DUTCH CHAIN'S SHOPPER CARD TURNING UP ACES IN VOLUME

JAMES FALLON

AMSTERDAM, Netherlands (FNS) -- Edah Supermarkten's electronic frequent shopper program has helped spark a 3% increase in total store volume and a huge hike in one especially high-margin category.

"Since we introduced the Edah Card in every store, our total sales have increased by 3%. At the same time, we have attracted 2% more clients and the average purchase amount has increased by 1%," said Wil Brugman, managing director of Edah Supermarkten, Helmond, Netherlands.

The program has also produced a 35% hike in private-label sales, he said.

Brugman shared highlights about Edah's frequent shopper program at a conference here last month titled, "Retail Marketing in the Information Age," sponsored by CIES: The Food Retailing Forum, Paris. The conference attracted nearly 250 delegates, including retailers, manufacturers and consultants from Europe, the United States and elsewhere.

Edah's program lured customers to purchase products based on a series of rewards, including a 5% discount on all the company's 400 private-label products, a 10% discount on all products during the early part of the week when shopping volume was typically light and discounts of up to 25% on specific products. Shoppers enrolled in the program, about 1.2 million customers, account for more than 70% of the chain's annual sales of $1.63 billion and spend twice

as much on average as shoppers not participating in the program, he said. Edah operates 275 supermarkets.

The frequent shopper program has proved so successful Edah is now testing several new initiatives in the electronic card-based arena. For example, the chain has begun a single-store test of a smart card.

Customers using the card can access an electronic kiosk to get help in locating specific products or obtaining other store information.

"We are very curious about the results of the second generation of the Edah Card, since we are convinced that in the future [computer] chip cards will become very important," Brugman said. "They will be multifunctional and will not only play a role in customer-loyalty programs but also provide payment functions."

Edah also is increasingly implementing some data base marketing initiatives. The chain, for example, has linked with three fashion retailers offering discounts to Edah's frequent shopper customers. In addition, it is staging several joint promotional offers with a fashion retailer and a holiday tour operator.

Edah has also begun analyzing shopper data to determine which stores customers visit and what distances they travel. Using that data, the chain classified its stores and customers into nine types, or "clusters," for future marketing initiatives, Brugman said.

Edah's frequent shopper program was introduced in three stores in October 1991 when the chain had only a few scanning devices at the checkout. The success of the program, though, prompted the chain to introduce the card to 20 more stores in March 1992.

The higher sales generated in those stores convinced Edah to invest heavily in front-end scanning and by May 1995 all the chain's stores were equipped with scanning and offered the loyalty card.