DETROIT -- Having just completed rolling out an electronic frequent shopper program to 95 Farmer Jack stores, the Michigan division of Montvale, N.J.-based A&P will test several initiatives to drive sales and shopper loyalty.
Called the Farmer Jack Bonus Savings Club, the card-based program awards shoppers electronic discounts at the point of sale. More than 1,000 items are featured in the program, according to Craig Sturken, vice president of the Michigan group, Farmer Jack.
This week the chain will begin evaluating results from one new incentive program, a four-store pilot designed to increase shoppers' transaction size.
"We have identified what we call the 'moderate' or 'mid-level' shopper and are offering an incentive to trade up to what we call a 'loyal' level," explained Tom Montgomery, vice president of merchandising at A&P Michigan group, Farmer Jack.
"Moderate" level shoppers, or those who typically spend $50 in a trip, will be issued a certificate for free products when their order exceeds $50, he said. The incentive program's objective is to shift the $50 transaction to the $75 level.
Other initiatives tied to the Bonus Savings Club are designed to prevent shoppers from straying to the competition -- and to recover those who already have been lost.
"We are also running defensive types of programs where we offer a $50 cash award when someone buys $500 worth of groceries in a five-week period," Montgomery said. "That works very well in defending against a competitive grand opening."
Going forward, point-of-sale data collected through the Bonus Savings Club program could be
used for strategic buying decisions, to develop optimum product assortments on a store-by-store basis.
"We would be better able to customize the product lines that may go into certain stores based on demographic information, to better tailor the product mix of any one store," Montgomery said.
"We see [the Bonus Savings Club] as a sales-driven program, not an income-driven program," he added, noting Farmer Jack had no plans to sell POS data to third-party companies.
Montgomery said other programs are being developed for the frequent shopper program and that a new staff position, Bonus Savings Club coordinator, has been established to head new trials.
"We have all these ideas but now it's at the stage of developing tests to see which ones work best, and then that will give us a menu to pick from in the future," he said.
The Bonus Savings Club was first introduced to Farmer Jack stores in December 1993, when A&P began upgrading point-of-sale systems. Last month, the final wave of stores was equipped with new systems from IBM, White Plains, N.Y., and brought online with the Club program.