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My Hannaford Rewards delivers a win/win: Savings and private label promotion



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My Hannaford Rewards delivers a win/win: Savings and private label promotion

Hannaford’s new rewards program is a great example of a grocery retailer making an investment in the promotion of its own private label products – at the same time, it refreshes the traditional grocery store loyalty program to deliver greater value and ease for the customer. After an 11-store pilot, the program is being rolled out to all 181 Hannaford stores.

For Hannaford, it’s a way to drive the sale of private label products with with higher gross profit margins. For customers, the big advantage of the new My Hannaford Rewards program is that it delivers two streams of savings at the same time. Participating customers receive:

  • Weekly digital coupons from national and regional-brand products that are personalized to the household to ensure they are relevant and of value. This could represent $2 to $3 per week and add up to more than $30 a quarter ($2.50 savings in coupons per week for 12 weeks).
  • Participants also earn a 2% rebate on every Hannaford store brand product they purchase; the rebate is delivered quarterly. According to Hannaford, “About 5,200 fresh and center-store items, from fresh meat, seafood and deli items to thousands of packaged products, qualify for rewards.” For example, if a customer spends an average of $30 on Hannaford brands per week for 12 weeks, they would have $7.20 deducted from their bill. 

Taken together a regular customer could easily save an additional $35 - $40 over the quarter by shopping at Hannaford, which already has an everyday low price reputation.

BMC POV

My Hannaford Rewards program is a win/win that will strengthen Hannaford’s reputation as a place to save on groceries – without the company having to absorb all of additional expense.

For the customer

  • It’s completely digitally delivered.  All a customer has to do is download the app to their smartphone.
  • Every customer who shops the store pays the same price for an item regardless of whether or not they’re in the new rewards program, which can be reassuring to the broader base of customers.

For the retailer

  • The savings from redeemed digital coupons are paid for by product manufacturers and have no cost to Hannaford.  Depending on the arrangement, the manufacturers may also pay Hannaford an 8 cent per coupon handling fee.
  • The 2% rebate on Hannaford brands encourages shoppers to purchase items that typically carry a higher gross profit margin than comparable advertised brands. This means that Hannaford will actually receive more profit per item sold as long as the margin on the private label is more than 2% greater than the similar advertised brand.

Related Posts

> Next generation private label products from Jet: Time to harness this trend

> Measured/loyalty marketing and the digital age: Q&A with Brian Woolf (blog)

> Driving loyalty: What retailers are doing wrong and how to fix it (blog)

> Hannaford uses learning lab store to test drive improvements

Why Brick Meets Click? We are a strategic advisory firm that works with organizations to find and evaluate the right path forward in today’s integrated physical/digital food retail business. Learn more our services.

 

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