ALEXANDRIA, Va. -- Three chain drug stores will launch loyalty marketing programs, and the retailers plan to share the results with manufacturers in an effort to bolster category sales and measure the effect of promotions. The program was developed NACDS Services Corp., a subsidiary of the National Association of Chain Drug Stores here.
The program begins with the launch this month of a card-based loyalty marketing program in Duane Reade Drug Stores, New York. The program is scheduled by year's end to include programs in Drug Fair Stores, Somerville, N.J., and Lewis Drugs, Sioux Falls, S.D.
These chains will work together in a "share group" to develop, implement and analyze techniques for building the links between customer-specific information and their marketing programs, according to Kevin Whorton, NACDS' director of retail programs.
"This will be an opportunity for retailers and manufacturers to come together to build loyalty by bringing together their analytical guns to further category management," he said. "We're putting this program in place to organize a forum for retailers and manufacturers to share information."
A group of manufacturers have agreed to support the initiative, participate in quarterly share-group meetings and aid in the analysis of this15-month initial program period, according to Whorton. These companies include Unilever, Fuji Film, Conair, Pfizer Consumer Health Care, American Greetings, Alberto-Culver, SmithKline Beecham Consumer Health Care, Warner Lambert, L'eggs/Sara Lee and Del Pharmaceuticals.
According to Whorton, the project will involve extensive market-basket analysis to provide retailers and manufacturers with an understanding of the effect of promotions not only on the sales of individual products, but the category as a whole.
The drug store chains are working as a group with Consumer Card Marketing Inc., Braintree, Mass., to analyze the results of marketing efforts on overall sales and profits, as well as the ability to build consumer loyalty.
Many supermarkets, among them Wegmans Food Markets, Rochester, N.Y., have begun testing similar programs to share data with manufacturers in an effort to measure the effectiveness of promotions.
The share group will offer a forum for retailers and manufacturers to create a "learning environment" to understand how to drive chain and brand loyalty through these programs, according to Lance Clark, NACDS senior vice president for front-end programs.
A marketing program has been developed for a number of common events, and chains are supplementing these activities with their own individual marketing efforts, modifying their existing marketing programs to incorporate and prominently feature the loyalty marketing program in their store branding activities.