Winn-Dixie's Reward Lures Loyal Shoppers with Fuel Perks
Discounts on gasoline as rewards is not a new concept, especially since the price of a gallon of fuel began to double back in 2008. But the reward does have to make sense, fit with the brand and be executed in a way that ensures success. The case of Winn-Dixie, which first offered gas rewards in 2008 as an added value to its standard loyalty card program, is a lesson in how to do it right.
Winn-Dixie first launched its loyalty card program in 2007 to reward its core set of loyal, high-value customers. In 2008, the company wanted to add value to the program, and with the price of gasoline soaring and a close look at a similar program run by a competitor, it added “Fuel Perks.” Every $50 spent generates a 5-cent per gallon discount, up to 20 gallons.
“The program was really a derivative of our core loyalty program that rewards the core set of shoppers driving significant business for us and the addition of Fuel Perks does just that,” Anthony Agresta, Winn-Dixie’s director of brand management, said. “We see it as a value equation, we don’t necessary want to be a price store.”
Fuel Perks first launched in Panama City and Winn-Dixie watched as both store trips and basket rings increased. That success prompted an expansion of the program in 2009 to major markets from South Georgia to Jacksonville, FL, where 500,000 cards have been issued. It was then on to Louisiana and, most recently, another 62 Winn-Dixie stores in Central Florida, including Orlando and Daytona, bringing the total number of participating stores to 380. Winn-Dixie has had 1.3 million sign-ups in since the launch that are now part of its more than 2.5 million Customer Reward Card members.
One year after the initial launch, manufacturers like Kraft, Dole, General Mills and other consumer packaged goods companies wanted in. That meant that in addition to the total basket ring going toward gas rewards, shoppers who purchased “Bonus Rewards” items would earn another 5-cent deduction on the price of gas. For example, for every bag of Dole pre-cut vegetables or two boxes of General Mills cereals, customers save an addition 5-cents per gallon with no limits. Adding value to these programs may never be more important. A study of shopper behavior by Catalina Marketing discovered that the average CPG brand saw 46% of its most loyal shoppers fall away in the last year.
Dozens of such items are offered each week that when purchased spark an addition 5 to 10-cents off a gallon of gas. The Fuel Perks items are themed-weekly and promoted in the Winn-Dixie circular and at its website on the Fuel Perks tab. Often times they also appear on end caps throughout the stores and are marked at shelf by signage.
“We’re focused on retaining our core shoppers, but something like gas, which is analogous to grocery shopping because its something most people do every week, has attracted many new shoppers,” Agresta said.
Marketing, by both Winn-Dixie and its Fuel Perks partner, Shell, has played a huge role in both awareness of, and enrollment in, the program. The partnership is part of the grocer’s ongoing relationship with Excentus Corp., a retail marketing coalition specializing in fuel-based reward programs.
Shell has made the program a central component in its marketing in areas where the program launches.
At Shell stations, Fuel Perks is heavily branded in stores, on digital readers at the pump and on pump toppers and window signs. When a launch takes place in a new market, Shell includes the program in its TV spots, on radio and outdoor billboards and in some direct mail. And customers coming into the stores can’t miss the Fuel Perks T-shirts worn by employees.
“They have really come to the table to help us cross promote the program,” Agresta said.
In Winn-Dixie stores a robust signage program alerts customers to Fuel Perks, as do kiosks for customers to learn about the program and sign up. The marketing plan also includes direct-response TV and radio spots that drive people to the Fuel Perks website.
And at the site, a straightforward, organized portal makes it easy for any visitor to figure out how the program works, including a video that offers step-by-step instructions to join. Here, people can also check their Fuel Perks' balances.
“When we launch in market we use DRTV and we can see sign spikes on the site so we know we are capturing new customers, Agresta said.
So what’s next?
“We’re still in expansion mode getting the program into all of our stores,” “We are looking at various ways to add more value to Fuel Perks to increase that value.”