Kroger Revamps Loyalty Program Following Successful Expansion Pilot
Kroger is launching Boost across The Kroger Family of Companies. Boost is an expanded loyalty program that began as a pilot earlier this year.
An annual membership program, Boost builds on Kroger Plus, providing consumers with unlimited free grocery delivery on orders over $35, as well as fuel discounts of up to $1 per gallon and savings on Our Brands products.
Over the last several months, Kroger piloted Boost in four divisions, which resulted in new members and an increase in delivery sales compared to non-Boost divisions.
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"As customers continue to evolve how they shop and eat, this expansion of our loyalty program offers more personalized value in groceries and fuel, alongside easier access to convenient shopping solutions, such as delivery," said Yael Cosset, senior vice president and chief information officer for Kroger.
"We are committed to consistently delivering a best-in-class seamless experience with zero compromise – the fresh and quality products our customers want, how they want it and when they want it,” Cosset added. “We recognize this is especially important as our customers are facing an inflationary environment and rising fuel prices."
Bill Bennett, Kroger vice president and head of e-commerce, said that Boost contributes to the company’s rapidly expanding ecosystem and helps to bring value and convenience to families across the U.S., particularly as Kroger rolls out new delivery fulfillment centers.
[Read more: Building Shopper Loyalty in the Customer-Centric Age]
"Through Boost, Kroger is uniquely positioned to be ‘Fresh for Everyone,’ making grocery delivery accessible to more customers through the industry's most affordable grocery delivery membership program,” added Bennett. “Combine this with our industry-leading fuel points program, we are confident we have built a differentiated membership program that our customers will love."
How It Works
The program offers three tiers. Consumers can continue to receive free benefits with Kroger Plus, which provides fuel points per $1 spent, digital coupons, digital specials, and online grocery ordering.
The second and third tiers are part of the company’s paid membership program, Boost. Members receive all the initial benefits, and for tier two also get free, next-day delivery and $100+ savings on specialty brands such as Murray's Cheese, Vitacost, Home Chef, Simple Truth and Private Selection. Tier three adds onto those benefits with free delivery in as little as two hours.
Tier two costs $59 per year, while the third tier is $99 per year. Kroger estimates the membership saves consumers more than $1,000 per year on fuel and grocery delivery.
The Benefits of Rewarding Loyalty
Several retailers are in the process of revamping their loyalty offerings, putting an emphasis on delivery. Walmart recently announced it would be consolidating Walmart + with InHome Delivery to expand offerings and reduce costs. For Prime Day, Amazon announced it was offering a year-long partnership with GrubHub for free delivery.
McKinsey data shows that demand for these types of offerings continues to grow.
In 2019, consumers spent an estimated $25 billion to $30 billion on paid loyalty programs, about a 25% to 50% growth rate from the previous year. Additionally, 63% of consumers are already members of at least one paid loyalty program.
