PAW PAW, Mich. -- Paw Paw Shopping Center here responded to the arrival of deep discounters in its market by stepping up its electronic marketing program.
The rewards of studiously tracking shopper activity, coupled with a direct mail marketing campaign, were substantial: The store's most profitable shopper base was identified, targeted by a special mailing -- and preserved. "That was our payback," said Marvin Imus, president of the single-store operation.
"A year later we have sales gains over previous years, which is the ultimate success" for a smalltown grocer whose new neighbors are supercenters, he said.
Though Paw Paw initiated its own card-based frequent shopper program in 1990, it was only two years ago -- when its wholesaler became involved -- that it took off.
"By partnering with Spartan
Stores, I can effectively and efficiently compete with major chains," Imus said. Paw Paw transmits its point-of-sale data daily to the wholesaler, which loads it into its mainframe system before producing reports the store can use for analysis.
"With the massive data collected, we at Spartan knew the retailers could not afford to bring in their own systems to store [the data]," said Bill Sackett, electronic marketing counselor at Spartan Stores, Grand Rapids, Mich. "So we partnered with IBM to create a data warehouse.
"We are the central repository for each of our retailer's data and we return it to them in standard or custom reports useful for marketing, merchandising and category management," he added.
Sackett said retailers currently transmit data to the wholesaler via leased lines, but a digital wide area communications network will be tested at one site this fall, with a rollout planned for 1995.
The next step would be converting to a client-server environment, "where each retailer will be able to access [their own data] by PC and do their own analysis in any form they desire. This will eliminate the unnecessary lead times that we currently experience and help the retailers take timely action on their data," he explained.
Both Sackett and Imus underscored the importance of good quality scan data not only for electronic marketing but for other future initiatives, like continuous replenishment. "Without quality data, all the information you pull [from the data base] is suspect," Imus said.
The wide area network's "real-time" transmission capabilities soon could put continuous replenishment within reach of Spartan's retailers, Sackett said. "We will send that data in aggregate form with the actual scan data to the manufacturers for use in automatic replenishment.
"We also will have the ability to make available to each manufacturer purchase data tied to market demographics in the very near future," he added. "It is necessary for retailers to have clearly defined goals and objectives for how they are using it."
