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Albertsons Takes On Walmart, Amazon With New E-Grocery Subscription

Albertsons is getting a digital makeover. The grocery giant announced on Monday (Aug. 16) that it is overhauling its digital offerings with a new app, a new loyalty program and a new e-grocery subscription service.

“We have been working hard to revolutionize Albertsons Companies’ digital offerings and enhance all aspects of the food experience and journey,” Chris Rupp, the grocer’s EVP and chief customer and digital officer, said in a statement. “We have been in lock-step with our customers, and today’s launch … exemplifies our commitment to innovation and customer service, meeting shoppers where they want to shop, whether that is in-store, curbside or at home.”

Upgrade 1: Deals & Deliveries App

The app congregates rewards, online ordering, and deals and promotions in one place, providing information about in-store inventory and allowing shoppers to view their previous online and brick-and-mortar purchases. The app works for all of Albertsons Companies’ more than 20 grocery brands, including its self-titled brand, Safeway, Vons and Jewel-Osco.

Upgrade 2: Sweeter Rewards

As grocers compete to win new-to-digital shoppers’ online loyalty, perks and rewards can make a significant difference in terms of standing out from the pack. Albertsons has rebranded its existing Just for U loyalty program as Albertsons for U, an umbrella that includes individual brands’ programs, such as Safeway for U and Jewel-Osco for U. New additions include a special birthday offer and a free item each month.

Upgrade 3: Grocery Delivery Subscription Service

With the addition of the FreshPass subscription service, Albertsons is challenging Amazon Prime and Walmart+, offering a flat-rate program for unlimited free grocery delivery. The program costs $99 for a year or $12.99 for a single month, and its members receive free delivery — in some places, free two-hour delivery — for orders totaling more than $30.

Albertsons did not respond to a request for comment on the details of what share of FreshPass orders will be fulfilled in-house, versus what share will be handled by third-party providers such as Instacart.

The service costs slightly less than Amazon’s and slightly more than Walmart’s, and will likely have a difficult time competing against the mega-retailers, given Albertsons brands’ more limited selection. Where Amazon and Walmart offer items across categories, Albertsons is primarily limited to grocery.

On a call with analysts at the end of July, the company’s CEO Vivek Sankaran emphasized the role of the physical store in the company’s digital business. “Our greatest asset is the store,” Sankaran said. “When you have that, it gives you a great base to build an eCommerce business, and our eCommerce business is built on those stores.”

Related news: Albertsons CEO: Our Greatest eCommerce Asset Is The Physical Store

Now, it seems the company is turning its focus back to its digital offerings, which could be an essential way to reach younger shoppers. PYMNTS’ study, The Bring-It-To-Me Economy: How Online Marketplaces And Aggregators Drive Omnichannel Commerce, created in collaboration with Carat by Fiserv, which surveyed a census-balanced panel of over 5,000 U.S. consumers, found that 27 percent of shoppers are ordering groceries online for delivery more than before the pandemic. This number hops up to 32 percent when you look at Gen Zers and all the way up to 40 percent for millennials and bridge millennials. By updating its digital delivery options, Albertsons could secure the loyalty of these shoppers.

Learn more: Ease, Convenience Drives Merchant Choice For 94 Pct Of Consumers

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