One might expect that, by December, the vast majority of consumers who were going to adopt digital grocery shopping tools to mitigate their COVID-19 contagion concerns would have already done so. Grocery giant Albertsons Companies, however, was able to continue growing digital sales through the quarter ending Feb. 27, 2021 — the company saw digital sales soar 282 percent compared to the 2020 quarter, growth higher than the company’s already sky-high 258 percent digital sales growth for the whole year, per a company news release Monday (April 26).
Additionally, Albertsons Companies President and CEO Vivek Sankaran told analysts on a call that membership in the company’s Just for U loyalty rewards program increased over 20 percent year over year each quarter and that the program has a 93 percent retention rate with its 25.4 million members who “spend 2.6 times more than non-registered customers.”
To drive spending from identifiable customers who regularly shop at Albertsons Companies’ stores but do not use the current loyalty program, Sankaran said, “our loyalty team is now expanding the way they’re thinking about [loyalty].” He added that not all shoppers are most motivated by financial deals such as the program’s existing “rewards on fuel or pricing.” He explained, “Some people care about convenience, some people care about experiences, and that’s what we’re going toward.”
The program also gives the company key insight into its customers. Sankaran explained that customers’ interactions with the program give Albertsons Companies information about “which categories they’re purchasing with us for the first time, how often they’re coming back to repurchase, how they’re progressing up the loyalty ladder, and their incremental spend levels as they migrate from in-store to omni channel engagement.” As customers try out new categories, Sankaran said, “We’re able to quickly reward these new category buyers with personalized deals to retain that category spending our storage.”
To meet consumers’ growing desire for digital-first options, including improving delivery and pickup options for digital orders, launching virtual events exclusive to loyalty program members, pilot testing autonomous deliveries, trying out “a number of walk-up-and-go options including walk up counters, pick up lockers, and standalone kiosks,” and testing an “integrated loyalty and e-commerce app” that joins both capabilities into “a single interface.”
“We ended fiscal 2020 with three times the number of omni-channel households compared to fiscal year end 2019,” said Sankaran. “These also spend more with us and are more profitable. We also saw that, as customers moved into omni channel, they also increase their spend in our stores with a net growth of 20 percent per household, and the total spend rate two times that of an exclusively in-store shopper.”
Overall, the company, which owns more than 20 supermarket chains including Albertsons, Safeway, Jewel Osco, Vons and Acme, saw revenues rise 2 percent year over year for the quarter to $15.8 billion and rise 12 percent for the full year to $69.7 billion. The company saw earnings of 60 cents per share for the quarter, and Sankaran reported “continued market share gains in both dollars and units.”
“We’ve learned a lot from the pandemic, both in terms of customer behavior and how to operate the business more efficiently,” said Sankaran. “We’re emerging from this crisis more digitally-focused, both in-store and online.”