Loblaw's loyalty program aims for the smartphone age

Loblaw officials yesterday unveiled the grocery chain’s long-awaited loyalty program, PC Plus.

At its heart is a phone app, backed by algorithms, that understands what people buy, based on previous purchase behaviour, and sends them weekly promotional offers for these types of products.

People enrolled in the loyalty program accumulate points that can be redeemed for money off their grocery bill.

Uwe Stueckmann, Loblaw’s vice-president of marketing, described PC Plus as true one-to-one marketing. The more shoppers use the program, the more personalized the offers become.

“Doing the same thing for all customers doesn’t make sense anymore,” he said.

“We designed our program for the smartphone. The smartphone is that much more intelligent than a plastic card,” he explained during a press conference at a Loblaws in Toronto.

Peter Lewis, Loblaw’s senior director of customer analytics and loyalty, said the program delivers about eight to 10 product to customers each week.

What’s more, he added, the system is able to perform “time to event modeling,” which means it can figure out when customers might need to stock up on certain items.

If someone buys Tide laundry detergent every 12 weeks, Lewis said, that person might be delivered an offer on Tide detergent shortly before she would normally purchase Tide.

In addition to individual product promotions, offers are based on departments and shopping frequency. A customer might be told she'll get additional reward points if she spends $20 in the meat department this week, he said. Or she can get extra points by shopping at her local Loblaws store five times in the month of May.

Loblaw officials stressed that product offers would not be on items that Loblaw’s or its vendors hope to sell but rather on products that the system had determined each customer wanted, based on past purchase behaviour.

“If you buy Coke all the time, you’re not going to be sent an offer on Pepsi,” Kathy Buckworth, chief family advisor for PC Financial and PC Points, said.

Buckworth said customers might also be sent what she called “stretch offers,” which are promotions on products that shoppers have shown they might be interested in.

She gave an example from her own PC Plus account. Among the offers sent to her last week was one to accumulate extra PC points if she bought Greek yogurt. “I don’t buy Greek yogurt now, but I do buy a lot of other yogurt,” she said.

Loblaw spent two and a half years developing PC Plus, which incorporates points from the supermarket chain’s longstanding PC Financial credit card rewards program.

Shoppers who already have the credit card can register for the new program and keep collecting points. Or they can simply sign up for a plastic loyalty card.

But Loblaw officials anticipate many users will prefer the smartphone app. It lets customers perform tasks such as make shopping lists, browse flyers and link recipes to shopping lists on the go.

“We’re doing more than giving people rewards,” Stueckmann said.

An integrated shopping list allows customers to make their own list and add foods to that it from Loblaws flyers or recipes, which are also sent to them weekly.

Shoppers would be able to keep track of their points and the dollar amount those points are worth on the app. One thousand points equals one dollar.

They could also compile shopping lists by department and customize the list so that the department they prefer to shop in first (produce, for example), appears at the top of the list.

Grocery chains across Canada, and North America, have been sharpening their loyalty programs in recent years in an effort to retain their market share and steal share from others.

Stueckmann said that the PC Plus app was based on three customer insights: that people are busy and want grocery shopping to be more convenient; that many are disappointed with current loyalty programs on the market; and that most people are now connected with smartphones.

Loblaw thinks it can boost share of wallet with the app, which is available for iPhone, BlackBerry 10 and Android smartphones.

For shoppers who do not own one of these devices, the program available in card form. Both the card and the app are free.

Other grocery-industry loyalty programs on the market include the Metro & Moi program in Quebec, Safeway’s Just for U program, Club Sobeys, Shoppers Drug Mart’s Optimum and the ubiquitous Air Miles.

PC Plus is only available at the moment in some 44 Loblaws bannered stores in Ontario. It will be rolled out across the country later this year, Stueckmann said.

Loblaw is marketing the new loyalty program through in-store signage, radio ads, flyers, billboards, and with upcoming live radio remote broadcasts from some stores.

A website, PCplus.ca, went live Friday. Meanwhile, at Loblaws stores, PC Plus ambassadors were on hand to introduce the program to customers and help them sign up right away.

Customers who downloaded the app Friday were greeted with a bright image of various red fruit on their phone’s screen and the claim: “Rewards made fresh for you.”

The app includes a mobile PC points card that can be shown at checkout to earn points. The app keeps track of how many points consumers have collected as well as the dollar value.

In addition to promotional offers, users would be sent weekly recipe ideas–the ingredients of which would skew toward items previously purchased by the customer or which are on sale that week. If a customer wants to try one particular dinner recipe, she can add the ingredients for that recipe to her shopping list by simply pressing a button on her smartphone.

To show the intelligence of the PC Plus App, Buckworth pointed out the system is smart enough not to transfer everday ingredients that the customer probably already has in her pantry. Like salt.