The turkey giveaway illustrates the dilemma retailers encounter with tying in-store media to frequent shopper rewards programs. How do you target and reward your best customers without alienating others who may not spend as much?
Some retailers, like Lees Market, Westport, Mass., are known to pass the free bird onto to their best customers quietly. Others, like Ukrop's Super Markets, Richmond, Va., mount a free bird promotion with in-store hoopla. Ukrop's shoppers can earn "Turkey Points" based on the dollars they spend in the store.
Utilizing in-store media to deliver the message, reinforce the loyalty program, and boost in-store purchases seems like an obvious marketing tactic but retailers and consultants admit it requires a careful balancing act.
Remke Supermarkets, Covington, Ky., takes a traditional approach, said Pat Iasillo, director of customer relationship marketing, by tying weekly ads to in-store price signs and special displays. This is all related to the frequent shopper card. The retailer uses in-store broadcast media to announce these specials and to promote use of its shopper loyalty card.
Remke also mails a monthly coupon incentive booklet to the top 30% of their most loyal shoppers. The booklet is designed based on households' previous purchases, Iasillo said.
However, direct mail is very costly compared to its small percentage of return, say critics, and it doesn't grab the shopper where it counts -- in the aisle in store.
One example of a promotion that is designed to reward shoppers and grab them in the aisle is Ralph's Grocery Co., Compton, Calif., coordinated effort that ties into its frequent shopper program with displays of general merchandise related to the animated Disney/Pixar film, "Monsters, Inc." The promotion, which broke last month, offers shoppers free admittance to the movie if they accumulate $300 in groceries using the Ralph's Club Card. "Monster's, Inc." merchandise, including books, backpacks, toys and oral care products, are available from special point-of-purchase displays set up in conjunction with the program.
When it comes to going beyond the operational routine of shelf tags and highlighting special deals, Betsy Tucker, senior consultant with Naples, Fla.-based Retail Systems Consulting, believes much more can be done in terms of taking advantage of new ways of relating to shoppers the deals being offered in the store.
"There have been some tests with kiosks and the results haven't been overwhelming," Tucker noted. "One question retailers will have to decide with in-store media purchases is are they going to try to use something that touches everybody in the store or do they want to put in multiple communication vehicles -- each one touching different subgroups of people. Kiosks may be used by 14% of the people coming into the store, but how do you reach the rest?"
Rex Harcourt, president of marketing and procurement for Carter's Food Centers, Charlotte, Mich., says the key is to deliver one-to-one marketing messages specifically based on what the customer wants and has purchased in the past. That information is contained in the data collected from frequent shopper programs. In Carter's case, this is obtained through the S&H greenpoints program in which about 80% of Carter's store purchases are made through this program.
"S&H's point-of-sale system is the most effective in-store media for delivering rewards, and offers it in real time to shoppers. It can be triggered by the UPC code or a promotional code. When you can trigger anything by UPC you can trigger it by commodity or by past purchases. That is the true power for us. Anytime you can do that you will definitely have an effect on your basket size and your sales," Harcourt said.
Noah Katz, vice president, PSK Supermarkets, Mount Vernon, N.Y., also endorses the S&H program as "far ranging and sophisticated" in its use of in-store media. He pointed to the S&H Information Center set up in each of the company's 11 Foodtown stores that distribute the many different informational brochures related to the program. There are also greenpoint in-store specials where displays of product are set up related to these offers. "It's very clear," said Katz, "when shoppers walk into our stores [that] S&H greenpoints is a big reward for Foodtown shoppers." Last year Foodtown shoppers redeemed over 70,000 gifts through the program, which was launched in 1999.
Arthur Sweetser, senior vice president of marketing for S&H greenpoints, Salem, Mass., said that technology now allows the retailer to have an "old-fashioned" relationship with its shoppers by creating a dialog with them in the checkout lane. "We call it e-mail in the lane," said Sweetser, referring the 3-inch by 4-inch printer attached to the POS system that delivers customer-specific incentives when the shopper's card is scanned. The program categorizes its shoppers based on spending levels per month -- from over $500 a month to $50 a month. "You deliver the best offers to the best shoppers without offending the other shoppers," said Sweetser.
Mel Korn, chief executive officer, Collaborative Marketing Worldwide, New York, cautions retailers considering in-store media to "make sure you just don't take a generic approach across all channels. This is the kind of thing we crank into collaborative marketing and we take it up to another level. Sales data is part of it. But it is truly understanding the emotional connection that shoppers have with the store at that specific banner and with the category that affects how you should look at the aisle."