When it comes to customer loyalty, I like to think of myself as a pretty desirable guy. The cars in the garage were all made by Ford, and their fuel comes from Chevron. My last four computers came from Lenovo. With one hiccup during the last downturn, I’ve been at Bank of America for 40 years. To use consultant Geoffrey Moore’s wonderful phrase, I am a “prisoner of United” (except when I occasionally skip out on Southwest).
It takes a lot to dislodge me from default shopping. There was a time when I wouldn’t even think of going to any other department store but Macy’s, but as I wrote several years ago, its diminishing commitment to customer service eventually persuaded me to shop elsewhere.
Up until recently, I held a similar commitment to Safeway, the second-largest supermarket operator in the U.S. after Kroger’s, with stores in 18 states and affiliations affiliated with other chains such as Randalls and Tom Thumb in Texas and Vons in southern California and southern Nevada.
We didn’t decide to make this change lightly, but Safeway had long ago started to do things that aggravated me greatly:
- What’s with all the cardboard display cases in the aisle? When there’s only room for two carts anyway, and there’s a display jutting out and a shopper stopped to consider nine million mustard options, it can cause a backup real fast.
- I was intrigued by the online shopping option, until I discovered two things: delivery required a four-hour window, when I could get to the market and back within 30 minutes; and Safeway didn’t even offer many of its own branded items online – which meant I was forced to get the more-expensive option. (Maybe that was intentional.)
- In addition to store loyalty, we have product loyalty. Safeway simply stopped selling some of the staples (like coffee and maple syrup) that we preferred (I now have French Market coffee shipped in from New Orleans.)
- I switched my prescriptions to the pharmacy when Walgreens was threatening to take advantage of tax inversion. But the pharmacy hours were so limited that it wasn’t even convenient to get medications – not to mention that, without my consent, they put them on automatic refill.
- Don’t even get me started on the way they treat employees. One friend of mine is a courtesy clerk who’s limited to 39 hours a week because one more hour would qualify her for benefits, while another friend was outright fired. His offense? There was a binder that had sat in lost and found for more than a month that contained credit card numbers, but no identification. He took it home to shred it, and Safeway accused him of removing “company property” (he worked through his union to get reinstated, but he still has a bad taste in his mouth).
- Have you ever tried to redeem one of their coupons? Invariably, there’s a disclaimer in miniscule type that requires registering on some Web site, buying extra merchandise, or restrictions that only allow purchases on odd-numbered Tuesdays between 3 and 4 a.m. (okay, the last part may be an exaggeration, but only slightly).
Here in Silicon Valley, shopping at Safeway is almost an imperative. There are four stores within two miles of our house, and eight within five miles. We have the requisite Whole Foods and Sprouts, but the closest reasonably priced competitor is Lucky. A Lucky store used to be around the corner from our house, but its employees were unusually surly. No surprise when that store closed.
Eventually, after multiple false starts during the downturn, we were fortunate (not “lucky”) enough to see a local chain move into that space, called Zanotto’s. Good meat, good fish, good produce, nice people. The result: we spent more than $1,000 fewer dollars at Safeway this year in favor of the new store.
So here’s what mystifies me. Supermarkets for years have had loyalty cards to track customer purchases. Advances in analytic capabilities in the last few years has made that information even easier to parse. On a macro level, too, its revenues are down considerably: from $44 billion in 2012 to $36 billion in 2013 (it looks like 2014’s revenues will be similar to 2013).
Safeway may not care that one customer is giving it 25% less business, but it should at least be able to figure it out. It has my e-mail address. Isn’t it the least bit curious why it’s losing loyal customers?