Will Kroger’s Paid Membership Program Set a New Standard?

Kroger recently introduced its new loyalty membership program via Twitter with: “Welcome to Boost—More savings. More benefits. A new level of membership. We know customers are increasingly looking for more convenient ways to feed their families while also saving time and money. We’re thrilled to launch Boost by Kroger Plus to help families do just that.”

Further details on the tiered program—which gives customers that sign up for a $59 annual membership, enhanced gas points and free delivery within 24 hours, and shoppers who pay $99 per year, gas points and free delivery in as little as two hours—were revealed in a story from the Cincinnati Enquirer, also Tweeted by the Cincinnati, Ohio-based Kroger.

While the promise of speedy delivery may entice some shoppers to spring for the higher price point membership model, both programs provide better fuel points which is important, as 41% of consumers said that they would be willing to pay for gas perks, according to a 2020 study by Clarus Commerce, notes Tom Caporaso, CEO of Clarus Commerce, a loyalty provider.

“The Kroger Boost program pilot has great timing, especially as gas prices continue to soar to high levels,” says Caporaso. “Not to mention, droves of shoppers have already turned to e-commerce programs like Walmart to get their groceries delivered, so Kroger’s new program will help the brand stay on par with competing options. However, Kroger is implementing a cart minimum fee of $35 for grocery delivery, a similar rule that Walmart ended up dropping to attract more daily users. This might be something that Kroger changes, depending on the results of the pilot.”

The pilot will run in Greater Cincinnati as well as stores throughout Atlanta, Columbus and Indianapolis regions, according to the Cincinnati Enquirer.

But the real industry game changer may be Kroger’s unprecedented two-tier pricing, continues Caporaso.

“The other interesting component of the Boost program is that Kroger is offering two different price tiers that provide different award amounts,” he says. “This seems to be an unprecedented choice, as most brands either offer a traditionally free loyalty program or one price tagged premium option, like Walmart , Amazon Prime or Best Buy Total Tech. However, Kroger’s multi-level membership program could set a new trend, offering ranging price points that can better meet family needs or monthly budgets.”

In an effort to offset the first-year cost of membership, reports the Enquirer, new customers at either price point receive a one-time welcome kit worth over $100, featuring offers from Home Chef, Murray’s Cheese, Vitacost and Kroger’s store brands.