Loyalty in the Digital Grocery Cart

Loyalty programs are revolutionizing how consumers interact with online grocery platforms, creating deeper engagement and significantly higher spending. 

Drawing from my extensive experience as a retail consultant, I examine how digital grocery services have evolved beyond mere convenience into powerful loyalty-building tools that drive both revenue and retention.

Walmart's recent success offers compelling evidence of this transformation. Their Walmart Plus program now accounts for approximately two-thirds of all online grocery orders, with members spending 40% more per order than non-members. 

Even more telling is that these loyalty members show nearly 10% higher intent to reuse the service – the very definition of customer loyalty in action. These metrics reveal how effectively structured loyalty programs can transform casual shoppers into committed customers.

The broader market reinforces this trend, with US grocery e-commerce reaching $9.8 billion in April, reflecting a 15% year-over-year increase. Delivery services are leading this charge with 29% growth, while ship-to-home options increased by 22%. 

For regional and smaller grocers, the message is clear: developing compelling subscription programs with free pickup options and data-driven rewards isn't optional – it's essential for survival. 

As consumer expectations continue to evolve, robust loyalty programs tied to digital grocery offerings won't simply be competitive advantages; they'll become table stakes in the industry. 

Is your grocery business prepared for this loyalty-driven future? Subscribe to hear more insights on how retailers can adapt and thrive in this rapidly changing landscape.

Chapters

• 0:00 Introduction by Scott Benedict
• 0:42 Online Grocery as Loyalty Platform
• 1:09 Walmart Plus Success Metrics
• 2:13 Future of Grocery Loyalty Programs
• 3:59 Final Thoughts on Industry Evolution

Transcript

Speaker 1: 0:03

Hello everyone, I'm Scott Benedict. In my work as a retail consultant, I've seen a number of grocery retailers struggling to remain relevant with consumers in the digital age. Certainly, online grocery provides a level of convenience that became mainstream during the COVID-19 pandemic. Local delivery from store has taken convenience to a whole other level, and retail media has provided retailers with another revenue stream while providing their suppliers with a highly efficient and effective marketing channel right at the point of consideration and purchase for consumers. However, until recently, I haven't heard or read much discussion about how online grocery became an effective platform for loyalty marketing programs. However, recent articles in the retail trade press have finally begun to explore this element of grocery retail that grocers of all sizes should certainly take note of.

Speaker 1: 1:06

As the nation's largest grocer, walmart's online grocery sales experienced significant growth this past month, in April. Largely, this growth has been attributed to the Walmart Plus loyalty program. According to a report by consulting firm Bricks Meets Clicks and Mercatus, approximately two-thirds of Walmart's online grocery orders were placed by Walmart Plus members during this period. These members not only shopped more frequently, but also spent over 40% more per order when compared to non-members. There's a couple of key points on this that I really want to explore a little bit further. First of all, these loyalty programs are certainly increasing member engagement. According to the recent report, walmart Plus members showed a nearly 10% higher intent to reuse e-commerce services than non-members, indicating the very definition of strong customer loyalty.

Speaker 1: 2:12

The online grocery market is certainly growing, and the overall US grocery e-commerce market reached $9.8 billion in revenue in April, marking a 15% plus year-over-year increase in sales.

Speaker 1: 2:29

Of those sales, delivery services led this growth with a 29% rise up to $4.2 billion in revenue, while ship-to-home sales grew by over 22% to $1.9 billion in revenue, and store pickup orders within that segment remained pretty steady at $3.7 billion. All really impressive numbers. Now, walmart's success with its loyalty program underscores the importance of such initiatives in attracting and retaining online grocery shoppers. Regional grocers or smaller grocers should certainly be encouraged to develop compelling subscription programs, offer free and fast pickup options and utilize data-driven rewards to compete effectively in the modern age of online grocery retail. Now, walmart's strategic focus on its Walmart Plus loyalty program has certainly proven effective in driving online grocery sales and in customer retention. And as the online grocery market continues to expand, implementing robust loyalty programs and enhancing delivery and pickup services will most certainly be critical for grocery retailers of all sizes to maintain their competitive edge. In fact, I would argue it will become table stakes in that industry moving forward. That's what I've been thinking about. I'm Scott Benedict.