Digital Transformation and Loyalty Programs in the Grocery Retail Sector: From a Conceptual Model to an Implementation Framework

Catarina Vieira, ISCTE, Instituto Universitário de Lisboa
Henrique O´Neill, ISCTE, Instituto Universitário de Lisboa, ISTAR-IUL


Digital Transformation, increased competition and globalization are trends that affect firms in the grocery retail business sector. The high costs of acquiring new clients lead companies to implement customers’ loyalty programs, aiming to retain and increase market share. Nevertheless, there is limited information about how retail companies are adopting Digital Transformation to retain clients. The research project described in this paper aims to understand how the grocery retail companies may successfully implement a loyalty program in a digitalization scenario. Therefore, a framework is proposed, regarding the implementation process of an effective loyalty program, in a Digital Transformation context in the retail sector. The methodology used is the Design Science Research. A case study in “company X” and interviews with grocery retail industry representatives from other international companies operating in Portugal were used to validate the framework. From this research, it is possible to confirm the positive impact that Digital Transformation has on the implementation of loyalty programs. The framework contributes to implement programs that enable companies to improve services and offer a better value proposition, leading to the customers’ loyalty.