WASHINGTON -- Frequent-shopper club members of Vons Cos., Arcadia, Calif., are spending twice as much as nonmember customers, according to a recent study conducted by ACNielsen.
"Vons' frequent-shopper members are spending [on average] over $1,000 [in a 12-month period] as opposed to less than $400 spent by nonmembers," said Robert Tomei, vice president of marketing for ACNielsen, Stamford, Conn. "This proves members are outspending nonmembers by almost 200%."
He added, "If I were the retailer, I would feel positive about these results because they prove that my members are my heavier shoppers and they are outspending my nonmember counterparts significantly." Vons declined to comment on the study results.
Tomei presented the frequent-shopper study focusing on Vons' results during a session titled, "Frequent Shopper Programs: A Case Study" at the ACNielsen Category Masters Conference here Aug. 4.
In addition to spending more money, the case study also showed that Vons' club members shopped more frequently than nonmember customers.
"On average, members shopped approximately 33 times within 12 months, as opposed to nonmembers who shopped only 15 times in the same time frame," he said.
The study, conducted by ACNielsen last year, was based on frequent-shopper purchases made by 32,000 participating households nationwide. It was designed to evaluate how frequent-shopper purchasing behavior varied from market to market. The study involved 800 participants in the Los Angeles area, 450 of whom were Vons customers.
"We focused on the purchase history of households in Los Angeles, where there was one dominant frequent-shopper program -- Vons' -- and analyzed what impact there was on customer shopping frequency, loyalty and participation in that account as opposed to key competitors in that market," Tomei explained during the session.
In-home scanners were installed at participating households. A radio frequency wand attached to the scanner enabled participants to scan the Universal Product Codes of each purchased grocery item in the privacy of their homes. ACNielsen captured purchase data from participants as they electronically transferred information via modem.
While Vons' frequent-shopper member households allocated 62% of their total grocery dollars to the retailer, only 30% of nonmember dollars were spent at Vons.
Tomei also reported that Vons card members spent a considerably lower percentage of their grocery dollars at Vons' top two competitors.
"Vons frequent shoppers spend almost 30% less in competitor A's stores and about 60% less in competitor B's stores than nonmembers do," he said. "This is clear evidence that Vons' loyalty program is protecting itself against cross-purchasing," with its top two competitors.
Though the program evidently has a positive effect on participant shopping frequency and market basket size, only 8% of Vons' core shoppers currently participate in the retailer's loyalty program.
"This gives Vons the opportunity to move its occasional shoppers into the core shopping classification by enrolling them in the program," Tomei said.
He added, "These occasional shoppers do shop with the retailer. Vons needs to take this opportunity to use the program to capture more of these shoppers," and convert them to core shoppers.