The start of the new year generally brings guilt over the indulgences of the holiday season and resolve to exercise, lose weight, and eat healthier. What better time for grocers to use their loyalty programs to encourage consumers to keep their resolutions?
Albertsons has done just that: offering incentives to consumers through January.
The company launched its Sincerely Health platform last year, accessible through its grocery app and websites for chains including Albertsons, Safeway, and Shaw’s. The Packer recently reported new customers who sign up for the platform will get a $25 reward and quadruple points for store brands and fresh vegetables through the end of the month.
Matthew Landry of the University of California Irvine told The Food Institute it’s likely more grocers will develop mobile health apps since the incentives easily can be connected to their loyalty programs.
“Following the White House Conference on Hunger, Nutrition and Health, we’ve seen many grocers developing out nutrition-focused initiatives. Kroger, for example, launched a national Food is Medicine Research Initiative with the Rockefeller Foundation and the American Heart Association,” Landry said.
Albertsons’ program has the potential to encourage healthier eating habits, said Ash Davis, CEO of Skyline Social.
“However, the success of such initiatives also depends on effective marketing and education to ensure customers understand the benefits,” Davis said.
Which means any gains in health may be short-lived.
Neil C. Fennessey, president and CEO of marketing technology firm Four Mangos, said he has been involved in the development of health and wellness programs, including Michelle Obama’s Kids Live Well mobile app.
Keys to Successful Incentives
“In short, grocery coupons for healthy food – alone – is not an incentive,” Fennessey said. “There are many research studies out there that show that when consumers are given the opportunity to purchase healthy food, they will do so but still buy junk food. In fact, the coupons give them the option to buy more junk food. Insane right? Yes, people bought the healthy food with the coupons but not as often. Points towards your bill was also an option but people did not use those points to buy healthy options.”
Albertsons is not the first grocery company to make the leap into promoting health. In September, Giant Food, the Washington-area regional grocery chain, introduced its pharmacy department rewards program, awarding 100 points for every new prescription, transfer and refill, as well as for immunizations.
But whether these incentive programs can drive sales is an open question. Research by Upside questions the effectiveness of loyalty programs in general.
“In the sea of nearly identical programs, grocers are racing to keep up by adding perks such as free delivery or bigger buy-one-get-one savings,” Upside’s Thomas Weinandy said in a blog post. “The nature of an arm race is that entities are all fighting for the same thing — in this case, a finite number of customers — but individually spending more money than what they will be able to recoup.
“These additional program perks often end up costing retailers much more than traditional points-based loyalty programs do. These offers overshadow any return on investment that loyalty programs might provide, with retailers essentially overinvesting in a portion of their customer base.”