Albertsons CMO: Simplifying Loyalty Value

American grocery shoppers love loyalty programs, with 55% using some form of points to save money. And with recent inflation and economic pressures, value is even more critical. Albertsons is debuting changes to For U, its loyalty program, which is also available at all its banners, including Safeway, Shaw’s, Vons and Jewel-Osco. Sean Barrett, chief marketing officer, tells Retail Insider what’s behind the changes.

Retail Insider: Loyalty matters more in grocery than other channels. How important is it in your CMO universe?

Sean Barrett: Loyalty couldn't be any higher. We have a strategy that we call “Customers for Life,” which is about making each relationship with each customer a lifelong relationship. Our loyalty program is one big way we do that. We want to make sure we're giving value to our most loyal shoppers. Also, our loyalty program has become an enabler for one-to-one communications so that we can build and strengthen that relationship over time.

Retail Insider: Why revamp the program now?

Barrett: We looked very critically at our program and found it still had some moments of friction. Customers loved it – it is one of our highest-rated attributes. But we knew there were some pain points. And some elements within the experience prevented all of our shoppers from engaging.

Retail Insider: Like what?

Barrett: First, none of the benefits are changing or going away – that was important. Then it came down to three changes based on our research and questions that come to our call centers. It had been sort of a two-currency program. We had points that would become rewards once you accumulated a hundred points. Now, we use a point-based system, reducing confusion and friction. Second, we're extending the time to earn and redeem the reward, doubling it from one month to two months. That’s important to people with smaller households and less frequent shoppers. And third, we’re offering an auto cash-off feature.

Retail Insider:
How does that work?

Barrett: Previously, we’d given gas rewards, with 10 cents off a gallon. For the last 10 years, we’ve also used grocery rewards that required people to go into the app, find their reward balance and clip different offers. But some people don't drive. And some people didn’t want to engage with that clipping. With this Auto Cash Off feature, customers just toggle a button in the app, automatically turning points into cash off at the register. That opens up delivering value to a broader group of shoppers who hadn't engaged for one reason or another.

Retail Insider: How do these 38 million members differ from your other customers?

Barrett: They are our most valuable. They shop more frequently. They spend more with us and stay longer. They are central to our business and the most important shoppers coming through our doors.

Retail Insider: I’m an unfaithful shopper. I live an equal distance between two different supermarkets, and the one I shop at is often determined by whatever route I drive that day. Are most shoppers like that?

Barrett: Yes, most do shop at multiple grocery stores in a given month. But we have a higher share of wallet with loyal shoppers than with those who shop irregularly.

Retail Insider: How important is the data you get from loyalty programs to Albertson’s retail media network?

Barrett: The connection between our loyalty program and our retail media network is strong. Just as Albertsons wants customers for life and the ability to communicate one-to-one, so do our CPG partners. They want to grow their relationships with our best shoppers, too.

Retail Insider: How are you marketing the new program?

Barrett: We’re reaching two different audiences. For customers currently engaging in our loyalty program, it's critical that we manage through this change and make sure that there's no confusion or frustration. We’ve been emailing them about the changes for about a month now. Second, we’re trying to reach people who have been in our stores but for some reason have said they're not interested in the program or who have tried it and lapsed. We have a full 360-degree marketing approach for them, including in-store and out-of-store. Members in our program save up to 20% off of their grocery bill weekly, and that’s been our key hook. It’s coming to life in stores with signage. We’ve also trained all frontline associates on the new benefits and features.

Retail Insider: Any TV?

Barrett: We don’t have any national TV buys. We’re focused on very targeted video advertising, including streaming and digital. It’s a more efficient investment, and we can reach all our customers in all our markets.

Retail Insider: How do you measure the success of changes like this? Besides new member sign-ups?

Barrett: Ultimately, we want more people to engage with us more often and spend more. We're trying to drive customer lifetime value, a combination of the amount people spend with us and their duration as a customer. By driving higher frequency, more breadth, depth, and size of basket, they’ll get greater value. And they’ll continue shopping with us for longer.

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