Are student loan repayments the next big perk in retailer loyalty programs?

Discussion
Photo: Price Chopper/Market 32
May 21, 2021

Price Chopper/Market 32 is looking to create deeper relationships with its customers as the grocer expands its reward programs beyond simple discounts on food and fuel. Recently added app-delivered opportunities provide members with the option of putting their points towards paying down student loans, supporting local schools, making contributions to a rotating list of charities, purchasing specialty kitchen products and entering periodic sweepstakes.

The retailer originally launched its AdvantEdge Rewards program as Fuel Advantage in 2006. As its name suggests, Price Chopper/Market 32’s customers were able to redeem points for discounted gas earned by making purchases in its grocery stores. The program has since expanded to include food and bonus item offers as well as gift card multipliers.

New updates delivered earlier this month via an enhanced mobile app provide AdvantEdge members with experiential, digital and physical reward options, including sweepstakes for shopping sprees and vacations. Members can also choose to stick with traditional food and fuel rewards or use funds to reduce their student loan debt and more.

A Price Chopper/Market 32 spokesperson told RetailWire that the grocery retailer made changes to its program based on requests from customers. The company was working on enhancements prior to the outbreak of COVID-19 last year, but “the pandemic really underscored the need for online redemption options for those not coming into the store, as well as for those seeking something new and exciting.”

Price Chopper/Market 32 said consumer feedback provided management with a focus for the delivery platform as well as the types of offers that members would value. It conducted a pilot program with its own associates over several months to work out the kinds of offerings before its public unveiling.

The spokesperson said the new student loan repayment perk is proving more popular than expected. Over time, the grocer expects to see all of the new and existing elements of AdvantEdge “to have their own fans.”

Price Chopper/Market 32 announced in February that it would merge with Tops Markets to join the two New York state regional grocery chain operators under a single corporate entity. The deal, which has not yet closed, will enable the two companies to continue operating individually with Price Chopper/Market 32 based in Schenectady and Tops in Williamsville. The new company will operate about 300 stores under the Price Chopper, Market 32, Market Bistro and Tops Markets banners.

DISCUSSION QUESTIONS: Do you see loyalty program perks such as student loan repayment, charitable contributions, sweepstake entries, etc. becoming a bigger part of these offers at retail? Will these offers create a greater sense of loyalty among members compared to standard rewards programs?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Specialty reward ideas will have limited appeal versus the ubiquitous lure of cash."
"Money isn’t rational. If it were, cash would trump all of these other perks."
"Creativity with loyalty programs is fine, as long as the administration of those perks don’t start to outweigh the benefits."

Join the Discussion!

17 Comments on "Are student loan repayments the next big perk in retailer loyalty programs?"


Sort by:   newest | oldest | most voted
Richard Hernandez
BrainTrust

Wow – that is a novel idea. I hope it picks up steam in other states with other chains. I remember when I was a child my father had an account for my college that he would put money in each week. Same concept I believe. What a great way to help the community.

Gene Detroyer
BrainTrust

Requests from customers? Did the customers really say, “I don’t want discounts any more, give me some sweepstakes entries” or any other option they are now offering? Or maybe, “I can go across the street and get my product for $1 less, but if you pay 16 cents toward my student loan I will come to you.”

Is retail competition morphing into competition of loyalty programs and who can make the most convoluted one? Please make mine simple, if I am one of your best customers give me the biggest discounts and specials you can afford.

George Anderson
Staff

As a point of clarification: Price Chopper continues to give its customers the same rewards they have enjoyed for years. The new elements are added perks that AdvantEdge members can choose to use or not.

Gene Detroyer
BrainTrust

Thanks, George. I guess what the customers really said was that the current reward program was not enough and they needed more.

Ben Ball
BrainTrust

Specialty reward ideas will have limited appeal versus the ubiquitous lure of cash. One advantage point may be providing the opportunity for affinity groups (families, friends, etc.) to join together to support a specific personal cause. For example, contributing to paying off a family member’s student debt. Sweepstakes as a substitute for cash? Meh.

Suresh Chaganti
BrainTrust

Directing rewards to a specific use – charity, purchase of stock, airline miles, etc. – works when the reward value is much bigger than the cashback. Only then will consumers take the extra effort to do the mental math and signup.

A typical cashback is between 2 percent and 3 percent. Does the student loan repayment work out to at least 5 percent? If not, just give me the cashback and let me worry about how I use it.

Jeff Weidauer
BrainTrust

Complex programs that provide points will never be as effective as a simple low price message. Customers might tell you that a new loyalty reward idea sounds great, but the proof will be in whether they actually change behavior as a result of the program. The chances of that happening at a material level are very low.

