Food Lion adds digital coupons to its online grocery services

Dive Brief:

Food Lion shoppers can now use digital coupons and redeem “Shop & Earn” MVP rewards program savings through its Food Lion to Go for grocery pickup and delivery services, according to a press release.
The app's checkout screen shows users which digitally clipped coupons have been applied to their orders as well as their total accumulated Shop & Earn rewards.
Customers can also order groceries from shop.foodlion.com or use Instacart to get deliveries or schedule pickup.

Dive Insight:

Folding its savings and rewards program into its e-commerce offerings could help Food Lion reach more consumers by providing the same pricing both in-store and online, particularly as the pandemic drives consumer interest in digital coupons.

According to Inmar Intelligence, enrollment in digital coupon programs programs jumped 93% since March 1 across the top 30% of supermarket chains in the U.S. Redemption rates in March also increased 56.5% year over year. The touchless nature of digital coupons also addresses some consumers’ concerns about being exposed to COVID-19 through paper items.

While the grocery industry has historically relied on paper coupons, many retailers and delivery services have quickly adapted over the last several months. Last month, Shipt began working with Quotient, a tech company providing digital marketing services, to provide customers with access to manufacturer’s coupons through the delivery service provider's website or app. As consumers shop with their selected retailer, Shipt shows them applicable coupons for items on each page. The offering was in direct response to consumers’ frustrations over not being able to use coupons when opting for online grocery pickup or delivery in lieu of in-store purchases.

Sprouts Farmers Market also recently indicated a marketing strategy shift away from print coupons towards digital advertisements tailored to its target consumer demographic.

Demand for online grocery service surged during March as a result of the pandemic. Instacart alone has seen a tenfold increase in its sales growth rate and as much as a twenty-fold increase in Washington state, California, Oregon and New York. Research published in May by consulting firm Brick Meets Click suggested that online grocery sales will increase 10-times faster than the rate of in-store sales during the next five years. By the end of 2022, it anticipates e-commerce sales to account for 8% of U.S. grocery sales, up from 5% at the end of 2019.