extremely or very important, which aligns with conventional wisdom. However, 70% of families with children responded this way, compared to just 50% of households without children, indicating that sustainability is also a significant motivator for this critical segment.
Because brand and product availability can influence grocery purchasing decisions as much as consumer priorities or values, this data suggests that retailers should make their selection of sustainable products more visible and available both in stores and online to tap this demand effectively. This includes making sustainability incentives a part of their loyalty strategies.
Prioritizing Health & Wellness at the Grocery Store
If sustainability considerations are far from a new phenomenon in consumers’ purchasing decisions, health & wellness might be the original influencing factor for grocery shopping behavior, dating back to the first nutritional label or claim. What has changed since then is the proliferation of health & wellness attributes consumers must navigate—from organic to vegan to non-GMO to gluten-free and beyond. Yet the expansion of healthy choices has not diminished American and Canadian consumers’ appetites for these options.
According to our survey, 51% of consumers say health & wellness considerations are extremely or very important to their grocery purchasing decisions, including 60% of families with children. Selected NIQ data confirms this broader trend; for example, 30% of consumers now seek low sugar claims—a healthier option—when buying food and beverage products, up from 27% in 2023.
Like sustainability, this persistent and increasing tendency toward health & wellness options indicates an opportunity for retailers to not only stock items with these attributes, which they are already doing in large part but also link healthier choices to existing marketing and engagement efforts, including the loyalty program.
Consumer Spending and Retail Choices… Follow Their Values
Beyond meeting consumers’ stated expectations, why should retailers adjust their marketing and loyalty strategies to accommodate health & wellness and sustainability trends? Put simply, it will pay off in terms of average basket size, per-visit spend and visit frequency.
The data show consumers are willing to pay more for sustainable and healthy items than the alternatives. For example, 62% of consumers say they are willing to pay more for sustainable goods, including 71% of Millennials and 78% of Gen Zers. Likewise, nearly two-thirds of respondents to our survey – 65% – said they would pay extra for an item with more health & wellness attributes (i.e., organic, natural, low-fat, low-salt, low-sugar, etc.) than a comparable item without those same claims. Consumers’ willingness to pay a premium for greener and healthier products will increase average basket values for retailers that make these items available and visible.
Sustainability and health & wellness considerations not only influence at-the-shelf purchasing decisions, they also help determine where a consumer will shop and how they feel about the retail brands they frequent. Almost half (48%) of consumers consider it extremely or very important to shop with a retail brand that aligns with their values on sustainability, environmental awareness, responsibly sourced products and carbon impact. Sixty-six percent of consumers say they feel more favorably about retail brands that offer health & wellness incentives or rewards.
These affinity factors can make a difference between a consumer shopping with one retail brand over another, contributing to increased visit frequency for those brands that embrace sustainability and health & wellness initiatives.
The Benefits of Loyalty-Integrated Sustainability
Perhaps the best way for retail brands to demonstrate their embrace of these consumer priorities is to embrace “green loyalty.” And it is precisely in the context of the loyalty program that retailers have the most work to do. Almost half – 46% – of grocery loyalty programs don’t offer any sustainability-related rewards, according to the consumers that belong to those programs. A majority of consumers (51%) say their loyalty programs fail to provide any health & wellness incentives either. These disconnects highlight a significant gap between consumer expectations and what retailers are delivering.
Even if consumers don’t currently have access to sustainability initiatives through their loyalty programs, they believe these incentives would influence their buying decisions. A significant majority (71%) of consumers would choose a more sustainable product over their usual purchase if their loyalty program offered some mechanism like a points “bonus” or multiplier. If given an incentive, nearly 30% would “always” or “usually” choose a more sustainable product over a cheaper alternative. However, 37% stressed that any inducement must be valuable enough to motivate them, reaffirming shoppers’ focus on value as a driver in almost every purchasing decision. The takeaway from these findings is clear: grocery retailers can effectively drive incremental revenue by offering loyalty-integrated sustainability incentives that encourage shoppers to purchase higher-value sustainable products.
Health & Wellness and Loyalty are a natural pairing
This strategy can be equally effective in helping consumers make healthier decisions. Like sustainability, loyalty-integrated health & wellness incentives can influence long-term behavior, impacting consumers’ future purchasing habits and immediate purchase decisions. However, the value of the offer must be clear and obvious; simply being the healthier choice cannot be the sole driving incentivizing factor.
A slightly smaller majority of consumers (64%) say a points “bonus” or multiplier would drive healthier purchasing decisions. Among those consumers who say health & wellness considerations are extremely or very important to their shopping habits – wellness enthusiasts – 82% are willing to pay more for a healthier product, compared to the 65% survey average. Another 25% of consumers said they would switch products if they were convinced of the health & wellness attributes of the product, which places a “burden of proof” on the brand and retailer. Nonetheless, that indicates a strong willingness to select healthy alternatives.
Gamified health initiatives are another way health & wellness are a natural fit with retail loyalty programs. While participation is generally low (only 22% of consumers reported participating in any health or wellness games), this only reinforces the opportunity for retailers. Retailers that offer gamified health & wellness options through their loyalty programs – perhaps like Loblaw’s PC Health program, which allows members to earn PC Optimum points for building healthy habits, completing customized programs and participating in special offers – create an additional avenue for engagement and program interaction.
Strategies for activating green loyalty
Consumers are clearly demanding sustainability and healthier grocery options, and meeting this demand can significantly impact a retailer’s performance. To take advantage of these trends, grocery retailers need the right technology and support to embed sustainability and health & wellness rewards into their loyalty programs, prioritize incentives for sustainable and healthy purchases, and make gamified health initiatives possible. To maximize the efficacy of these tactics, retailers should also pursue advanced personalization so that every customer can be targeted with unique sustainability or health & wellness offered tailored to their individual preferences and purchase history. A technology platform that leverages AI, connected data and loyalty-integrated offers can help them activate these strategies.
Retailers that leverage technology to capitalize on the intersection of sustainability, health & wellness and loyalty will boost engagement, brand affinity and incremental revenue—results that put the “green” in “green loyalty.”
To discover how these findings can inform your loyalty strategy, download the Green Loyalty study:
About Sarah Jarvis: Retail Marketing & Loyalty Expert and Author
With over 15 years of experience as a retail marketing leader in the loyalty industry, Sarah has worked with some of the world’s largest retailers and FMCG brands to help them drive profitable growth by prioritizing the customer in their decision-making processes. Her expertise spans loyalty program design, CRM, personalization, data analytics and commercialization, and the technical implementation of initiatives that bring retailers and brands closer to their customers – including emerging AI applications. In addition to co-authoring the 2nd edition of Omnichannel Retail: How to Build Winning Stores in a Digital World, Sarah is a Forbes Communications Council member and the Communications and Propositions Director for Eagle Eye, the SaaS technology company enabling retail, travel and hospitality brands to earn the loyalty of their end customers by powering their real-time, omnichannel and personalized consumer marketing activities.
Connect with Sarah on LinkedIn: https://www.linkedin.com/in/sarahelizabethjarvis/
Learn more about Eagle Eye here: www.eagleeye.com
Or get in touch with us here: https://eagleeye.com/contact-us
To discover how these findings can inform your loyalty strategy, download the Green Loyalty study: