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Since its highly publicized breakup with Kroger in December, Albertsons has been on a journey to prove that it’s just fine on its own.
The grocer has managed to get its “mojo” back, per former CEO Vivek Sankaran, in part by doubling down on its digital business to help it compete with giants like Walmart and Costco. Albertsons’ digital sales rose 24% YoY in Q4, the company reported in April, while its loyalty members jumped 15% to 45.6 million.
Digital sales have proven to be crucial to grocery industry growth over the past year. E-grocery sales surged during the Covid-19 pandemic, then cooled between 2021 and mid-2024 as shoppers returned to IRL shopping. But sales have picked back up again in the past year as retailers double down on promotions for their pickup and delivery services. Sales jumped 27% YoY to $8.7 billion in May, according to Brick Meets Click.
Albertsons launched its first-party digital experiences through its app just four years ago, and has been working to catch up to its competitors since then, Jill Pavlovich, SVP of digital shopping experiences at Albertsons, who oversees the grocer’s app, website, and in-store digital offerings, told Retail Brew.
“As we think about this year, the path that we have ahead of us, it’s really taking what we’ve developed a step farther and really bringing the digital experiences more deeply into stores,” she said.
Digital native: Four platforms—e-commerce, loyalty, pharmacy and health, and its mobile app—have been key to its blossoming digital business, Sankaran said in January.
Albertsons’s mobile app has served as a “Swiss Army knife of tools” to help shoppers, Pavlovich said, adding that last year was centered around “strengthen[ing] the core” and focusing on the “basics,” with updates that included in-store geolocation with real-time coupons. It’s also recently added a capability for consumers to upload their own recipes or recipes they’ve found online into the app and, using generative AI, digitize them, making the recipes shoppable across Albertsons’s offerings.
“This year is all about taking the things that reduce the cognitive load and taking them a step farther, leveraging the rate at which technology is changing to really give our customers a human multiplier—make it super easy for them to shop with us,” she said.
Daily monitoring of call service logs, checking reviews in the App Store and Google Play Store, and connecting with customers (and non-customers) directly to get their feedback helps the retailer establish both its annual digital product roadmap as well as make any real time adjustments necessary, Pavlovich said.
That continual iteration is necessary as more tech-savvy, younger consumers opt for online shopping for themselves and their early-stage families for the first time, she noted.
“Their expectation of technology is omnichannel experiences, so they have a lot less barriers to entry to engage digitally and convert online,” she said. “If we continue to keep up with our customer and meet their needs through our digital and omnichannel experiences, we’ll see that growth continue for Albertsons and also for the industry as well.”
As Albertsons takes on online grocery leaders like Walmart and Amazon, Pavlovich said its loyalty program (which it streamlined last year) and its “differentiated services” including special occasion planning offerings like catering and party supplies, will help it compete. This year, the grocer aims to add digital ordering capabilities for in-store services like its bakery and floral department, she noted.
Sharp as a tech: Albertsons also announced at Cannes Lions this year that it’s piloting in-store digital ad displays as it looks to grow the reach of its retail media network Albertsons Media Collective. The pilot is in its early days, but Pavlovich said “initial feedback is positive” as the grocer aims to use ads to boost discovery and brand awareness for shoppers.
“It’s not just an ad to be an ad; it really has to aid in the customer shopping journey and purchasing decision,” she said.
Pavlovich is hopeful that customers will be receptive to digital in-store screens, though she noted the grocer has had “varying successes” with other innovations. The in-store mode for its app has been a bright spot, quickly adopted by 10 million customers, Pavlovich said. However, checkout options similar to Amazon’s Just Walk Out technology, which the grocer previously piloted, hasn’t been so well-received.
"It’s been very experience-dependent, and we just continue to watch and keep a pulse, because the trends continue to emerge, and we’re learning of adoption in other industries or from other retailers,” she said. “We want to make sure that we keep up and we try again.”