In any loyalty program, simplicity is crucial to customer adoption.
Chevron and the Vons division of Safeway Inc. have partnered to offer a joint Reward Points loyalty program. Customers who earn gas rewards by shopping with their VonsClub Card at Vons stores or a ValuePlus Card at Pavilions stores now can spend their rewards of up to 20 cents off per gallon at participating Chevron and Texaco branded locations in Southern and Central California.
The program began rolling out Oct. 8, with the first station going live in San Diego, and continued to roll north. Some 1,000 pilot stores are now featuring the program.
Chevron and Texaco stores in the network area have the option to opt in, and Chevron has seen near complete participation in the program.
“It’s a win, win opportunity between Chevron, Safeway and consumers who will be able to do their grocery shopping and gain rewards. For every dollar they spend, they get one point, and 100 points equates into a 10 cent discount per gallon, and they can stack those to a maximum of 20 cents per gallon,” Mike Vomund, general manager of retail west for Chevron told CSD.
Simplicity Is Key
Vomund pointed out that in any loyalty program, simplicity is crucial to customer adoption. Chevron and Safeway ensured that their program was straightforward and uncomplicated for customers from sign up to points redemption.
In fact, most customers won’t need to do anything at all to join. Vons card members are automatically signed up, and just need to head to their nearest Chevron or Texaco site to redeem points. “The majority of Vons and Safeway shoppers are already club card members, so they’re already enrolled. Anyone who is not a Vons card member can join online or in the store through the Vons program,” Vomund said.
Redeeming points is also easy. Customers just swipe their card or enter their phone number at the pump and watch the price roll back either 10 or 20 cents a gallon, depending on how many discounts they’ve accumulated. “It’s a simple, easy to understand program that we believe is going to gain incredible traction in our launch area,” said Vomund.
There are some small restrictions. At Vons, purchases eligible for reward points exclude beer, wine, spirits, tobacco, U.S. postage stamps, gas purchases and services, lottery tickets, gift certificates, and all fluid items in the refrigerated dairy section (including fluid dairy and dairy substitutes), among a few others.
There are also some added bonuses. For example, customers who shop for gift cards at Vons get two points for every $1 they spend, compared to one point per $1 on most items.
The Perfect Partnership
An ideal overlap in market areas and brand affiliation were the two key drivers in inspiring Safeway and Chevron to partner on loyalty. “We both are looking at ways to drive our sales. Loyalty programs are in demand right now. Safeway and Chevron are two strong brands on the West Coast, and we see the opportunity to give the consumers what they want, which is to earn points and burn them on something they see as extremely valuable, which in this case is discounted gasoline. So there’s a natural drawing together given both of our quality brand initiatives on the West Coast.”
Such loyalty partnerships between gas stations and grocery or other retail stores have been growing in popularity over the past year. Casey’s announced this week it is partnering with Hy-Vee. Kroger and Shell were among the first of such partnerships to hit the industry. BP has announced a pilot program with Kmart, and Cenex has an exclusive partnership with Cabela’s.
Vomund noted the increase in partnerships between gas stations and grocery/retail stores across the U.S. is consumer driven. “The consumer has spoken, and they like being able to get rewards and points—be it for groceries or airlines. And they want to redeem these points for something they see value in. These programs where they can redeem points for fuel—that’s something that will drive consumer behavior. In this case, it will result in a lift for Vons and a lift for Chevron, and the consumer is happy because they can now save 10-20 cents a gallon on a product they are purchasing on a regular basis.”
“We’re ecstatic about partnering with Safeway,” Vomund said. “We have the right brand connection as well as the work we’ve done with preparing to execute this program exceptionally well, and that is going to make for a great consumer experience. When you add together the brand connections, the simplicity of the system and program and 20 cents off a gallon—that’s going to resonate with the consumer.”
He added, “We are confident this program will be successful and hope to leverage its success to expand the program to additional markets in the west in the near future.”