One company is seeking to turn grocery shopping from an errand to an activity.
Food and drug retailer Albertsons Cos. (NYSE: ACI) announced on Monday an overhaul of its digital segment, unveiling three new offerings to its suite of digital services, including FreshPass, a subscription service that’s essentially Amazon Prime, exclusively for groceries. For a little under $100 a year or $12.99 a month, Albertsons customers can take advantage of free delivery on orders of $30 or more, free two-hour grocery delivery and other rewards.
Alongside FreshPass, Albertsons rolled out its free Deals & Delivery app, which will allow customers to shop, save and redeem rewards online or in-store, complete with a digital wallet and app coupon integration. The company is also premiering its Albertsons for U loyalty program, which offers perks from personalized deals to special birthday items.
“We have been working hard to revolutionize Albertsons Companies’ digital offerings and enhance all aspects of the food experience and journey,” said Chris Rupp, EVP and chief customer and digital officer. “We have been in lock-step with our customers, and today’s launch of our new Deals & Delivery app, our ‘Albertsons for U’ loyalty program and FreshPass subscription service exemplifies our commitment to innovation and customer service, meeting shoppers where they want to shop whether that be in store, curbside, or at home.”
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While all three offerings should improve Albertsons customers’ experiences, it’s the new subscription service, FreshPass, that’s particularly eye-catching. Albertsons seems to be taking a page from Amazon’s (NASDAQ: AMZN) playbook, bringing delivery-as-a-subscription to its more specialized corner of the market, and that model could help it and other specialty retailers go direct-to-consumer to keep pace with the delivery titans.
FreshPass offers a variety of subscriber-exclusive perks, including $5 monthly promotional credit through December, savings on O Organics and Open Nature products, monthly Starbucks perks, and a VIP phone line. Rewards never expire, and the company’s website touts potential user savings of nearly $400 per year.
Albertsons has been an innovative player in the grocery delivery space for a while, having inked deals with Instacart, DoorDash (NYSE: DASH) and Uber (NYSE: UBER) over the past few years. Those companies have been partnering with Albertsons’ banner stores — including Safeway, Jewel-Osco and ACME — to provide third-party grocery delivery services from participating stores. The company also ran a pilot project this year that used robots to deliver out of one of its Safeway stores.
Other companies have also started grocery subscription services to try to emulate Amazon’s success. Walmart Grocery (NYSE: WMT) launched its Delivery Unlimited program in 2019, offering free delivery and shipping for $12.95 a month or $98 a year. Target (NYSE: TGT) employs a similar model, offering a membership for same-day delivery in collaboration with Shipt.
Prime subscriptions have been a cash cow for Amazon, acting as a primary source of the delivery giant’s revenues in North America for years. By harnessing the Prime model, Albertsons and other retailers hope to meet consumers where they are and keep them coming back.
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