Dive Brief:
- Albertsons is leaning into its mobile app and its recently simplified loyalty program to help drive digital sales and customer engagement, executives said on a Q4 2024 earnings call Tuesday.
- Loyalty membership grew 15% year over year during the fourth quarter to more than 45 million members, according to EVP and COO Susan Morris, who will assume the CEO role on May 1. The number of actively engaged members rose 12%.
- E-commerce accounts for 8% of Albertsons’ grocery revenue on average, rising to 10% in the best performing markets, according to Morris. She credited the app experience for 24% sales growth in the digital channel.
Dive Insight:
As Albertsons targets e-commerce growth, the Albertsons Deals & Delivery app, which also serves as its loyalty program portal, is a major part of the company’s plans.
“At over 8% of grocery revenue today, e-commerce penetration is still below our industry peers and is one of our biggest growth, customer acquisition and customer retention opportunities for 2025 and beyond,” Morris said during the call.
The Albertsons mobile app offers customers personalized deals, lets them earn loyalty points and gives access to its range of delivery options, according to Morris. It also uses in-store geolocation to deliver real time coupons and help customers find products in-store.
Loyalty, which rose 15% year over year for the second consecutive quarter, is helping Albertsons connect with customers despite inflationary pressure, according to Morris. The grocer expanded the breadth of its loyalty options with an emphasis on savings and value.
The grocer experienced a solid sales performance in the fourth quarter. Same-store sales rose 2.3% year over year, according to a company earnings report. Net sales and other revenue was $18.8 billion during the quarter.
However, Albertsons expects its CX investments to weigh on the company’s near-term results even as they set the company up for long-term growth.
“We will also continue to surgically invest in our customer value proposition and elevate the customer experience,” Sharon McCollam, president and CFO, said. “We expect these investments will continue to drive outside growth in our digital and pharmacy businesses, which will result in increased future customer lifetime value, but create short-term margin headwinds.”
