Whole Foods Launches Customer Loyalty Program: Smart, or Just Another Grocery Rewards Program?

Author: Clay Walton-House
2 / 24 / 2015
Whole foods loyalty rewards program - Lenati

Whole Foods recently launched a customer loyalty program pilot in the greater Philadelphia market, and on the surface, it doesn’t appear too differentiated from other grocery rewards programs. Customers earn one point per dollar spent, and will receive offers and rewards based on their purchase patterns—hardly anything that loyalty marketers would count as innovative. Yet though the program structure and basic value proposition may be par for the course, one area where the program stands out next to other grocers is in the extent of digital integration achieved. Like best-in-class programs from other industries (for example, My Starbucks Rewards, Hilton HHonors, etc.), the Whole Foods program is launching with significant mobile and online features, including a rewards app tied to the member’s account—and for a grocery chain, that is a significant step forward. But is it enough? Or, will this program like many others in the grocery space, be lost in the shuffle and fail to achieve significant ROI?

Well, there’s good news for Whole Foods. Here are three reasons to think they have a greater chance of succeeding where other grocers have struggled:

1. Specialty – Whole Foods is a specialty grocer whose merchandizing, in-store experience, service, and prices reflect high quality. People who choose to shop there are making an intentional investment in the quality of food and other products they buy, and are more likely to require advice or guidance from store staff. Customers who are invested in their experience (financially and emotionally) have a higher propensity to engage with a brand’s rewards program—something that many grocers do not experience with their own customers. How well Whole Foods uses their rewards program to bring their specialization to the fore may have a lot to do with how engaged their members become.

2. Lifestyle – Whole Foods caters to deeply powerful life values of consumers. Whether consumers are health conscious, committed to consuming only organics, gluten-free, vegetarian, or “foodies,” Whole Foods presents an experience that is not rivaled by many large-scale grocery chains. The alignment of their brand and shopper experience with these values provides a platform for deep customer affinity and loyalty. If the rewards offered are personalized to the extent that shoppers feel their purchases align better to their desired lifestyle, Whole Foods will have a winning program on their hands.

3. Diverse Experiences – Unlike most grocery stores, Whole Foods offers an array of different experiences to customers that extend beyond the basic in-store shopping. Events like cooking classes, wine and beer tastings, happy hours, value-added online content, and other educational offerings provide rich and personal connection points with Whole Foods, and offer great utility to a loyalty marketer looking to build relationships with customers via the rewards program.

How exactly Whole Foods will take advantage of the above differentiators remains to be seen, but very well could determine whether their rewards pilot becomes a best-practice, or just another in the long lineage of underwhelming grocery loyalty programs.

About the Author

Author: Clay Walton-House | Customer Retention and Loyalty
Clay Walton-House helps Fortune 500 companies create and implement new customer engagement strategies that accelerate growth and build loyalty. His expertise lies in understanding consumer behavior and translating it into actionable customer insights. Clay has a proven track record of successful program design and optimization, helping uncover ways to build retention and loyalty strategies into a company’s broader business model.

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