SEE ALL NEWS In the News
Financial Post: Loblaw debuts digital loyalty app as grocery retail war heats up
by Hollie Shaw
TORONTO • Retailer loyalty programs are aiming to reach people where they do a vast amount of price-comparing these days — on their smartphones.
Loblaw Cos. Ltd., country’s biggest grocer, debuted Monday its new PC Plus loyalty card in Ontario and plans to roll it out nationally by the end of the year to its Real Canadian Superstore, Zehrs, Provigo, Atlantic Superstore divisions.
“This will help boost same-store sales growth one customer at a time, one transaction at a time,” Uwe Stueckmann, senior vice-president of marketing at Loblaw, said of the highly personalized program, which sends individual deals to customers based on their buying habits.
“Our program is designed to make sure we drive more value and more share of wallet out of our best customers.”
Traditional loyalty programs offer the same incentive to every customer, but PC Plus will vary offers based on consumers’ behaviour; those who buy the same items all the time will get a reward for buying what they always have, and will get even more significant rewards if they stretch outside of their shopping comfort zones, Mr. Stueckmann said.
Customers can register by downloading the PC Plus smartphone app, which functions in the same manner as a loyalty card. Existing members of Loblaw’s PC Points plan, a loyalty program for its PC Financial credit and debit cardholders that began in 1998, can now earn more points if they register in PC Plus. Alternatively, customers without smartphones can pick up a free PC Plus card at one of Loblaw’s stores.
In addition to the shopping component, the app includes a meal planning function and a shopping list function based on sale items and purchase history. The digital shopping list can be shared with members of the same family.
Loblaw’s move comes as the grocery sector enters its fiercest state of competition to date with the arrival of Target and a vast expansion by Walmart.
At the same time, other retailers have been enhancing their existing loyalty programs, including Hudson’s Bay Co., Canadian Tire, which is pilot testing a digital version of Canadian Tire ‘money,’ and Shoppers Drug Mart.
Shoppers embraced personalization last month, rolling out a digital deals program nationally to Optimum Card holders on its email list. Weekly emails offer individualized deals and online coupons to customers based on their purchase histories.
“Generic marketing messages just don’t resonate as much as we’d like them to,” said David Harrington, the retailer’s vice-president of business analytics and Optimum. “Customers demand much more of us. We have already got you as an engaged cardholder — it is kind of our obligation to send [targeted messaging] back to you.”
After Shoppers launched a pilot program last fall with 100,000 customers, that group spent more money in the stores, he said.
“We saw a very clear uptick in terms of trips to the store and items in the basket,” he said. Now two million people are receiving tailored email offers. Customers currently have to print off the email coupons and redeem them in stores, but Shoppers is looking at a mobile component to the program, he said.
Loyalty programs are fast becoming more sophisticated as the competitive stakes rise in retailing.
“[PC Plus] and the digital component is showcasing what needs to be the trend and where everybody is going right now,” said Bryan Pearson, president of LoyaltyOne, the operator of Canada’s biggest loyalty program, Air Miles.
Air Miles members receive targeted emails based on their shopping habits — those who regularly pump gas at Shell stations or buy groceries at Metro, for example.
“Being relevant [in communication] is about delivering a customer experience that says ‘we get you.’ As humans we want to connect to things where people seem to understand who we are, and if you are not willing to become more customer-specific in your marketing you risk losing the business to companies who are willing to take that extra step.”
More critically for Loblaw, engaged in a price war with everyone who sells groceries and soft home goods, the new program insulates it from the margin-depleting competitive price matching between rivals who see each others’ flyers.
“No two customers get the same set of offers ever, [so there is] no possibility for our competitors to respond to this,” Mr. Stueckmann said.
PC Plus also gets around the burden that mass deals put upon the supply chain of a large national retailer, he said.