More Effort For The Same Discounts? by Karla Vierthaler The look of America’s key chain has changed. Remember when it consisted of a couple of keys on a simple loop? Now, key chains serve as a walking advertisement of every grocery store and pharmacy in the area. It’s the merging of technology and loyalty marketing and it indicates more than a cluttered key chain. Over the last several years, many grocery and pharmacy chains have introduced customer tracking and incentive card programs. Fill out simple information (name, age, sex, address, phone, e-mail), and instantly you are the beneficiary of special savings and deals. What’s more, the store gives you the option to receive even more special coupons and offers via mail. What’s the big idea? Well, each cardholder is given a number and each time the card is scanned into the computer, every purchase you make is tabulated. You become a part of a huge database of consumer buying for the company. The idea is for the company to gain an understanding of how individual shoppers buy and to customize mailings and offers to them for optimum results. With the average shopper going to the supermarket twice a week, a relationship could get pretty intimate. It’s a beautiful thing in theory: you get less junk mail, discounts on your purchases, and the store of your choice gets to know you a lot better. It’s marketing that aims to enhance our life and shopping experience through technology. What’s It All About? Here’s a look at how local stores have set up their card programs. MODE Weekly interviewed Giant Food Stores, Weis Markets, and Rite Aid to get an inside look at card programs in the Harrisburg area. Weis was the first chain to introduce a card program in Central Pennsylvania. The Preferred Shopper’s Club was introduced in 1996, replacing a stamp program. The Green Stamp program required shoppers to save the stamps received when checking out, compile them, and bring them back to the store for savings. When Weis replaced the program with the technologically advanced Preferred Shopper’s Card, customer response was positive. “They like the values and the ease of use,” says Dennis Curtin, director of public relations for Weis Markets. “The Weis Card Club is a much better vehicle for delivering overall value to our customers, in terms of discounts and our overall marketing promotional campaign.” Curtin is quick to point out that Weis does not sell or pass on the information they collect to outside sources. He admits they send out mailings based on the information, saying, “we’re very focused about it; we don’t inundate customers with junk mail.” Giant, who just celebrated the year anniversary of the Bonus Card, maintains the same privacy for their cardholders. “We’re interested in household behavior,” says Dennis Hopkins, vice president of marketing and sales for the company. “We want to know if there’s a baby in the house, pets, etc. We target offers to groups.” He says that five years ago the company advertised against card programs, but asserts, “ the market has changed; technology has changed.” “We didn’t know who our customers were,” Hopkins says, “we couldn’t thank them by offering them discounts. We’re very, very pleased [with the Bonus Card Program].” Both Giant and Weis say they send out all mailings in-house, and that manufacturers never see the information they collect. “The manufacturer gives us criteria [for the mailings], and we take care of everything,” says Hopkins. “We don’t share the data we collect,” echoes Curtin. Rite Aid is still testing the Rite Rewards Card, and Central Pennsylvania is a test market for the company. John Learish, vice president of marketing, says Rite Aid is building a database with the information they collect “to make better informed marketing decisions, specifically for direct marketing campaigns.” Learish says they categorize data into sections such as beauty, photo finishing, and baby purchases. Learish asserts that the company does not sell or share the information they compile, stating, “We do not provide any customer information to a manufacturer.” He says the company may share a response rate of a similar marketing campaign with manufacturers, but “will not get more detailed than that.” Another advantage of card programs is the ability for companies to track how much you’ve spent for promotional campaigns. Remember when you had to prove how much you spent at a store to get that free Thanksgiving turkey? No longer! Now the computer can tell the cashier when you are eligible for promotions like the free turkey or a discount coupon. Weis’ Sizzling Summer Savings Program tracked customer spending, and qualified individuals received discount coupons ranging from five to 10 percent off their purchase. Giant and Rite Aid offer similar programs throughout the year. What’s it all mean? Card programs sound wonderful on paper. Supermarkets keep everything on the up-and-up and the consumer receives deals and discounts with the simple wave of a key ring card. But how does the supermarket benefit? If they don’t sell the information and make the big bucks, where does the influx of revenue come from that would make such a program beneficial? According to Kevin Coupe, the self-titled content guy from IdeaBeat.com (a website dedicated to retail and marketing for the food industry), the great goal of card programs is loyalty marketing. “The supermarket looks at what you bought and gives you benefits, and then you buy more because they knew how to market to you.” So, is it working? Not really, says Coupe. “Retailers don’t have the capacity or patience to use the data as efficiently as they could have,” he says. What it boils down to is that supermarkets are compiling detailed information, but not analyzing and assessing it to launch the efficient marketing programs that could come from such data. Another problem is the amount of cards most consumers possess. Supermarkets hope you are only a member of their card club, but the truth is that most people have many cards. Says Coupe, “Many have five to six cards; they aren’t discriminating.” Therein lies the problem: the whole concept of loyalty marketing is defeated if there is no loyalty. Giant’s Hopkins cites the Bonus Card as having penetrated almost 70 percent of the market in Harrisburg, a sure sign of success. But if consumers also shop at Fox’s Market — a store without a card program — or Weis Markets, the success of the Bonus Card diminishes. These factors all point to the age-old reasoning that consumers shop first and foremost for price. The question then becomes, If I don’t participate in this retailer’s card program, am I being unjustly penalized? Here’s a tip for you “Anti-Big Brother” consumers. Just ask the clerk to scan their card for you. You get the discount, they get the points. Everybody wins!