Will a Prime-style subscription service take Albertsons business to a new level?
Albertsons is following the playbook of some of the most cutting-edge figures in retail and launching its own subscription service with an important Amazon Prime-style perk.
The program, called FreshPass, allows subscribers to get unlimited free grocery delivery, reports Progressive Grocer. FreshPass, which is an optional service added to Albertsons’ existing apps, costs $99 per year or $12.99 monthly. With a subscription, shoppers get free delivery on orders of $30 or more.
The grocer is offering a 30-day free trial with five percent off of some of its private label products and ongoing perks, like food and wine experiences, to incentivize adoption. Albertsons is also launching two other new digital offerings — a Deals & Delivery app and an upgraded loyalty program. The loyalty program, called Albertsons For U, will automatically fold in members of the grocer’s earlier program.
The cost of Albertsons’ FreshPass program is about on par with Walmart’s new Walmart+ subscription service (which offers unlimited free delivery and various other perks) and about $20 cheaper per year than Amazon Prime.
Even before the novel coronavirus pandemic, surveys indicated that a majority of customers preferred free, fast shipping on e-commerce orders. The drastic uptick in the use of grocery delivery since the beginning of the pandemic has found grocers competing to provide such services at a greater scale than ever before.
Some of the biggest names in retail, however, are beginning to make customers pay a premium for the privilege of fast delivery in some cases. Amazon recently announced that grocery delivery from Whole Foods, which has until now been free with Amazon Prime membership, will cost an additional $9.95 in some pilot markets.
Albertsons, once considered a laggard among grocers, has undergone the process of enhancing and revamping its operations over the past few years. The chain has piloted micro-fulfillment centers for online orders, in-store robots, automated grocery pickup kiosks and other new omnichannel technologies.
The grocer also went public in June of 2020, finally completing its IPO after several failed attempts.
- Albertsons Launches Amazon Prime-Style Membership Program – Progressive Grocer
- Survey says consumers want online orders shipped fast and free – RetailWire
- Walmart Plus: price, free trial, and all the details on Walmart+ membership – What Hi-Fi?
- Prime Members will have to pay for grocery deliveries from Whole Foods – RetailWire
- Will Albertsons have robots filling online grocery orders in its stores? – RetailWire
- Albertsons pulls off downsized IPO after years of trying – Reuters
DISCUSSION QUESTIONS: Will a membership program with unlimited free delivery work for Albertsons and its existing customers? What will Albertsons need to do to differentiate its offer from others offering similar subscription services?