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09/13/2021

It’s Time to Hit Refresh on the Grocery Experience

Patrick Spear of GMDC|Retail Tomorrow talks how store brands fit the subscription model and Albertsons latest FreshPass innovation.

In the past, retailers controlled how the customer shopped, however, in this brave new retail world — the script has flipped. The customer is now in the driver’s seat, and they aren’t exactly sharing their roadmap. In today’s “omni-choice” era of endless purchasing journeys to choose from, today’s customer has challenged the retailer to innovate and adapt to the fast-changing shopper expectations and demands.

A new study from CouponFollow shows that during the pandemic, many US consumers opted for subscription-based products, citing “dopamine delivery,” incentives, deals and perceived value as reasons behind the strong interest in subscription-based services.

With the spike in omnichannel preferences, many retailers are taking note. In fact, the Subscription Trade Association (SUBTA) projects by 2023, as many as 75% of direct-to-consumer brands will have a subscription-based offering.

Subscription and omnichannel popularity are on the rise, and it’s traversing across industries within the retail category, most recently in the grocery arena.

Securing Loyalty through Subscriptions and Store Brands
Subscription programs have demonstrated an increased propensity for shoppers to frequent stores and boost loyalty. Fortunately, subscriptions and store brands are a natural fit — like a hand in a glove.

In the case of Albertsons and its newly minted FreshPass, the grocer has become the largest traditional grocery retailer in the U.S. to launch a subscription service for unlimited free delivery as "part of an omnichannel 'reintroduction' to shoppers.” This launch is the latest development in Albertsons’ larger vision to deliver a personalized experience and secure loyalty among its customers. This summer, Albertsons’ loyalty programs have increased 17.5% year over year and encompass nearly 40% of transactions and 50% of sales.

In the world of retail, connection is key. To further establish a personal connection with their customers, Albertsons is offering 5% off purchases of the company’s Own Brands O Organics and Open Nature Products for all FreshPass subscribers. Through their subscription platform and store brand discounts, Albertsons is enabling increased trust, increased household penetration of store brands and a rational way to expand store brand offerings.

Store brands offer a unique opportunity to build loyalty, whether through the in-store or subscription relationship, and ought to be considered among retailers looking to build (and sustain) stronger connections with their customers, especially in the grocery industry, where competition is becoming fiercer than ever.

Getting Competitive for the Omni-Choice Shopper
The omni-choice shopper has arrived, and this new customer profile further demonstrates how retailers must differentiate themselves from their competitors.

Subscription services appeal to the omni-choice shopper based on the personalization elements they provide. From the comfort of their own living room, consumers are able to find a subscription service that fits their needs and lifestyles and provides them with products they know and love.

Unlike its grocer competitors, Albertsons has leveraged what they’ve learned from the omni-choice shopper and has been moving fast and aggressively to inspire its customers on the omni-choice journey. Through partnerships and external initiatives like FreshPass, Albertsons is sending a strong statement to the industry that they will innovate fearlessly to provide an optimal customer shopping experience.

Reimagining the Traditional Approach
According to Accenture, 91% of consumers are more likely to shop with brands that provide offers and recommendations that are relevant to them. A subscription service like FreshPass is bound to deliver upon this expectation, as the intersection of private label, personalized messages and curated assortment options prove to a customer that their brands recognize and deliver upon their preferences and needs.

For companies seeking innovation and relevancy in this changing industry, a new way of thinking is required. Through active and successful recruiting, stores like Albertsons are bringing in new leaders with strong experience outside of grocery retail to reimagine traditional approaches, hit refresh on the customer journey, lock in loyalty and keep customers coming back for more.

a man wearing a suit and tie smiling at the camera

Patrick Spear is the president and CEO of GMDC|Retail Tomorrow. Spear joined GMDC|Retail Tomorrow in 2014 after nearly two decades of involvement with the association as a supplier member during his tenure with multiple CPG manufacturers including BIC, Newell Rubbermaid, Mapa Spontex, Identity Group, and Mammoth Office Products.

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