Albertsons Drives 34% Loyalty Growth with Customer-Centric Digital Strategies

Albertsons has boosted its loyalty members over the last three years with a 34.24% growth, leveraging its digital capabilities and innovative strategies by employing gamification and simplifying its loyalty app. Albertsons’ focus on its “Customer for Life” strategy has been a foundational pillar, keeping customer experience at its core. In the earnings call for the third quarter, CEO Vivek Sankaran stated that they will focus on four key priorities in 2025 after the failed Kroger-Alberstsons merger. He emphasized that their loyalty program, integrated into the Albertsons mobile app, is not only a key engagement tool but also the gateway to personalized marketing and a primary data source for their retail media arm, the Albertsons Retail Media Collective. The key priorities being 

• Driving growth and customer engagement.
• Enhancing the customer life proposition.
• Modernizing capabilities.
• Expanding loyalty programs.

Core Drivers of Loyalty Program Growth

Albertsons attributes its success to personalizing the shopper experience. A significant portion of its 15% loyalty growth, which brought membership to 44.3 million, can be attributed to its in-store geo-located mobile feature integrated into its app. This feature delivers real-time coupons, helps shoppers locate products, plan meals, and assists with shopping lists. Albertsons also simplified its loyalty program by relaunching it as “Albertsons for U™,” transitioning from the previous “Just for U” program. The revamped program makes it easier for customers to earn points and redeem rewards, including fuel, grocery discounts, and, for the first time it also allows customers to redeem points directly for dollars off their grocery bill. Albertsons attributes its success to personalizing the shopper experience. According to Grocery Doppio’s report on personalization, grocers that adopt targeted shopper segmentation can achieve a 6.2% increase in conversion rates. Albertsons’ focus on customer personalization is reflected in CEO Vivek Sankaran’s earnings call statement: “We’ve also improved our ability to define shopper audiences, run targeted media campaigns, enhance product offerings, and achieve parity in campaign measurement.

Research from Deloitte further highlights the value of personalized rewards, revealing that 73% of consumers prefer tailored loyalty program benefits. Loyalty program members also generate 12-18% more incremental revenue than non-members. Albertsons’ efforts to align with these industry findings have significantly contributed to its loyalty program’s success.

Why Grocers Focus on Loyalty Programs

Grocers are increasingly adopting loyalty programs as a strategic tool to enhance customer acquisition and retention. These programs serve as a direct channel to understand consumer behavior, preferences, and purchasing patterns, enabling grocers to provide a more personalized shopping experience. According to Deloitte, 73% of consumers value tailored loyalty rewards, yet only 45% of brands currently offer them. One of the top digital influencers for grocers is the use of digital coupons, with 82% of consumers engaging with them. Additionally, Grocery Doppio’s shopper study indicates that 43% of shoppers want notifications about deals that help them earn additional loyalty points. By integrating these features into loyalty programs, grocers can create a seamless and engaging experience for customers, further driving incremental sales and fostering loyalty.

Evolution of Albertsons Loyalty Card and Key Initiatives

Albertsons has implemented several initiatives to drive customer engagement and loyalty:

Program Evolution: In 2021, Albertsons replaced its “Just for U” program with “Albertsons for U™,” offering enhanced deals and integrating it with the subscription service FreshPass. In April 2024, the program was further refined with a unified points-based system, extended earning periods, and automatic cash-off features.

In-Store Digital Integration: To bridge the gap between physical and digital shopping, Albertsons launched a geo-located mobile feature in 2024. This tool provides real-time coupons, product locators, meal planners, and shopping list assistance, enhancing the in-store customer experience.

Digital Advertising Campaigns: Albertsons has promoted its e-commerce services through targeted videos on platforms like YouTube and Instagram, emphasizing features such as synchronized promotions across in-store and online channels, and the convenience of pickup services. These campaigns have been complemented by streaming audio and digital out-of-home services.

Advanced App Features: The app’s “ShopAssist” feature allows seamless communication with order pickers, ensuring personalized substitutions. Additionally, shoppers can create customized baskets based on frequently purchased products.

Retail Media Collective: Positioned as a data-driven retail media arm, this initiative uses insights from loyalty members to deliver personalized marketing experiences. Albertsons plans to scale this program over the next three years, aligning it with their “Customer for Life” strategy.

The Impact of Digital Sales on Loyalty

Albertsons’ digital sales have grown by 23% over the past year, driven by the integration of loyalty programs with advanced digital tools. The “Customer for Life” strategy ensures that loyalty memberships, digitally engaged customers, and omnichannel households continue to expand. According to the State of Digital Profitability report, loyalty program members who use mobile apps and loyalty cards represent the most valuable customer segments, contributing to higher incremental sales.

Conclusion

Albertsons’ focus on customer-centric digital innovation has not only driven a 30% increase in loyalty memberships but also enhanced its overall digital sales by 23% over the past year. Albertsons demonstrates how grocers can excel in building lasting customer relationships while boosting profitability. With its continued investments in digital transformation, Albertsons is well-positioned to remain a leader in the competitive grocery landscape.