Retailers have long held the belief that the 'Customer is King' and have strived to build a loyal customer base, but what exactly is loyalty? Is loyalty even important and what actions can retailers take to improve the loyalty of their customers?.

These questions were at the heart of the rationale for taking a fresh look at the topic of loyalty and this report provides the key findings from the research.

One top-level finding from the research was that 80% of shoppers believe they are loyal to their primary grocery store. In addition, almost 3 out of every 5 shoppers (58%) would prefer to shop at one store if they could have all of their needs satisfied by that single store.

But, in reality, only 19% of shoppers shop at only one store and only 7% of shoppers spend more than 90% of their budget at their primary grocery store. The implication of these insights is that shoppers believe they are loyal and have a desire to be loyal but they do not behave in a loyal way because they do not have all of their needs satisfied by their primary grocery store.

This goes to the heart of the topic of loyalty: loyalty is not a card or a program or an initiative; loyalty has to be earned by consistently satisfying the needs of shoppers better than the competition. This requires food retailers to understand the needs of shoppers and then to consistently take actions to satisfy those needs across multiple aspects of their business.

If they do this, retailers will be rewarded by shoppers who will consistently allocate an increasing amount of their food budget and shopping time to the retailer, which is the practical manifestation of shopper loyalty.

The research found that retailers can earn or lose the loyalty of shoppers across all elements of their offering. The core merchandising areas (good prices, quality products, good promotions) and core shopper experience elements (clean stores, good customer service, short checkout lines) are important (i.e., must-haves) to all shoppers.

Elements such as personalized offers, ecommerce and digital engagement are more important to Millennials. Retailers need to take care of the core elements while laying the foundation for the elements that will be increasingly important for the largest portion of their future shopper base.

Retailers can also earn or lose the loyalty of shoppers across all departments in the store. Fresh food and center store food departments are most important to all shoppers; non-food center store departments are less important and are also more likely to be purchased via ecommerce. Prepared meals, meal kits and in-store dining are more important to Millennial shoppers.

This report forms Part 1 of our Loyalty report series in which we review the key findings from the primary and secondary market research on the state of loyalty in U.S. food retailing.

In Part 2 we look at what retailers can do to earn the loyalty of shoppers. After all, the best competitive advantage a food retailer can have is a large and loyal customer base.

Read the full report here.