As grocers seek to build ongoing relationships with their customers, driving loyalty in the face of stiff competition, many are turning to subscription models to keep shoppers coming back.
Ahold Delhaize subsidiary Giant Food, for one, which operates 164 supermarkets in the DMV area, announced last week (June 30) the return of its summer Local Produce Boxes offering six or more items from area farms via subscription or for one-time purchase.
“Giant’s first summer of offering the Local Produce Boxes was a huge success, and our customers loved knowing that their produce was sourced locally by the best farms around our area,” Adenike Olaleye, Giant Food’s senior manager of eCommerce merchandising, said in a statement. “We’re working with more farmers this year to offer an even wider range of produce options that will keep our customers pleased week after week.”
The option to subscribe or not to can go a long way for today’s commitment-wary consumers. Even food and beverage (F&B) companies that have built their business on the subscription model are finding that it behooves them to have alternative sales channels for consumers who are not willing to agree to repeated purchases. Take, for instance, meal kit provider Blue Apron, which launched single-purchase multi-serving meal kits and ready-made Heat & Eat meals on the Walmart Marketplace last month.
“We’ll always have a subscription at our core, and our customers who use our subscription service find it incredibly convenient,” Blue Apron President and CEO Linda Findley told PYMNTS in a May interview, “but there’s a huge portion of the population that really loves the concept of meal kits … but does not necessarily want to be locked into a subscription.”
Many grocery retailers have been leveraging subscription models to drive sales, but these often come not in the form of scheduled shipments of designated products, but rather unlimited free delivery offerings and other perks for a set monthly or annual rate. Amazon, for instance, has its Prime program, which offers benefits for Amazon Fresh and Whole Foods Market shoppers, and Walmart has its Walmart+ offering, which offers free grocery delivery, among other benefits.
Pure-play grocers are offering similar options. Kroger, for instance, has its Boost tiered membership program, which it is rolling out nationwide, and Albertsons has its FreshPass subscription.
These kinds of subscription offerings would be more popular, were it not for rising food costs. Research from the May edition of PYMNTS’ Subscription Commerce Conversion Index, created in collaboration with subscription eCommerce platform sticky.io, which drew from a census-balanced survey of more than 1,900 U.S. adults earlier this year, found that 56% of consumers would be interested in a grocery subscription if product prices were lower.
Additionally, research from this month’s edition of the report, which draws from an April survey of more than 2,100 U.S. consumers, reveals that the two most common motivators for consumers to take part in subscription programs are enjoyment and convenience, with 82% citing the former and 81% the latter as reasons they have subscriptions.
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