Digitally-disconnected shoppers are already upset that paper coupons are being overtaken by digital coupons that they can’t access. So just wait til they find out that their plastic store loyalty card is being phased out in favor of the store’s app.
Ahold Delhaize, the parent company of East Coast grocery chains Food Lion, Stop & Shop, Hannaford and Giant, says it’s time for its card-carrying customers to go digital.
The company’s newly-announced “Growing Together” blueprint identifies key areas it plans to focus on in the years to come. One of the strategies involves the retailer’s loyalty programs, and catering to its most profitable customers.
“We intend to funnel loyalty customers from physical cards to our digital apps, which should yield a rapid increase in monthly active users,” the company announced. And why would it be doing that? Because “an omnichannel shopper spends 1.5 to 3 times more with us,” the company pointed out. “Therefore,” CEO Frans Muller further explained to investors, “by infusing more life and more content and transforming our loyalty systems to lead with digital first, we aim to drive up our omnichannel sales and loyalty sales up to over 80% by 2028.”
So shoppers who still swipe their little plastic cards to save money apparently don’t spend enough of it in Ahold Delhaize’s stores. So the company hopes pushing those shoppers to ditch their cards and embrace the app will make them more engaged, more targetable with personalized offers, and more likely to spend more money at Food Lion, Stop & Shop, Hannaford and Giant.
Food Lion was one of the first grocery chains to introduce a card-based loyalty program way back in 1995. Stop & Shop debuted its own a year later, and Giant’s followed a few years after that. Their benefits were pretty standard for the time – shoppers willing to hand over some of their personal information and have their shopping habits tracked, could get lower prices on advertised products by scanning their card when checking out. Nonmembers were stuck paying full price.
By the time these stores’ corporate cousin Hannaford introduced its first loyalty program much later, in 2018, it was part of the next generation of loyalty programs – a virtual, app-based program with no plastic card required. Just scan your app or type in your phone number at the checkout to get your deals.
That’s the model Ahold Delhaize now wants its other stores to follow. But old habits may be hard to break for some die-hard card users – especially since getting your loyalty savings these days is a lot more involved than just swiping your plastic card and automatically getting discounts. With many loyalty programs requiring you to go online first to clip or activate individual deals, the old-fashioned loyalty card is one of the last tangible, tactile savings opportunities for shoppers who haven’t gone fully digital and don’t shop with smartphones.
So losing physical access to grocery savings may be a step too far for some. For several years now, consumer groups, lawmakers, and many of the elderly and low-income shoppers most affected have complained about digital discrimination at the grocery store. With many savings now in the form of digital coupons, shoppers who are digitally-disconnected argue they’re being left out and forced to pay full price.
That argument could extend to loyalty programs as a whole. Just consider the debate happening in the UK. Earlier this year, the government launched an investigation into the fairness of grocery loyalty programs, with some critics citing the phaseout of physical loyalty cards as being particularly unfair. Several major British grocery chains now have digital-only loyalty programs, requiring shoppers to have their app in order to access their deals.
“With such high levels of over-75’s not using the internet, let alone having a smartphone or being able to understand how apps work, you’ve got a huge proportion of what can be a very vulnerable part of society who cannot get access to certain deals,” a marketing expert told the Daily Telegraph newspaper. “We regularly hear from older people who are told that they should be doing things online and who find that because they do not use the internet, they often miss out on the best prices, loyalty discounts and rewards,” a spokesperson for an elderly advocacy group added.
Representatives for Ahold Delhaize did not respond to requests for comment about whether the ultimate goal is to go all-digital and eventually do away with physical loyalty cards altogether. But by more heavily promoting its digital-only deals, the company likely hopes shoppers will make that decision for them. If not, the move may simply provide more fuel for the fire, as the debate over digital discrimination goes on.
Image source: Food Lion
