Payment Plans: Shoppers Subscribe to Discount Deals

Homeland Food Stores jumped on the daily deal craze when it teamed with Aisle50 last year. And the retailer has been just as quick to get involved in the subscription commerce movement.

The 76-store Oklahoma City chain liked the idea of offering a convenient discount to Homeland shoppers, Phil Payment, vice president of marketing and merchandising, told SN.

Subscription services provide prepaid, scheduled deals. In the food retail sector, the strategy is commonly used for items like trash bags, paper goods and diapers.

Homeland was the pilot for digital grocery deal site Aisle50’s new subscription feature. Customers pay for the deal in advance, and choose the frequency with which they want to receive the deal. They will continue to get new deals at the start of the next cycle unless they cancel. The subscription length varies depending on the type of product offered.

A Blue Diamond almond deal at Homeland is touted as a 34% savings. (See sidebar.)

Homeland shoppers can currently get an Aisle50 deal for a box of more than two-dozen types of Glad Tall Kitchen bags for $5.85, a 34% savings.

Subscribers can choose to have the deal loaded to their loyalty cards every six, eight or 10 weeks.

When the customer buys the product at a Homeland store, it rings up for free, Aisle50 co-founder Christopher Steiner told SN.

Automatic emails remind subscribers to use their deal, and when a new one will be loaded to their loyalty cards. If customers forget to redeem the deal, they can contact Aisle50 for a refund.

Subscriptions can be changed or canceled at any time. “If you don’t cancel, you get the offer indefinitely,” he said. “This way, you don’t have to worry about shopping around.”

Aisle50 started piloting the service at Homeland in April. The goal of the pilot was to gauge whether consumers would subscribe — and continue subscribing. Preliminary results from the Homeland pilot show that, for the most part, they do, said Steiner.  So far, 100 Homeland shoppers have opted in to the subscription. The large majority remain subscribers.

“We wanted to see if people would stick with it — and by and large, they do,” he said.

Steiner attributes this to the ease-of-use of the technology. Consumers can save money without searching for and clipping coupons. “It doesn’t require a lot of time to get the savings,” Steiner said.

Read more: Homeland to Offer Groupon Style Meals

Aisle50 is working to add more subscription deals to its offerings. It just teamed with Procter & Gamble to run a Pampers diaper subscription program at an Aisle50 retail client. Steiner declined to name the retailer.

Customers can choose to get a large box of Pampers diapers at a cost savings of about 18%. The deal is loaded to loyalty cards every two, three or four weeks, depending on the cycle chosen. Parents can change diaper sizes at any time during the service.

“This allows our retailers to get Pampers at or below prices at Target or Walmart,” Steiner said.

'Destination for Subscriptions'

While Aisle50 still offers traditional daily-type deals, it’s putting more focus on subscriptions.

“We want to become a destination for subscriptions,” Steiner said.

Retailers benefit because they get customers into the store. Manufacturers, in turn, get long-term, committed customers, said Steiner.

“They don’t have to worry about consumers straying to another brand,” he said.

Discounted packaged foods, household goods and other products are sold through Amazon’s subscription service.

Steiner describes Aisle50’s subscription program as modern ecommerce that helps retailers compete with discount retailers and subscription grocery  delivery services like Amazon’s Subscribe & Save.

Amazon’s Subscribe & Save is similar in that it’s a subscription service, but different in that products are shipped to one’s home.

Amazon customers are required to buy large quantities of product to get the deals. For instance, there’s an offer for a 20-roll package of Scott Bath Tissue for $12.32; and a 48-double roll of Quilted Northern Ultra Plus Bath Tissue for $22.74.

Amazon touts Subscribe & Save as a way to get a discount on top of Amazon’s everyday low price — plus free shipping. Amazon provides an extra 15% off with the purchase of five or more subscriptions.

Participating categories include nonperishable food, household goods and diapers.

Amazon’s subscription orders are available in monthly intervals from one month to six months. Customers select the frequency with which they want to receive new orders, and Amazon automatically sends subscriptions by the designated Subscribe & Save delivery day. Customers can change their subscription schedule online at any time.

Customers are charged for each order when the item is shipped. Before Amazon sends the next order, it sends an email letting the customer know that the order will be processed soon.

Happy Family, New York, marketer of Happy Baby organic baby food, is a manufacturer client of Amazon’s Subscribe & Save.

Now, the company is working with Aisle50 for its first in-store subscription event at Raley’s, West Sacramento, Calif.

Scheduled to launch today, the offer is for 40 packages of Happy Baby food for $45, down from $60.  Shoppers can sign up for a three-month, six-month or one-year subscription. They can change flavors and stages at any time.

Read more: Retailers Cleaning Up With Aisle50

The company sees the program as a convenient way to promote its brands.

“Some people prefer to come into a store and see and hold a product before buying,” said Helen Bernstein, Happy Family’s vice president of marketing.

Likewise, once Aisle50 shoppers come to the store to redeem the deal, they’ll be exposed to the company’s other products.

The technology fits in with the shopping patterns of today’s young moms, Bernstein added.

“This generation of parents is accustomed to buying products online,” she said.

Subscription commerce makes sense in baby food because it’s a frequently used product for new parents, added Bob Zimmerman, Happy Family’s vice president of sales.

“There’s an ongoing need to refill the supply,” he noted.

Sidebar: Let's Make a Deal

OKLAHOMA CITY — Homeland Food Stores’ foray into subscription commerce is part of an effort to provide the best grocery deals in the easiest format, said Phil Payment, vice president of marketing and merchandising.

Along with its Glad trash bag subscription offer, Homeland has about one dozen traditional grocery deals at Aisle50. Among them: Blue Diamond almonds, 6 ounces, two for $5.45, a 34% savings; and Annie’s organic Macaroni and Cheese, three for $4.13, a 39% discount. 

Aisle50 deals work like this: Shoppers prepay for discounted products with their credit card. The deal is loaded to their loyalty cards. They then get the product at the store, where it rings up for free.

Homeland’s Aisle50 customers are even offered free products at times. For instance, they can currently get a free Hershey’s chocolate bar sponsored by Central Oklahoma Dodge Chrysler Jeep.

Nearly 20,000 people have used Aisle50 at Homeland Stores since the retailer joined the service about one year ago, according to Aisle50 co-founder Christopher Steiner.

Among the most popular brand offers:

Other Aisle50 retail clients include Lowes Foods and D’Agostino Supermarkets.

Read more: D'Agostino Shoppers Visit Aisle50

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