BOISE, Idaho — Albertsons here said last week it is eliminating the loyalty-card program at all Albertsons-banner stores, and is evaluating its loyalty programs at other banners.
The move is in contrast to efforts by other retailers to enrich their consumer databases and create more personalized marketing offers.
The company eliminated the cards at its Albertsons supermarkets as of last Wednesday “to offer the same prices to all customers,” Chris Wilcox, a chain spokeswoman, told SN.
The change affects all Albertsons-banner stores operated by Albertsons LLC that were acquired earlier this year from Supervalu, encompassing 414 locations in Southern California, the Pacific Northwest and the Intermountain.
Albertsons LLC and New Albertsons Inc. (NAI) are divisions of AB Acquisitions. Wilcox said the decision to eliminate the cards at the Albertsons Market stores was made by the marketing and merchandising personnel in the LLC division, who operates separately from NAI executives.
She said NAI is evaluating all marketing program, including whether to continue loyalty card programs at the 457 units of Acme, Jewel-Osco and Shaw’s/Star Market it oversees.
“In evaluating the [loyalty-card] program, it comes down to a customer-facing decision, and the division leadership teams at Albertsons LLC felt eliminating the card in other divisions had been well-received by customers.”
Cards were eliminated in 2007 at Albertsons LLC stores in Colorado, followed by units in Arizona, Florida, Louisiana, New Mexico, Oklahoma and Texas.
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Wilcox said the company opted to post the decision to discontinue the loyalty cards on its website rather than through a press release “because we wanted it to be a message from the company to the customer rather than a general announcement from Albertsons.
“We’re seeing a shift in how people relate to retail companies, and we wanted it to be more personal.”
Wilcox said Albertsons LLC is retaining the U-Promise program for loyalty card customers “because we felt customers who are active participants would want to continue earning money in those accounts.”
The company is continuing to allow customers to use their cards to earn points for discounts in its Fuel Rewards program, though it is evaluating that program. Wilcox said customers will be allowed to continue to earn points through June 25 and to redeem them through the end of July.
The Fuel Rewards program was already discontinued earlier this year at Jewel-Osco stores, she added, and NAI is evaluating a similar program at Acme Markets, where only a handful of stores offer the discounts, she said.
'Risky Tradeoff'
Jon Hauptman, partner at Willard Bishop, Barrington, Ill., noted that “most retailers are moving in the other direction, to capture more shopper data.”
“While I understand that eliminating the card can be positioned as a notable short-term marketing tactic — ‘You don’t need a card to get a discount’ — over the longer term, they are giving up the ability to better understand the needs and behavior of the shopper. That’s a risky tradeoff to make.”
He said the move might force Albertsons to emphasize “localization vs. personalization” in terms of its product assortments.
“There is great value in doing that,” he pointed out, “and many retailers with card programs need to advance to localization first before they are ready for personalization.
“However it is still somewhat limiting because they are unable to take that last step with the shopper.”
Mark Heckman, president of Mark Heckman Consulting and a former vice president of marketing for Marsh Supermarkets, Indianapolis, said Albertsons may see the move as a cost-saving decision to save the expense of maintaining a database.
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“It also tells me that through all the turmoil at Albertsons over the past few years, they have done precious little with their shopper data in terms of direct mail, targeted email as well as some of the other typical programs that fall under the umbrella of shopper loyalty,” he said.
He also noted that he thought it was unusual for Albertsons to make the announcement without unveiling another marketing initiative “that become the headline.”
“All in all, I have always believed that if a retailer were only in a position to deliver in-store discounts with their card-based loyalty program, then they are missing the point and should end the program and save the expense of cards, staff and databasing,” Heckman said. “However, Albertsons is making this move knowing that fuel programs, load-to-card digital coupons, and other continuity programs like U-Promise, all still require the use of their card. With that as context, this move seems hasty and not well thought out as it may make their consumer marketing connections more complicated for at least the short term, instead of less.”
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