Dive Brief:

• Albertsons has launched a fee-based subscription service that provides unlimited free delivery on orders over $30 and replaced its "Just for U" loyalty program with a revamped offering that incorporates a new range of deals and rewards for shoppers, the grocer announced on Monday.
• The retailer has also rolled out a new mobile app that combines access to both the new subscription service and the revamped loyalty program. Shoppers can use the app to pay for purchases, manage coupons and build shopping lists.
• Albertsons is continuing its investments in reaching shoppers online after seeing omnichannel spending increase during its latest quarter even as it brought in less from customers who made purchases only in its brick-and-mortar stores. ​

Dive Insight:

The latest moves by Albertsons underscore the importance the supermarket chain is placing on its e-commerce operations as it looks to maintain momentum even as the pandemic-driven sales wave the grocery industry rode last year fades.

The company's new subscription program, known as "FreshPass," is designed to encourage people to buy groceries online by replacing per-order delivery charges with a fee of $99 per year or $12.99 per month. The program also offers free access to Albertsons' Drive Up & Go pickup service and two-hour delivery service in certain areas. In addition, subscribers receive 5% off products carrying the retailer's O Organics and Open Nature private labels, and people who pay annually will get a $5 credit that can be applied to in-store or online purchases each month until the end of 2021.

Albertsons' approach to branding its loyalty program could help reinforce the company's banners with the company's customers. While the retailer previously used the same name for its loyalty program across all its banners, the revamped program carries the name of the Albertsons banner each customer shops at most often. For example, people who frequent Safeway stores will become members of "Safeway for U," while Jewel-Osco shoppers will join "Jewel-Osco for U." 

To encourage people to join the free program, through which shoppers accumulate points redeemable for groceries and gas, Albertsons is giving new members $5 off a purchase of at least $25.

Albertsons' e-commerce and loyalty programs have proven especially important to the company's financial performance. Customers who buy online as well as in stores spend significantly more with the retailer than those people who only make in-store purchases, Albertsons President and CEO Vivek Sankaran said during the company's first-quarter earnings call in July. 

Membership in the company's loyalty program rose 18% in Q1 compared with the same period in 2020, to 26.7 million, Sankaran added, noting that "actively engaged" shoppers spend four times as much as those who do not fall into that category.

"Our strategy of building lasting relationships with customers through a combination of digital and in-store engagement is driving our top line," Sankaran said.