Ken Morris
BrainTrust

I think this is a brilliant idea by Price Chopper. Paying down student loans and other creative uses like charitable contributions will engender loyalty. It will create a bond that will last for decades. Loyalty is a hard thing to come by and an easy thing to lose and this relationship created by a company that cares will last a lifetime.

Chuck Ehredt
BrainTrust

This is a good example of retailers adapting their loyalty programs to offer rewards that are more tailored to the desires of each customer segment. Customers should have much more choice than just cashback, proprietary points, or discounts.

Of course, some points/miles can have much higher perceived value than their cost, so offering exchange between loyalty currencies can also appeal to those who know how to maximize value of an opaquely-valued loyalty currency.

DeAnn Campbell
BrainTrust

More and more, retailers are integrating themselves into the lives of their customers to retain loyalty at a time when loyalty is increasingly hard to earn. As more shopping begins online, the enormous array of choices means the buying decision is more frequently made by price rather than love of brand. This means retailers must find ever more creative ways to matter to their customers and differentiate from competitors. In the quest for customer loyalty today, retailers are taking on environmental sustainability, equal opportunity and political affiliation. They are partnering with major competitors and becoming restaurateurs and hair salons. Offering student loan help in exchange for brand loyalty feels quite normal in comparison, and more personally directed and effective in the long run, provided the products are relevant to the customer.

Dan Surtees
Guest

Loyalty programs are about rewarding your customers for their loyalty! The challenge for the retailer is understanding what is important for each customer and being flexible in the reward. Some will want monetary based rewards, for others the reward will be more complex. Support for local charities is a great example. Instead of offering me points (that I may use in the future), a charitable contribution to a worthy organization from the retailer might be a higher value to me. The key is flexibility in the rewards from the loyalty program.

Jennifer Bartashus
BrainTrust

Creativity with loyalty programs is fine, as long as the administration of those perks don’t start to outweigh the benefits. The more options that are offered, the more difficult that becomes. Is the ROI there in terms of driving enough incremental spending by shoppers to offset the cost is a key question that needs to be answered.

Liz Crawford
BrainTrust

Money isn’t rational. If it were, cash would trump all of these other perks. I have seen consumers opt for a t-shirt rather than its equivalent in cash. Likewise, I believe that repaying student debt while grocery shopping would be more valuable than the face value of the reward.

Richard J. George, Ph.D.
BrainTrust

I think this is a novel “continuity of purchase” program. I am not in favor of the term “loyalty” program. Be loyal to your family, church, alma mater, etc. but not to a retailer. Instead retailers need to be loyal to their customers. How? By simply delivering on their promises. If their customers value these offerings then it makes sense. If it is a tie-breaker, it makes sense. If it enhances continuity of purchase, it makes sense. Don’t confuse any of these reasons with loyalty!

David Slavick
Guest
28 days 19 minutes ago

There is no harm in trying different things. As shared, some ideas work for certain segments of the chain’s customer base. It is new news. It is trial, learn, refine and continue to innovate. Are some of these new “benefits” going to become primary or a replacement for two-tier pricing ($19.99 for crab legs as a member vs. $29.99 for non-members)? No. Guarantee the ratings for the “standard” design remain high, but sure why not give me choices, options and more — for free the member will always say yes. Now will they actually engage in all of these new additive aspects? Yes – those who find it relevant and meaningful. Likewise, it is up to the program owner to communicate and highlight those benefits on a consistent basis vs. the usual launch and forget it.

Venky Ramesh
BrainTrust

Providing customers innovative options is always a great idea. For neighborhood stores like Price Chopper/Market 32, it is important to build a community relationship and align to a purpose that the community values. Even if I chose to walk away with the cashback option, the very fact that Market 32 thought about sharing my worry around my kid’s college funding goes a long way in gaining my loyalty.

Craig Sundstrom
Guest

Or they can simply give cash back and let people choose for themselves.

I’m not a big fan of this (which is by no means the same as saying I don’t think this will be popular): rewards programs, like much else in life, work best when they’re simple. The more complexity we add — the more there is to read, or check, or do — the less effective it will ultimately become.

wpDiscuz
Braintrust
"Specialty reward ideas will have limited appeal versus the ubiquitous lure of cash."
"Money isn’t rational. If it were, cash would trump all of these other perks."
"Creativity with loyalty programs is fine, as long as the administration of those perks don’t start to outweigh the benefits."

Take Our Instant Poll

How likely are perks such as student loan repayment, charitable contributions, sweepstake entries, etc. to create a greater sense of loyalty among members compared to standard rewards programs?

View Results

Loading ... Loading ...