Consumers love home delivery. They’re willing to pony up annual fees for delivery fee savings as well as to grab coveted delivery time slots. So national grocers such as Ahold Delhaize, Albertsons, and Kroger are more than willing to accommodate them.
Amazon has really set the pace here as its Prime customers receive benefits at Whole Foods, as well as many other services and perks. Not to be left out is the Walmart+ program that the retailer began in early 2020 that centers around its grocery stores. Expect the subscription economy to continue to grow post-pandemic as more retailers enjoy the annuity revenue from customers who keep signing up.
The following excerpt from a Grocery Dive article reports more on the topic:
As retailers eye new ways of locking in loyalty among a consumer base that has dramatically shifted to digital shopping, many are looking to membership programs that offer unlimited delivery or pickup for a fixed fee.
Kroger and Albertsons are both offering unlimited-delivery subscriptions, while SpartanNash has a pickup program that offers no-fee fulfillment for just under $50 a year. Last week, Ahold Delhaize announced it will launch a subscription program with The Giant Company, its Carlisle, Pennsylvania-based banner, starting next year.
These programs promise to secure loyalty among consumers that are spending on average $95 per order, according to Brick Meets Click. They’re also a competitive response to Amazon, which is offering steep discounts through its Prime program as it flexes its muscles in grocery, as well as Walmart, which earlier this year rolled out Walmart+, a membership program that offers mobile scan-and-go and fuel discounts in addition to unlimited no-fee delivery.
“The industry is getting pushed in this direction,” said James McCann, a former CEO of Ahold USA who now serves as an investor and advisor to companies like Takeoff Technologies and Afresh. “I think it’s going to become a big part of the game plan at all the major grocers.”
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group