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.

Episode Transcript

Speaker 1 (00:03):
Hello everyone, I'm Scott Benedict.
In my work as a retailconsultant, I've seen a number
of grocery retailers strugglingto remain relevant with
consumers in the digital age.
Certainly, online groceryprovides a level of convenience
that became mainstream duringthe COVID-19 pandemic.
Local delivery from store hastaken convenience to a whole

(00:27):
other level, and retail mediahas provided retailers with
another revenue stream whileproviding their suppliers with a
highly efficient and effectivemarketing channel right at the
point of consideration andpurchase for consumers.
However, until recently, Ihaven't heard or read much
discussion about how onlinegrocery became an effective

(00:50):
platform for loyalty marketingprograms.
However, recent articles in theretail trade press have finally
begun to explore this elementof grocery retail that grocers
of all sizes should certainlytake note of.
As the nation's largest grocer,walmart's online grocery sales

(01:10):
experienced significant growththis past month, in April.
Largely, this growth has beenattributed to the Walmart Plus
loyalty program.
According to a report byconsulting firm Bricks Meets
Clicks and Mercatus,approximately two-thirds of
Walmart's online grocery orderswere placed by Walmart Plus

(01:33):
members during this period.
These members not only shoppedmore frequently, but also spent
over 40% more per order whencompared to non-members.
There's a couple of key pointson this that I really want to
explore a little bit further.
First of all, these loyaltyprograms are certainly

(01:53):
increasing member engagement.
According to the recent report,walmart Plus members showed a
nearly 10% higher intent toreuse e-commerce services than
non-members, indicating the verydefinition of strong customer
loyalty.
The online grocery market iscertainly growing, and the

(02:15):
overall US grocery e-commercemarket reached $9.8 billion in
revenue in April, marking a 15%plus year-over-year increase in
sales.
Of those sales, deliveryservices led this growth with a
29% rise up to $4.2 billion inrevenue, while ship-to-home

(02:39):
sales grew by over 22% to $1.9billion in revenue, and store
pickup orders within thatsegment remained pretty steady
at $3.7 billion.
All really impressive numbers.
Now, walmart's success with itsloyalty program underscores the
importance of such initiativesin attracting and retaining

(03:02):
online grocery shoppers.
Regional grocers or smallergrocers should certainly be
encouraged to develop compellingsubscription programs, offer
free and fast pickup options andutilize data-driven rewards to
compete effectively in themodern age of online grocery
retail.

(03:23):
Now, walmart's strategic focuson its Walmart Plus loyalty
program has certainly proveneffective in driving online
grocery sales and in customerretention.
And as the online grocerymarket continues to expand,
implementing robust loyaltyprograms and enhancing delivery

(03:43):
and pickup services will mostcertainly be critical for
grocery retailers of all sizesto maintain their competitive
edge.
In fact, I would argue it willbecome table stakes in that
industry moving forward.
That's what I've been thinkingabout.
I'm Scott Benedict.