How Data-Driven Loyalty Programs Help Independent Grocers Compete

00:04 – Anthony Presley:
If you wouldn’t mind introducing yourself a little bit.

00:06 – Eran Harel:
Of course. Eran Harel, AppCard, Senior Vice President of Corporate Development and Partnerships. Excited to be here at ROFDA.

00:16 – Anthony Presley:
Well, we’re excited that you’re here hanging out with us. Always good to see you. I think I last saw you in person maybe at the…

00:23 – Eran Harel:
Correct. At the last ROFDA. Yeah, yeah. From ROFDA to ROFDA.

00:26 – Anthony Presley:
That’s right. That’s exactly right. And maybe the next show will probably be NGA or NRF or…

00:32 – Eran Harel:
Most likely. Yeah, yeah. As long as we have good reasons to celebrate.

00:36 – Anthony Presley:
That’s right. That’s exactly what it is. So for anybody that’s not familiar with AppCard, why don’t you tell us a little bit about what AppCard does?

00:42 – Eran Harel:
Yeah. We are a personalized marketing shop, analytics, and digital coupons platform. Some may know us as a loyalty provider, but in a way, we don’t believe in loyalty. And the reason for which is that a shopper that enrolls into our program is not necessarily a loyal customer. Only if you are building relationships that entice behavior and results with the shopper’s increase of recency, frequency, and monetary spend—and doing it with the right offer at the right touchpoint, derived not only from past purchase but future intent, AI, and machine learning—then and only then you can earn the customer loyalty. And that’s the reason why at heart, we are a data company that helps independents make proper use of the data.

01:30 – Anthony Presley:
I like that. That’s a twist on the term and a repositioning. I like that because it seems like at least in this day and age, somebody who says that they have a loyal shopper—it doesn’t take very long to burn the bridge with a loyal shopper.

01:46 – Eran Harel:
Oh, undoubtedly. It’s all about relationships.

01:48 – Anthony Presley:
So tell us a little bit about the history of the company. It’s been around for a while.

01:54 – Eran Harel:
Yeah, indeed. Thirteen years. We started—Yair Goldfinger and Amichai Oren, to whom I joined in the idea stage. And the whole idea and the whole premise was exactly what I said. We wholeheartedly believe in helping the independents compete. Whether we started outside of grocery—and we still have thousands of non-grocery stores—somewhere around 2017 we decided to focus on grocery, acquired Pelogics and others, and continued on growing. Offices here in Florida…

02:27 – Anthony Presley:
Okay.

02:29 – Eran Harel:
…and headquartered in Manhattan, New York, and some offices in Israel, but really having employees and team members across the country.

02:39 – Anthony Presley:
Wow. Okay. And so it’s been a big growth over the last couple of years. Did you see a large adoption through COVID?

02:47 – Eran Harel:
By all means. COVID changed shopper interaction, but not less than that, grocers’ interaction and understanding the importance of communicating with their shoppers, understanding the need to really touch shoppers with things that, by the end of the day, put emphasis that one appreciates a shopper’s business. But as you guys are in the business of not only taking care of the grocers or the retailers but taking care of their employees, then this is true across the board. It is true not only for shoppers, it is true for the employees—making sure that we offer the right employee discount and others in order to help them retain. Because the past couple of years were not only difficult for the grocers logistically but also in terms of retaining their workforce. So it’s all about communication.

03:45 – Eran Harel:
Yes, the last couple of years were very, very challenging in terms of growth. We grew very fast. I had about 600 net new stores this year alone. It’s how to build the organs, how to continue maintaining the growth, and making sure that the emphasis is offering a great experience and service.

04:08 – Anthony Presley:
Yeah, I was speaking with Steve Black earlier today, and we were talking about the foundational level of trust that grocers have to have with their employees, and they have to have trust with their customers. And the customers have to trust that their grocery store, where they shop, cares about them. Because if they don’t care about them, then there’s really no real attachment to that place. And now we’re just shopping on price.

04:33 – Eran Harel:
Yep, 100%. And this is more so than anything else to the independents. Unlike the Walmarts, the Krogers, the Albertsons—which are doing a great job for themselves—the independents are the center of their community.

04:49 – Anthony Presley:
Right, right.

04:50 – Eran Harel:
Some even would be servicing a food desert that won’t have anything but the independent. So making sure that relationship is not something that is taken for granted—it’s something that for us is super important in helping really solidify that relationship.

05:11 – Anthony Presley:
So we’ve heard a lot as we’ve been here at this conference from both wholesalers, other vendors that presented. FMI presented, FMS presented, Greg from NGA presented—a lot of interesting statistics. And then some of the retailers we’ve spoken to one-on-one. I’m curious, you’ve got customers that run the gamut, right? Thousands of locations that are both novice and just getting into using your platform and trying to understand the data and how their customers behave. And then you’ve got others that are incredibly sophisticated. I’m curious, for those that are very sophisticated, what are they doing that’s unique? What would be something that they’re doing that’s different that others are not?

