Dive Brief:
- Membership in Albertsons’ loyalty program, Albertsons for U, grew 15% year-over-year to 44.3 million, President and CFO Sharon McCollam said on a Q3 2024 earnings call Wednesday.
- The growth was partly driven by an April 2024 loyalty revamp that made it easier for customers to earn and redeem points, according to CEO Vivek Sankaran. The changes also resulted in more frequent engagement, higher retention and increased customer spend.
- The Albertsons mobile app launched geolocation features that let shoppers receive coupons, locate products and plan meals in-store. Sankaran expects more than 8 million customers to use the in-store features by the end of fiscal 2024.
Dive Insight:
Albertsons’ loyalty wins stand out as a highlight as the company grapples with its future following the collapse of its merger with Kroger.
The company is putting its digital capabilities at the center of its CX and marketing efforts, and Albertsons for U plays a key role in onboarding customers into its ecosystem.
“Our loyalty program is integrated into our mobile app and is a key engagement tool for our business,” Sankaran said during the call. “It is the entry point for digital and personalized marketing and a primary contributor of data to our retail media collective.”
The loyalty program is part of Albertsons’ “customers for life” strategy that emphasizes building relationships with customers no matter how or where they shop, according to Sankaran. He credited the strategy for success earlier in the fiscal year and said it helped put Albertsons in a “strong financial position” to implement its post-Kroger plans.
The grocer plans to improve the digital ordering experience through its integrated mobile app with improvements to quality, speed and convenience, according to Sankaran. Albertsons is also rolling out a store-based five-star certification program designed to ensure “a consistent and elevated level of customer service” alongside new marketing initiatives.
Continued investment in digital capabilities could help Albertsons continue to expand its e-commerce operations, which grew penetration to reach 7% of grocery revenue in the third quarter of 2024. The grocer said it plans to add more in-store capabilities to its mobile app to drive further engagement.
“While we have grown this business significantly and faster than the market, it is still underpenetrated compared to industry benchmarks and is one of our biggest growth customer acquisition and customer retention opportunities,” Sankaran said.
