Dive Brief:
- Hannaford has introduced My Hannaford Rewards, a digital loyalty program that offers shoppers 2% rewards on private label purchases, according to The Shelby Report. It is the first loyalty program Hannaford has ever offered.
- In addition to the 2% rewards on store brand buys, the program offers free groceries to shoppers who sign up and delivers digital coupons based on consumers’ preferences. An employee test, launched in August, delivered better-than-expected results, according to the company.
- Hannaford is currently testing the program in 11 stores in Burlington, Vermont, and expects to roll it out chain-wide early next year.
Dive Insight:
Grocers across the country have invested a lot of money in their private label lines in recent years. In many cases, these store brands have become indistinguishable from national brands in terms of quality, and they offer better value and a unique selling point for grocers, too.
Simply having a top-notch private label lineup, though, is becoming less of a selling point for supermarkets as national chains like Kroger and Target, as well as online sellers Amazon and Jet, invest in their exclusive offerings. As large companies build out their brands and bring down prices, mid-level players like Hannaford may turn to incentives in order to drive loyalty.
The northeast grocer notes that its new rewards program will also spur shoppers to build bigger baskets. That’s what happened, at least, when the company tested the program on its 27,000 employees. That’s certainly a plus, but the greatest benefit may come in the form of customer data. Hannaford will be able to closely track shoppers’ purchases, and will be able to push out personalized coupons and other offers.
In an interview with Supermarket News, Hannaford CEO Mike Vail said it was partly the growing demand for personalized solutions that convinced the retailer to develop My Hannaford Rewards.
“The more and more that [demand] came to light, the more disadvantaged we thought we were at Hannaford,” Vail told SN.
Hannaford, like many traditional supermarkets, is under intense competitive pressure. But it benefits from being part of a strong company, Ahold Delhaize, which is smartly leveraging the size it achieved through last year’s merger to create cost synergies — anticipated to be $880 million over the next three years, the company noted during its most recent earnings report.
If Hannaford's private label rewards program succeeds, it will be interesting to see if Ahold Delhaize will roll out the initiative across banners.