05:55 – Eran Harel:
I think the first thing that they do is that they understand the importance of making that data actionable—whether it is for operational purposes, better logistics, better employee engagement, better staffing, better filling their aisles—but also in terms of making sure that they engage with their shoppers. In our industry today, it’s all about you either grow or you disappear. There’s no in-between. And as a result of that, you see a lot of consolidations—whether it is for improving operational excellence or reducing costs. But what we see from the larger, more advanced grocers—some of which are smaller but still very advanced—is that they are not afraid of trying. Marketing is trial and error.

06:54 – Eran Harel:
When you put data into it, it eliminates a lot of the risk, but it is trial and error. And the one thing that I am 100% seeing is that they are just not afraid—whether it is new tactics, whether it is changing tactics, understanding and having proper planning. So they have their calendar and they have the monthly and the quarterly, and they review it, and they act against it. They see what’s working and what’s not. In terms of communication with the shoppers—doing more text, doing more email, making sure that it’s really relevant. This is one side. On the other side, they are not being overly blinded by buzzwords—they’re staying very focused.

07:41 – Anthony Presley:
You’re probably the fourth or fifth person I’ve talked to that’s talked about the skillset needed and the data and the need to pivot—to look at an A/B test or be able to do the marketing and try new things—and that those are really the folks that are innovating. And that the grocers who are going, “Well, that’s how I did it last week, last year, ten years ago, that’s how my dad did it,” probably are struggling a little bit, right?

08:12 – Eran Harel:
Exactly. But that’s the kind of grocers we see it as a mission to help. A quarter of the AppCard team is what we call our Success Management Team. This group does not have a P&L. They are solely measured by program penetration, the promotions that the grocer runs, the coupon clip/redeem ratios—things of that nature. Meaning they are there to help exactly the grocers that you just mentioned—third, fourth, fifth generation—who are afraid of change because they’re afraid of being the one who took the wrong direction for the family business. We help them. We offer that white glove support to help them transition and become better grocers.

09:05 – Eran Harel:
I’ll give you an example—whether it is promotions, a points-based program, a rewards catalog, bringing in the vendors—or just making data actionable for day-to-day decisions. I had a grocer who came to our office the other day. We simply asked, “Do you know who your best cashier is?” He said, “Yeah, it’s so-and-so.” We said, “Okay, let’s go into the dashboard.” The data is there—accessible in real-time. We went in, and he said, “No, can’t be.” I asked why, and he said, “That’s not her. She’s actually second or third.” I said, “So who’s number one?”

09:46 – Eran Harel:
And it turned out to be a part-timer. Guess what? The week after, she became a full-time employee. These kinds of things—taking the concept of “I know what’s happening” and reaffirming it with the data to make the right decisions—that’s what we want to teach. That’s how we help them grow. Those grocers you mentioned suffer more from lack of time—someone doesn’t show up, the truck is late—their life is volatile compared to larger grocers. And those are the ones we enjoy helping the most.

10:29 – Anthony Presley:
It sounds like you have a true SaaS company with an actual customer success team that’s really there to help your customers—who aren’t always technical—actually use the tool. Meanwhile, behind the scenes, the data and the AI are fairly technical.

10:50 – Eran Harel:
Super technical—with PhDs, models, and everything. But again, the importance is making it simple so everyone can use it—even the busiest of them all. And if they don’t, then our account management will. Our success team will go and say, “Hey, we recommend doing that.” That’s something we enjoy seeing day in and day out.

11:18 – Anthony Presley:
Yeah, that’s amazing. We recently did something, kind of brainstorming at the last ROFDA, about some data you had and some data that TimeForge had. We put that together around employee discounts. Maybe talk a little about that—you happen to have data on who the employees are in the store. What’s a discount program that might be run? Could you explain that?

11:43 – Eran Harel:
Yeah, by all means. This is the fun about the value exchange here at ROFDA. We run employee discounts for our stores—either a percent off their basket or a cap like $10 a day, however the grocer wants to set it up. But the biggest challenge, knowing how time-sensitive things are, is automating it. If you rely on someone updating the system—Anthony is an employee today but gone tomorrow—it often doesn’t happen or is delayed.

12:38 – Eran Harel:
Through our automated process, all of it happens seamlessly. One less headache for a busy grocer—small or large. It helps retain employees and engage them. And you and I know from data—an employee who gets a discount as part of an engagement program will likely stay longer, be more engaged, and make purchases at the store. Statistically, the average basket of an employee with a discount is 35 to 50% more than anywhere else.

13:29 – Anthony Presley:
Right.

13:29 – Eran Harel:
It’s a win for everyone. And with our tool, we just automate it and make it easier for everybody.

