Loyalty programs may not be the primary reason to choose a grocer, but 42% of grocery shoppers said that a loyalty program with rewards they like would improve their loyalty to a merchant.
The Albertsons for U program, which is laser-focused on driving stickiness, leveraged this insight to build a 34 million member base that’s growing at 15% YoY in 2023.
Proof of its success? A CEO who talks about the financial success of the program in earning calls!
The Albertsons for U story is a masterclass in building a loyalty program quickly and at scale but mindfully, without overwhelming members. Here are 5 ways it builds everyday loyalty, ongoing engagement, and improved spending in the fiercely competitive grocery industry:
1. Multi-dimensional engagement: horizontal and vertical integration of the program ensures that members have multiple ways to engage and get benefits for various needs
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- Vertical integration refers to the range of verticals connected in the program where members can earn and redeem points and gain rewards: food and grocery, fuel, pharma, and even pet care.
- Horizontal integration refers to the different banners (Shaws for U, Randalls for U, Carrs for U, Safeway for U, etc.) all connected seamlessly to benefit cross-banner shoppers
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2. Content to drive everyday engagement: just like Boots Beauty Club, Albertson’s is innovating with content as a way to drive their key category, food.
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- For Albertsons, the meal planning feature creates closed-loop engagement and revenue by letting members integrate menu planning with shopping list creation and auto-replenishing essential products on their lists at a discount.
- For the member, this shows up as top-notch content created by Mealime that guides them through planning, shopping, cooking, and creating personalized nutrition plans, recipes, meal plans, and ingredient lists – all within a single mobile app or website.
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3. A balanced, win-win value proposition with a laser focus on revenue outcomes: the mix of points, rewards, conveniences, delights, perks, and paid benefits (via the FreshPass program) gives members an ongoing and continuous flow of interactions for everyday engagement, but each is also designed to drive sales, loyalty or both. For example:
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- Birthday rewards don’t cost much but create outsize emotional loyalty benefits
- Digital coupons and personalized deals help members save, but also drive sales
- Meal plans offer members convenience but also enable them to shop for ingredients
- Free monthly rewards drive engagement frequency and retention – but also drive sales via sampling and trial of new own-brand and partner products.
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4. Convenience and consolidation: In August 2021, Albertsons for U unified two separate loyalty and shopping apps into one clean, unified super app to handle everything from eCommerce, points earning, redemption, rewards tracking, partner benefits, and the paid Freshpass service.
Members can view and clip digital coupons, access personalized deals, redeem points for free gas and groceries, claim rewards, receive cash discounts, create in-store shopping lists, place online orders for delivery and DriveUp & Go™, manage their Albertsons Pharmacy prescriptions, access the meal Plan feature, find item locations in-store, and much more in one place.
This ensures simplicity, ease, convenience, and stickiness for members. It also makes it easier for Albertson’s to track and manage memberships and get the data insights they need in real-time.
5. Everyday partnerships, benefits, and rewards: Partnerships such as the one with Starbucks or Exxon Mobil for gas are mindfully curated to deliver everyday engagement and benefits to loyal customers. Equally important, benefits and rewards are available to all members, even though the value and personalization are based on the degree and frequency of engagement. Not having tiers keeps things simple, yet the personalization and dynamic reward structure push members to engage more frequently and spend more over time.
| Hear the full episode with Matthew Stevens, Albertson’s Director of Loyalty Programs and Strategy here
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