Loblaw Companies Ltd. is launching its new loyalty program in Canada, offering a variety of benefits for $ 99 a year, in an attempt to persuade more customers to exclusively purchase their huge supermarket chain – creating what a senior executive called Loyalty loop.
The PC Insiders program, created after the popular Amazon Prime (except the streaming service), includes free click and collect grocery shopping, where customers place orders online at one of 600 designated locations, as well as free Loblaw. Joe Fresh Clothing Brand and Drug Mart Shoppers.
The program – available at $ 9.99 per month or $ 99 per year – is now available to the 16 million members who currently use PC Optimum, their free rewards program.
"There are not 16 million customers at once," said PC Financial president Barry Columb, who founded PC Insiders and continues to oversee the program. "But if we leave in the next six months and we put 100,000 clients into the program, we will be very, very satisfied."
Thursday's announcement comes after a year-long pilot exploded to the point that Loblaw had to push the members away. When the pilot started last year, the plan was to open the program for up to 5,000 hyper-loyal customers who have already used the Loblaws PC Optimum and the President's Choice Financial Mastercard.
Instead, Loblaw added 25,000 members after media attention and word of mouth saw thousands of potential members signing up for a waiting list. Even after expanding to 25,000 members, 3,000 people were still on the waiting list.
"There's always a time when you think it will not work," Columb said. "This moment is always before the launch."
"But when you actually do this, and your expectation is to get 5,000 users on a pilot and get 25,000 … you realize there's something good here."
The pilot saw the members go to Loblaw's new grocery collection service, Columb said, with an average member wearing 10 to 15 times a year.
Along with free shipping and grocery shopping, PC Insiders members earn a 20% return on reward points when they buy baby products and Loblaw store brands such as PC Organics and Black Label, as well as online shopping on Joe Fresh clothing and luxury beauty products Shoppers.
Encouraging baby products seems strategic, said Stewart Samuel, program director at IGD Canada, as having children is often a "turning point" for online shopping.
Samuel called the paid grocery program a "first market initiative in Canada."
"It's a great way to limit the amount of cross-purchases that customers can make at other retailers," he said.
The program also comes with $ 99 travel credit on Loblaw's travel service and "a surprise box for home delivery" of PC products.
"I mean, this only pays your annual fee," Columb said.
PC Insiders is the latest in a series of changes to Loblaws' loyalty programs. His current free rewards program, PC Optimum, was born earlier this year when Loblaw merged his PC Plus card with Shoppers Optimum.
But Columb denied that any changes could confuse customers, pointing to the thousands who rushed to participate in the Insiders pilot program. In the test year, he said he needed to show plan members how much they were apparently saving money. Members now have access to an enhanced online dashboard that provides daily updates as well as updates to their in-store receipts.
"It's all about creating this loop of loyalty," Columb said, "and getting customers back to the store where they find value and convenience."