Safeway’s Loyalty Program Makes Print Ads Obsolete
Safeway could be ready to stop running print ads as early as the end of this year, according to the company’s chairman and CEO Steve Burd.
Speaking last week to a group of analysts on Safeway’s fourth quarter 2012 conference call, Mr. Burd said the company had cut millions of dollars on newspaper ads and replaced them with personalized offers delivered digitally as part of its Just 4 U loyalty program.
"As people become more digital, there’s an opportunity, which we’re working hard at, [to] actually get out of the paper ads and make the ad itself personalized for every household," said Mr. Burd.
Robert Edwards, president of Safeway, said on the same call that the personalized aspect of Just 4 U has helped the chain gain share despite current economic challenges affecting its customers.
Speaking of higher fuel costs and the end of the payroll tax holiday, Mr. Edwards said, "It actually plays to the strength of Just 4 U because we can target specific individuals based on their shopping patterns and what we think is happening with their disposable income because it doesn’t affect all of our customers equally."
According to Mr. Burd, Safeway currently has 5.4 million households, representing about 45 percent of its sales, registered for Just 4 U. Safeway is finding that its new loyalty program, which offers savings from 10 to 20 percent off its normal Club Card, is driving increased purchases from already "loyal" consumers while bringing greater numbers into the "loyal" category.
While the largest numbers of consumers are accessing Just 4 U offers through their desktops, Safeway is seeing growing use of smartphones and tablets.
- Q4 2012 Safeway Inc. Earnings Conference Call Webcast – Safeway Inc.
- Safeway Management Discusses Q4 2012 Results – Earnings Call Transcript – Seeking Alpha (reg. required)
Do you see many other grocery chains in addition to Safeway eliminating print ads in favor of digital marketing offers in the future? Are loyalty programs such as Safeway’s Just 4 U going to be the cause of print ads being discontinued?