Hannaford Supermarkets has launched its My Hannaford Rewards loyalty program chain-wide. The measure gives participating shoppers a 2% reward on 5,200 store-brand products, including on fresh and center-store items.
Most two-tiered and club loyalty programs require shoppers to subscribe before they can receive price discounts. Hannaford's program keeps prices the same for all customers. The company, which held off on instituting a loyalty initiative for years in order to focus on its everyday low prices, calls its new initiative "a reinvention of grocery store loyalty programs," according to Winsight Grocery Business.
Hannaford piloted the program beginning in October with store associates at 11 locations near Burlington, Vermont. In addition to the store brand discounts, shoppers also will get personalized coupons for their favorite regional and national brands.
In an interview with Supermarket News last year, Hannaford CEO Mike Vail noted the company held off on instituting a loyalty program because it saw itself as a "no-games, no-gimmicks" retailer. But a few years ago, Hannaford noticed shoppers demanding more customized deals, including digital coupons and other offers, through social media. The Northeast chain, which didn't want to muddle its shelf pricing with a two-tiered system, decided to keep prices the same and institute a percentage reward for store-brand purchases.
This move should boost demand and awareness of Hannaford's private label lines, which range from everyday offerings to gourmet and all-natural items. That, in turn, could increase store loyalty, considering these brands can only be found at Hannaford stores.
The program also serves as a unique offering for Hannaford, which is going up against some tough competition. Walmart is expanding its private label selection, while regional powerhouse Market Basket draws hordes of customers with its low prices. According to Nielsen, private brands claimed 18.4% dollar share and 22.3% unit share in 2016. They are expected to account for one out of every four store purchases by 2027.
Retailers have been mixing it up with their loyalty program offerings lately, with some adding in fuel discounts and others giving generous breaks on grocery discounts. Giant Eagle revamped its rewards program last year by offering shoppers points toward fuel discounts, as well as up to 20% off grocery purchases. The old program only gave points for fuel perks.
Kroger’s best-in-class loyalty program and application of shopper analytics is often lauded as the industry standard and an envy of many retailers. Kroger offers a host of grocery-related perks to Plus Card members — e-coupons, Best Customer Bonuses and Free Friday Downloads, among others — when using the retailer’s mobile app.
While many grocery store rewards programs are popular, their use is dropping as the industry matures. About 3.8 billion such memberships existed in 2017, according to Colloquy Loyalty Census, but their growth slowed from 26% in 2015 to 15% last year. It has forced some retailers to increase the benefits they offer to shoppers to make their program stand out.
Some consumers avoid joining a grocery rewards program because they don't want to share their personal information, such as past shopping practices. Hannaford's approach of not requiring shoppers to enroll to get discounts, coupons and other program perks could appeal to these kinds of consumers and keep them from migrating to other retailers that increasingly use customer data and analytics to craft and deploy marketing and outreach strategies.