As grocers look to secure consumers’ loyalty in the face of steep competition, many are leveraging membership and subscription offerings to build deeper relationships with their customers.
Amazon, for one, is leveraging its Prime subscription to incentivize purchases from its grocery brands and conversely leveraging its grocery brands to drive Prime subscriptions. The company is offering Prime members 20% off of select items at Amazon Fresh stores beginning Wednesday (June 29).
“We’re excited to launch the new Prime member savings benefit at Amazon Fresh stores today, offering 20% off everyday essentials across aisles,” Jeff Helbling, vice president of Amazon Fresh, said in a statement in an emailed news release Tuesday (June 28). “Prime members get the best of shopping, savings and entertainment every day from Amazon, and we’re thrilled to add another benefit to their membership.”
Across the grocery industry, brands are leveraging subscription and membership models to boost frequency and build loyalty. Walmart, the world’s largest grocery retailer, has its Walmart+ membership, which offers, for a set monthly or yearly fee, lower fuel prices, free delivery, early access and other perks. PYMNTS research reveals that the grocery delivery component is a huge draw for the program, bringing in subscribers by the millions.
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Pure-play grocers are doing the same, though they do not have Amazon or Walmart’s ability to position themselves as consumers’ one-stop shop for the majority of their retail needs. Kroger, the United States’ largest player in the space, has its tiered Boost membership, which offers free next-day or two-hour delivery for an annual fee, and which provides double the fuel rewards, in addition to member-exclusive deals and discounts.
Earlier this month, Rodney McMullen, Kroger’s CEO and chairman, announced that, “encouraged by the number of new members in the four current pilot divisions,” the grocer is rolling out the offering nationwide “in the next few weeks.”
Related news: Grocery Shoppers Engage More With Brands That Offer Fuel Rewards
Albertsons Companies also offers an online grocery subscription, FreshPass, by which, for a monthly or annual fee, consumers receive free delivery, double rewards, select discounts and more. The company announced the program in the summer of 2021.
See also: Albertsons Takes On Walmart, Amazon With New eGrocery Subscription
According to PYMNTS’ April 2022 study, The Benefits Of Membership, which drew from a survey of more than 2,100 U.S. consumers, an estimated 166 million U.S. consumers are Amazon Prime members, well above the estimated 73 million Costco members, the 69 million Sam’s Club members, and the 38 million Walmart+ subscribers.
Read more: 166M US Consumers Are Amazon Prime Members
Research from the May edition of PYMNTS’ Subscription Commerce Conversion Index, created in collaboration with subscription eCommerce platform sticky.io, which draws from a census-balanced survey of more than 1,900 U.S. adults, revealed that 71% of consumers reported noticing that inflation had impacted their grocery costs. In this cost-conscious environment, 56% of consumers said they would be interested in a grocery subscription if product prices were lower.
Additional details: Inflation Prompts 10x Increase in Consumers Reevaluating Subscription Value
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