Will a national loyalty program yield rewards for Whole Foods?
Whole Foods Market is rolling out a nationwide rewards program in 2017.
The grocer’s first rewards pilot launched in Philadelphia in 2014 and was introduced in the Dallas-Fort Worth in late July. The chain offers enrollees “a number of rewards” including 10 percent off the new member’s first purchase, a one-time coupon good for 15 percent off any department and select free products. “The more customers shop at Whole Foods Market stores, the more rewards are unlocked,” Whole Foods wrote in its press release announcing its Dallas-Fort Worth roll-out.
Last week on a fourth-quarter conference call with analysts, Jason Buechel, the grocer’s EVP and CIO, said that nearly 50,000 customers had already registered for the program in Dallas. Said Mr. Buechel, “We are excited about the results that we are already seeing and building findings into our plan to roll to all stores next year.”
The rewards program will be part of an overall greater focus on digital marketing and promotions. Tapping its roughly five million subscribers in its CRM databases, Whole Foods has recently seen an “uptick” in e-mail promotions and will integrate more digital coupons within its new loyalty program. Said Mr. Buechel, “This really allows us to have the ability to target offers as well as learn better around the behaviors of what’s driving folks into stores and making sure that we’re teeing up offers that are relevant for our customers.”
Some foodie websites saw the move as a reaction to competition and an attempt to fight its “Whole Paycheck” image while continuing its shift to become more like traditional grocers.
A.C. Gallo, president of Whole Foods, said on the call that promotions and price investments are becoming an “integral part of our conversation, but we are not participating in a race to the bottom.” He stressed that Whole Foods’ differentiator continues to be its focus on quality food and the experience. He added, “When other people might be promoting certain commodity pricing, we are going to continue to maintain our standards and promote our higher quality products.”
- Whole Foods Market Reports Fourth Quarter and Fiscal Year 2016 Results – Whole Foods Market
- Whole Foods Market expands rewards program to Dallas-Fort Worth – Whole Foods Market
- Whole Foods Market 4th Quarter Earnings Script – Whole Foods Market
- Whole Foods Will Launch a Rewards Program – Grub Street
- Whole Foods Is Launching a Rewards Program in 2017 – Eater
DISCUSSION QUESTIONS: Can Whole Foods successfully use a national rewards program to fight its “Whole paycheck” image without diluting its premium positioning with consumers? Do you like the way the rewards program seems to be structured?