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Friday, June 28, 2013

Are loyalty programs coming or going?

Jewel announced today that it is eliminating its loyalty card program, which was the first one in the Chicago area. The other retailers now owned by Cerebus (Albertsons, Shaws) are also dropping theirs.

Meanwhile, Walgreens just rolled out their (very confusing) loyalty program.

The most successful retailers in the grocery space currently are poles apart on this issue. Costco requires the use of a card and tracks everything. Trader Joe’s has no loyalty program. Walmart has no loyalty program, but uses various methods to track customers (e.g. register receipt surveys).

Jewel’s decision is particularly surprising because their program has been around a long time and so they should have the infrastructure already in place – or perhaps since the program has been around a long time the infrastructure is creaky, and needs capital improvements Cerebus doesn’t want to make.