Dive Brief:

• Kroger hopes to increase customer loyalty by using rewards cards to drive donations to local charities.
• Under a program the grocer is rolling out nationally, Kroger customers will link their rewards card to a local charity. Every dollar spent becomes a "vote" for how Kroger should donate to charity. At the end of the year, Kroger will pay out $50 million in proportion to those votes.
• The program is similar to one run by Safeway since 1999. But Safeway's system is tied solely to education giving. Kroger's Community Rewards program is open to any local charity.

Dive Insight:

We love this idea for lots of reasons, including that it could bring needed attention to local charities. But at least part of our love for this concept is based solely in commercial considerations. It seems certain that letting shoppers "vote" with every dollar they spend will foster a boost in dollars spent at Kroger by people tied to a particular charity. In fact, the top five groups to benefit in an early version of the program run in the Cincinnati area were all local schools. No doubt that's because lots of parents decided to spend the food budget at Kroger because it would pay dividends to the kids' school.

Another thing worth noting -- the Community Rewards program seems perfect for brands that want to participate. We can easily imagine a system in which, say, every dollar spent on a particular brand of yogurt or cereal leads to that product's manufacturer matching Kroger's donation to the local charity.