Dominick's Finer Foods is hoping that its new digital discount program, which offers shoppers savings on items they already purchase, will enable it to gain share in the highly competitive Chicagoland grocery market even if it means giving up some profits in the process.
The new Just for U program, according to Crain's Chicago Business, allows Dominick's to analyze a shopper's purchases and identify potential sales opportunities. The publication gives an example of someone who buys baby food or formula, but not diapers. Just for U can flag that and offer the customer a diaper deal.
"The (product) categories people would include in a typical supermarket stop or trip have shrunk, and there are categories that people don't consider supermarkets to be competitive (in)," Tim Nelson, managing director of Tris3ct LLC, told Crain's.
"Chicago is a highly competitive market where customers tend to shop in more than one place," Don Keprta, president of Dominick's, said in an interview. "The crux is to get you what you want and make sure you get it from us."
The Crain's piece pointed out that Dominick's is investing its own money to gain share versus going the usual practice of asking consumer product manufacturers to pick up the tab.
"We'll sacrifice a bit of gross margin on certain items to bring those people in our stores, but the additional sales will more than offset that," Mr. Keprta said.
"This is how the supermarkets can get back into the game after years of having no response to this channel-switching," Mr. Nelson told Crain's. "This could be a powerful tool to win shoppers back to some of these high-value, high-growth categories."
Discussion Question: Is Dominick's on the right track with its Just for U program? In offering deals based on past purchases, is the chain missing other sales opportunities?
How much market share do you think Dominick's will gain or lose as a result of the Just for U program?