13:35 – Anthony Presley:
Yeah, it’s amazing. I think it might be the first in the industry—between disparate systems. We’re excited about the interchange of employee data and discounting—automating that completely. We have customers that didn’t do employee discounting because of the headache. Now we can flip a switch and turn it on automatically. Funny enough, I had lunch yesterday with a friend—he’s on the vendor side—but he used to work for a credit card company. One of the benefits was a cell phone discount. He left the company three years ago, and just last month they figured out he was still getting the discount.

14:25 – Anthony Presley:
So for three years, he got a discount because someone never processed the paperwork.

14:32 – Eran Harel:
That’s why with our integration—and part of the reason we enjoy working with you guys—is that we have a mission to help independents compete. As a result, we’re happy to ensure we’ve created the single source of truth.

14:58 – Anthony Presley:
Right.

14:58 – Eran Harel:
We integrate and provide our APIs. We’re open to integrations—whether it’s with e-commerce, website BI tools, or whatever. Because at the end of the day, whether you’re an employee or shopper, Anthony is Anthony.

15:14 – Anthony Presley:
Right?

15:15 – Eran Harel:
And as a shopper, you’re expecting the same experience. You don’t care if there’s one provider or ten. It’s all part of the mission of making that data usable.

15:28 – Anthony Presley:
If you could give one piece of advice to someone who has no system right now—nothing like AppCard—and they’re thinking about it… maybe opening or acquiring a grocery chain… what’s the first thing you’d tell them to do before implementing something like AppCard?

15:57 – Eran Harel:
Even before doing AppCard or anything similar, really understand what you want to get out of it. Know your KPIs—how the tool can help you. Whether it’s growing a category or driving shoppers to the meat department—like anything in life—know why you’re doing it. That “why” will guide how to use it. A marketing or rewards program is crawl, walk, run. First, build your customer base. Then understand and target. Then come holiday seasons. Then do year-over-year comparisons.

16:55 – Eran Harel:
Results can be seen early, but like anything, there’s a growth curve. That’s important to know too.

17:08 – Anthony Presley:
We mentioned machine learning and AI. Big topic in tech. This industry isn’t known for fast tech change—but it’s happening. What do you think is coming in the next 18 to 24 months?

17:30 – Eran Harel:
Some things already in place just aren’t labeled “AI” or “machine learning.” But more will come—starting with big players like Kroger and Albertsons, then filtering to independents. From our world, automation of campaigns, promotions, targeting—for example, if someone buys toilet paper every 21 days, don’t give them a coupon the next day. But if 23 days go by and they haven’t bought it, remind them.

18:18 – Anthony Presley:
Or we lost them.

18:19 – Eran Harel:
Or we lost them.

18:20 – Anthony Presley:
Yeah.

18:20 – Eran Harel:
Make sure we use that data. Also—know exactly when and how to send an offer. Anthony prefers texts in the morning, Audrey prefers email in the afternoon. These are the basic examples. But AI and machine learning will also touch other areas—like refrigeration cost optimization, ESLs (electronic shelf labels), personalized pricing. If Anthony always buys in a category, you may only need a $0.25 discount, not $1.

19:21 – Anthony Presley:
You haven’t mentioned the buzzword of the year: retail media networks. Are you using them?

19:30 – Eran Harel:
Elephant in the room!

19:31 – Anthony Presley:
That’s right. Are you working with it?

19:35 – Eran Harel:
First, AppCard is the largest coupon aggregator in the industry for independents. So we definitely play. But let’s be honest—retail media needs critical mass to be effective. You could get a $5M budget from P&G, which sounds like a lot. But from their perspective, with a $500M–$750M launch budget, $5M is a rounding error. You need enough stores and shoppers. Stores alone aren’t enough.

20:43 – Eran Harel:
With critical mass—say 15M invested—you can start to show impact. AppCard now has 2,500 stores and 28M households. Starting to be interesting. But we believe even more scale is needed for retail media to matter.

21:18 – Anthony Presley:
Yeah, for sure.

21:19 – Eran Harel:
You also need touchpoints—some programs have 1,000 stores but rely heavily on mobile apps. App participation may be only 15–20%, versus 70–80% elsewhere. You need scale and broad engagement—on the shelf, in-lane, online, ecommerce, etc. That’s where it becomes powerful.

22:14 – Eran Harel:
So yes, it’s important. But without scale, it’ll stay limited. Also, ask five people what retail media means—you’ll get five different answers. But for us, it’s a crucial part of the future.

22:51 – Anthony Presley:
Any last parting thoughts here?

22:53 – Eran Harel:
Exciting times in the industry. Grocers understand the importance of digital and communication—both with employees and shoppers. Brands want to reach shoppers directly and spend smarter. We need to focus more on incrementality, ROAS, and things like that. Definitely an exciting couple of years ahead. We’re here to enjoy it.

23:33 – Anthony Presley:
Appreciate the time. Thank you so much.

23:35 – Eran Harel:
Of course.