Through a special arrangement, presented here for discussion is a summary of an article from Convenience Store Decisions magazine.
In July, Shell Oil Products U.S. launched its Grocery Rewards program in alliance with Ahold and The Kroger Co. Although still being rolled out, the oil giant feels the new loyalty marketing program could be a "game changer" in terms of cornering the market on fuel brand loyalty.
As part of Grocer Rewards, customers can earn points at Ahold and Kroger supermarkets on grocery purchases using the grocers' loyalty cards -- one point is earned for every dollar spent. For every 100 points customers accumulate, they earn a minimum of 10 cents off a gallon of fuel at participating Shell stations. The offer is valid up to 35 gallons per month.
"The beauty of these programs is that you have three partners -- Shell, the grocer and the dealer -- all connected by a seamless loyalty interface," said Dan Little, North America fuels marketing manager for Shell Oil Products U.S. "So when a Shell customer goes to a participating Shell station, they are prompted to utilize their Kroger rewards card or their Giant rewards card, and when they do so that dispenser will automatically authorize their reward. In addition to the discount they are receiving, customers feel empowered by prompting the immediate price roll back."
For Giant Foods, which sells its own proprietary gasoline at seven supermarkets in Virginia, Delaware and at a handful of stores, the Shell partnership creates no conflicts. In fact, the company was quite clear that it views the Shell loyalty component as a crucial part of its long-term plan to attract and retain its customer base.
"We work hard to give our customers the greatest value and help our shoppers stretch every dollar," said Bob Bennett, senior director of front end operations and cost containment for Giant Food. "In addition to the value programs we currently offer, like free antibiotics and $9.99 generic prescription refills, we're able to bring our customers more value and savings in a new area: transportation."
Giant Foods is working to bring manufacturers on board. For example, CPG companies, beginning in August, can now buy into the program by offering customers an opportunity to earn extra points on purchases of specifically promoted items.
"We want the customer that shops with us every now and then to stop hopping from store to store and stay with us," said Mr. Bennett. "As customers become more aware of the benefits we're offering, they may do some impulse shopping elsewhere, but it will be in the back of their minds that they can get a better a deal at Giant. At the end of the day, it will be hard for our competitors to top that."
Discussion Questions: What do you think of loyalty programs that drive customers to other retailers -- albeit-non-competing ones -- and vice versa? Specifically, what do you think of Shell Oil's tie-in with Ahold and Kroger?