The research, carried out by SAS UK alongside the Cranfield School of Management, shows that consumers are highly engaged by direct mail with targeted and relevant offers generated though loyalty scheme insight.

It advised that supermarkets should update their communication strategies away from TV and newspaper advertising pushing low price offers and instead focus on online and direct engagement to tailor communications to customers.

While direct mail creates huge engagement through targeted offers, the report found that supermarkets are not applying the same principles to email. Email success rates are low compared with other sectors.

Consumers reached via email reported only a slightly positive effect, virtually in line with an untargeted broadcast, whereas those contacted via direct mail reported a clear positive effect.

The report added that supermarkets need to update campaigns to encompass increasingly online, mobile and social audiences. 

Product availability, especially for promotional items, is a major frustration for customers. While social media is making it easier for them to complain publically, it also gives supermarkets more insight into what is being said.

“Supermarkets have worked very hard to improve service levels, and radio and in-store communications are helping them forge excellent relationships with the customer,” said Charles Randall, solutions marketing manager at SAS UK.

“Their highly personalised approach to direct mail driven by big data analytics has set the standard which other retailers are trying desperately to match. The downside of that is that now customers expect high levels of service as standard – and are quick to complain if they don’t get it.”

He added, “To address this, supermarkets must get better at incorporating data from emerging channels such as online, mobile and social media into loyalty programmes to create a more personalised and relevant experience across all channels.

“There is also a clear opportunity for supermarkets to enhance their demand forecasting to maintain stock levels, even during promotions, to minimise customer dissatisfaction.”

Randall concluded that consumers already relate strongly to their supermarket on a personal level.

Add the intelligence delivered by an integrated analytics platform, he said, and supermarkets have the means to build on this success, strengthening and reinforcing these thriving relationships.”

Read more on: Consumer insights – direct mail and supermarket loyalty card holders