Last week, Kroger expanded its Boost delivery membership program across the U.S. The service went from pilot to nationwide rollout in less than a year, indicating it’s resonating with consumers at a time when retailers are looking for new ways to boost loyalty across channels.
Boost, which provides free delivery at two annual subscription levels in addition to perks like bonus fuel savings, is also a way to drive shoppers toward the proprietary, warehouse-fueled delivery network Kroger is building out across the U.S.
The Cincinnati-based company isn’t the first major grocery chain to roll out an e-commerce-focused membership program. Last summer, Albertsons introduced its FreshPass program, which offers free delivery along with extra perks like a monthly Starbucks reward.
Together, these two programs signal an opportunity for grocers to leverage the membership model that has been so successful for companies like Amazon. Both grocers are adding their membership options onto their existing loyalty programs, Kroger Plus and Albertsons for U.
But Kroger and Albertsons will have to compete with companies like Walmart and Amazon that heavily promote their own membership programs, along with e-commerce providers like Instacart and DoorDash that also offer annual subscriptions.
As Kroger and Albertsons continue to deepen customer loyalty and evolve their e-commerce operations, here’s a closer look at their delivery membership programs.
How much does it cost? $59 for free next-day delivery, or $99 for free delivery within two hours
What’s the order minimum? $35
Who can use it? Shoppers at most Kroger-owned stores across the U.S. who use the grocer’s app or platform to place orders.
Who can’t use it? Food 4 Less and Ruler Foods customers currently aren’t able to use Boost. The membership also does not apply to Kroger Delivery Now orders or to orders made through separate Kroger services like Vitacost, Kroger Ship and Home Chef, according to the service’s FAQ page.
What extra perks does it offer? Double fuel points and savings offers on Kroger brands like Murray’s Cheese, Vitacost and Home Chef along with private label product discounts.
What about third-party companies like DoorDash and Instacart? Instacart provides order delivery along with Kroger Delivery, the grocer’s proprietary service, where available. Boost benefits don’t apply to orders placed through Instacart’s or Shipt’s platform.
When Kroger announced in November its plan to test Boost in four markets, an e-commerce executive noted that the program would serve as an “accelerant” to the company’s evolving online ecosystem.
Over the course of several months, the program, which has a two-tier approach that’s unique among retailer memberships, increased delivery sales and customer retention, leading Kroger to swiftly move from pilot phase to nationwide rollout
“This next generation loyalty program is deepening our relationships with customers as they continue to look for value and convenience,” CEO Rodney McMullen said during Kroger’s first quarter earnings call last month.
Kroger Boost currently incorporates delivery through both Instacart and Kroger Delivery. But the membership program seems engineered to work in tandem with the latter, its proprietary service fueled by Ocado warehouses. That service is currently running in places like Ohio, Florida and Georgia, and is set to expand to regions across the U.S. over the next few years.
This isn’t the first delivery membership Kroger has offered, with the grocer having previously tested a “Delivery Savings Pass” that carried a $79 annual fee. But Boost is the e-commerce loyalty program the company is putting all its weight behind as it looks to reach more than $20 billion in e-commerce sales by the end of next year.
How much does it cost? $99 a year or $12.99 per month for free unlimited delivery
What’s the order minimum? $30
Who can use it? Shoppers at Albertsons stores, and at banners like Safeway and Jewel-Osco, who order through the company’s platforms.
Who can’t use it? Unclear at this time.
What extra perks does it offer? $5 monthly credit, monthly Starbucks savings promotion, $5 off O Organics and Open Nature products, double rewards points on exclusive brands, dedicated customer service line, among others.
What about third-party companies like DoorDash and Instacart? As with Kroger Boost, Albertsons FreshPass does not apply to orders placed through third-party platforms.
Launched last August as part of a broad digital upgrade that also included a revamped loyalty program, FreshPass offers free delivery at a price point that’s competitive with other membership programs, including Kroger Boost.
And similar to Boost, FreshPass is trying to entice shoppers with an array of extra perks that feed its broader shopping ecosystem. This includes discounts on its private label products and a monthly store credit. Throughout the summer, Albertsons is offering additional weekly 10-cent savings per gallon on fuel for FreshPass members.
But Albertsons’ strategic goals for FreshPass may differ from those Kroger is pursuing. While Kroger is expanding its company-run delivery program, Albertsons has scaled back its owned delivery service and increased its reliance on third-party companies like DoorDash, Uber and Instacart. Albertsons is also pulling numerous other levers to enhance its online experience, including introducing livestreaming, automated ordering and consumer reviews.