Loblaw rolls out Amazon Prime-style loyalty program for $99 a year

Loblaw rolls out Amazon Prime-style loyalty program for $99 a year
Loblaw Companies Ltd. is launching its new loyalty program across Canada, offering an assortment of perks for $99 a year in an attempt to convince more customers to shop exclusively with its massive grocery chain — creating what one senior executive called a “loyalty loop.”

The PC Insiders program, styled after the popular Amazon Prime (minus the streaming service), includes free “click and collect” grocery shopping, where customers order online and pickup at one of 600 designated locations, as well as free shipping on purchases from Loblaw’s Joe Fresh apparel brand and Shoppers Drug Mart.

The program — available at $9.99 a month or $99 a year — is now available to the 16 million members who currently use PC Optimum, its free rewards program.

“It’s not 16 million customers all at once,” said PC Financial President Barry Columb, who started PC Insiders and continues to oversee the program. “But if we go out in the next six months and we put 100,000 customers into the program, we would be very, very satisfied.”

The announcement Thursday comes after a year-long pilot ballooned to the point that Loblaw had to turn members away. When the pilot started last year, the plan was to open the program up to 5,000 hyper-loyal customers who already used Loblaws PC Optimum and the President’s Choice Financial Mastercard.

Instead, Loblaw added 25,000 members after media attention and word-of-mouth saw prospective members signing onto a waitlist by the thousands. Even after expanding to 25,000 members, 3,000 people were still on the waitlist.

“There’s always a moment when you think it’s not going to work,” Columb said. “That moment is always before launch.”

“But when you actually roll it out, and your expectation is to get 5,000 users on a pilot and you get 25,000 … you realize you’ve got something good here.”

The pilot saw members take to Loblaw’s new grocery pickup service, Columb said, with an average member using it 10-15 times during the year.

Along with free shipping and grocery pickup, PC Insiders members get 20 per cent back in reward points when they buy baby products and Loblaw store brands like PC Organics and Black Label, as well as online purchases on Joe Fresh clothes and Shoppers luxury beauty products.

The incentive on baby products seems strategic, said Stewart Samuel, program director at IGD Canada, since having children is often a “key tipping point” toward online grocery shopping.

Samuel called the grocer’s paid program a “first-to-market initiative in Canada.”

“It’s a great way to limit the amount of cross-shopping that customers may do in other retailers,” he said.

The program also comes with $99 travel credit at the Loblaw travel service and “a surprise home-delivered box” of PC products.

“I mean, that alone pays for your annual fee,” Columb said.

PC Insiders is the latest in a series of shakeups to Loblaws’ loyalty programs. Its current free rewards program, PC Optimum, was itself born earlier this year when Loblaw merged its PC Plus card with Shoppers Optimum.

But Columb denied that all the changes could confuse customers, pointing to the thousands who were quick to join the Insiders pilot program. In the year of testing, he said he saw a need to better show plan members how much they were apparently saving. Members now have access to an improved online dashboard that gives daily updates, as well as updates on their receipts in-store.

“It’s all about creating that loyalty loop,” Columb said, “and driving customers back into the store, where they find value and convenience.”

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