Affordability.

Member-Only Events and Access & Influence foster a more VIP experience for Sprouts’ loyalty members. The former lets customers earn extra points on select products as well as offers them exclusive, limited-time savings events. The latter gives them “first dibs and sneak peeks” at new items and the ability to vote for products they want Sprouts to keep on its shelves, according to the app.

“Just the way that they’ve structured the program, it’s in some ways trying to create a community,” Amanda Lai, an associate partner at McMillanDoolittle, said in an interview. “Having members-only events, members-only recipes to create something that’s more relational, rather than just transaction dollars and cents based.”

Within the grocer’s app, Sprouts Rewards has its own dedicated page where shoppers can access account details such as their points balance, available rewards and an in-store barcode to apply rewards at checkout.

How far can a rewards program carry Sprouts? 

The real marker of the app’s success is the consumer data and insights it can collect and then implement into its offerings, sources said.

“It’s not just about getting the customer signed up, it’s… capturing enough customer shopping data to create tailored offers that will drive repeat purchase or complimentary purchases to get [shoppers] into other categories, to get them to purchase new products,” Lai said. “And that’s something that requires a bit of time to develop the baseline.”

Because Sprouts’ focus is on personalization, the grocer faces the unique challenge of tailoring offerings as attribute-specific rather than price-based, she added. This requires Sprouts’ loyalty benefits to align with individual shoppers’ lifestyles and dietary needs while also factoring in price sensitivity.

“Being able to create additional reasons to shop their stores is going to be paramount for helping more [grocers like Sprouts] carve out their space in the grocery landscape when they can’t necessarily win on having the cheapest produce,” Lai said.

Sprouts Rewards is designed to make the shopper feel closer to Sprouts, analysts noted, whether by offering a sense of exclusivity or providing the opportunity for direct feedback.

“[Grocers] have to be very careful to deliver on the promises” they make, said Ken Fenyo, managing partner at Pine Street Advisors, referring specifically to the grocer’s Access & Influence concept that lets members vote on products they want stocked.

He continued: “If you create something that’s [inviting shoppers] to help decide what’s going to be on the shelf or not on the shelf, and you don’t follow through on that, it’s actually worse than having it in the first place. And so I think you have to really make sure you’re delivering on what you promised and then continuing to innovate around it.”

Loyalty is a long-term game, especially when it comes to personalization, noted Fenyo, who worked as Kroger’s corporate vice president of loyalty and digital in the early 2000s. Regularly sending personalized offers is more impactful than one-time rewards, and while it may take several years to fully implement, this shows a customer that their grocer delivers value on a personal level.

“What the data [from loyalty programs] then allows you to do is be much smarter about where you invest in price and make sure you’re targeting the investments to the customers for whom it’s most important on the products that are most important to them,” Fenyo said.

However, this is where Sprouts hits another snag, Fenyo noted. The initial design of Sprouts Rewards shows clear long-term benefits for the specialty grocer’s frequent shoppers — but what about occasional shoppers?

Because Sprouts Rewards is a system built primarily around transferring points into dollars, occasional shoppers may be less inclined to become members because they don’t spend enough money with Sprouts to get value from the program, he said. This, in turn, could lead to Sprouts not getting a full view of its entire customer base.

“That’ll be something over the next year or two years [Sprouts will] really have to work to make sure they’re getting enough engagement across the store to make the program worthwhile,” Fenyo said.