A&P, SCHULTZ TO INTEGRATE LOYALTY PLANS IN INTERNET PROGRAM

DEENA AMATO-McCOY

MONTVALE, N.J. -- A&P here and Schultz Sav-O Stores, Sheboygan, Wis., are among at least six retailers that will integrate their frequent-shopper programs into an Internet-based coupon program starting in early September. The combination will allow retailers to target their loyal shoppers on-line, with discounts tailored to their specific shopping behavior.

"We are planning to use this component to actually target offers to our frequent-shopper cardholders," said Ellen Evans, director of consumer marketing services for A&P. "Targeted on-line coupons will cut through the clutter, and will provide customers with incentives applying specifically to them," she added. "Secondly, targeted promotions will keep our best customers coming back, because it shows we know what they want, and we value their business."

A&P plans to give cardholders from 665 of its supermarkets, which operate under a number of banners, the ability to access targeted electronic coupons. Schultz Sav-O's 86 Piggly Wiggly stores will provide the same access to their cardholders.

More than 20,000 customers of the six participating retailers have reportedly signed up.

The incentives, which will be changed monthly, will enable retailers to target product offers based on customer purchase behavior data stored in their frequent-shopper databases.

"Primarily, this lets us understand what our customers want and what incentives they will redeem, as opposed to just taking a mass media approach," said Michael Houser, executive vice president of marketing and merchandising for the Piggly Wiggly stores. "For example, if you are a health-food user, we may entice you with specific products in that category -- not send coupons for baby or pet products if you don't have infants or pets," he added.

Other retailers that will reportedly target their loyal cardholders include Jewel Osco, Melrose Park, Ill., a division of American Stores Co., Salt Lake City; Ralphs Grocery Co., Compton, Calif.; Giant Eagle, Pittsburgh; and Grand Union Co., Wayne, N.J. Retailers are in the process of collecting customer frequent-shopper card account numbers to prepare to offer the targeted incentives on-line.

"When customers enter their preferred retailer's site, there is an area where they are asked to enter their frequent-shopper card number," said a source familiar with the situation. "So far, there are well over 20,000 customers signed up for the service throughout all six retailers."

In addition to visiting specific retailer Web sites, customers can access the on-line coupons, an extension of ValuPage, from Supermarkets Online, Greenwich, Conn., the Internet division of Catalina Marketing, St. Petersburg, Fla., through www.supermarketsonline.com.

Customers log on, enter their ZIP code and choose their preferred retailer from a selection of stores in their area. Once the retailer is chosen, the featured incentives are displayed. Customers click on their desired incentives, then print out the page to bring to the store for redemption.

At the checkout, a bar code, printed at the top of the sheet, is scanned. The bar code triggers the Catalina printer, housed at the point of sale, to produce a "Web Buck" certificate for the amount redeemed during the visit. This certificate is used toward the consumer's next shopping trip.

Retailers expect this marketing tool to give them a stronger competitive advantage. "This is an opportunity for us to use a new vehicle to deliver more value to our shoppers' homes," said A&P's Evans. Schultz Sav-O expects this program to be a push toward gaining a new customer base. "We expect to start focusing on younger shoppers," said Houser. "Eventually we expect to reach more younger families because the Internet is a medium they use," he added. "They are more familiar, and comfortable, with the technology than older customers."