Scheduled for a trial run this summer, the loyalty program of the specialty grocer will function on a points-based model, providing enhanced understanding of shopper habits.
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GLOSprouts Farmers Market intends to leverage its forthcoming loyalty program to significantly increase its collection of firsthand data about its customers, allowing the company to enhance its services tailored to them, as highlighted by Sprouts executives during a panel at the annual Roth Conference on Tuesday.
The executives emphasized that the loyalty program will operate on a points-based structure, enabling continuous access to valuable insights about its customer base. The specialty grocer plans to pilot the loyalty program at two locations this summer, with a full rollout slated for next year.
CEO Jack Sinclair described the loyalty program as an “investment in the future,” emphasizing its role in bolstering the acquisition of firsthand information. By augmenting its data collection efforts, Sprouts aims to optimize its promotional strategies and deliver pertinent information and advertisements to consumers. The company also seeks to increase shopper visits and foster long-term customer retention.
Sinclair noted the importance of avoiding missteps such as promoting grass-fed beef to vegetarian customers, underscoring the need for more targeted approaches facilitated by robust consumer data.
Currently, Sprouts manually gathers firsthand data for only 11% of its shoppers, according to Sinclair, a stark contrast to the practice of most U.S. grocery companies, which capture data on over 80% of their customer base.
CFO Curtis Valentine outlined Sprouts’ ambitions to expand its data collection efforts to encompass a larger portion of its customer base, aiming to reach between 11% and 80% of customers in the coming years post the launch of the loyalty program.
The loyalty program will undergo testing in two markets in the second quarter before expanding to additional markets ahead of the full launch.
Sprouts has implemented various strategic changes in recent years to refine its operations and distinguish its stores in a competitive market landscape. These changes include downsizing store formats, amplifying private label offerings, and introducing more emerging brands. Sinclair believes the new loyalty program will further set Sprouts apart by fostering deeper connections with its loyal customer base. He emphasized that the program will be unique, focusing not on traditional perks like fuel rewards, but rather on nurturing the existing community of Sprouts enthusiasts and encouraging increased engagement and visits.
