EASING THE SHOPPER'S WAY

SUSAN ZIMMERMAN

It's a new technology-driven world for supermarket shoppers.

From frequent-shopper programs to paperless electronic coupons to full-service banking, technology is fundamentally transforming the supermarket shopping experience for consumers. And it is only beginning.

"Like everyone else, we are continually looking for ways to help the customer facilitate the shopping experience," said Joanne Donley, vice president of information services for Raley's, the 82-store chain based in Sacramento, Calif.

Donley cited the surging reliance on credit and debit cards by consumers as one major change sweeping the industry. All forms of "in-lane electronic payments are extremely popular with our customers," Donley said. The chain plans to participate in an electronic benefits transfer program involving food stamps when it is launched in Raley's operating areas, she said.

At Vons Cos., a technology-driven area exerting a growing impact on how consumers shop the stores is its preferred-shopping program, called VonsClub.

VonsClub members receive electronic discounts automatically, as well as a monthly newsletter announcing specials and providing other specialized information, said Julie Reynolds, spokeswoman for the 345-store chain, based in Arcadia, Calif.

Reynolds pointed to the growing role technology is playing at Vons throughout the chain, both in operations and in-store shopping services, and stressed that the two areas, in the long run, are closely intertwined.

Although the consumer may not "see" many of the initiatives involving technology, such as scanning and price maintenance programs, they definitely can have a considerable influence on the consumers' shopping experience, she said.

For one thing, more efficient operations clearly can inspire more customer confidence. "I think customers understand that because of improved efficiencies, we can lower our operating costs and pass the savings along to them," Reynolds said.

But it goes even beyond that. Technology is now being used to ensure accurate product pricing, an area that consumers are aware of and concerned about.

"Technology in warehouses and behind the scenes is making the supermarket manager more efficient and effective. In 1993, we spent $17 million in capital expenditures on pricing integrity and technology, and we continue to budget for improvement. Technology improves our pricing integrity and boosts customer confidence," Reynolds said.

For many retailers and consumers, though, the most prominent and fastest-growing areas that are changing the shopping experience by reaching out to individual consumers are frequent- or preferred-shopper programs.

The programs, which typically require consumers to obtain a membership card issued by the chain and use it to record shopping purchases at the front end, have captured the imagination of retailers for some time.

But now they are also beginning to capture the imagination of supermarket shoppers by offering them special discounts on selected items and rewards for shopping loyalty, among other incentives.

At Seaway Food Town, Maumee, Ohio, several hundred thousand customers at the chain's 44 stores now use Food Town Plus cards to reap couponless savings, cash checks, rent videos and even receive discounts at local restaurants and other businesses, said Pat Nowak, director of consumer affairs.

On average, 72% of each store's customer base has signed up for the program, Nowak said.

Between 400 and 500 specials, such as saving up to $1.50 when purchasing soft drinks, cereal, produce, deli and grocery items, as well as buy-one-get-one-free offers on meat items, are featured weekly. Specials are listed in fliers and emphasized with in-store signs, she said.

"If our customers bought every Plus Card special, they could save $15 to $25 every week," Nowak said.

Discounts are triggered at the checkout when the item is scanned, regardless of whether the customer realizes it is a featured item, as long as the customer has the membership card. "The total is automatically deducted at the checkout, and the receipt tells the total saved," she said. "The program is very successful."

It is a changed world of supermarket shopping -- and it will be changing even more in the future, Nowak added.

For instance, within six months, the Food Town Plus cards will also be able to be used as automated teller machine direct-debit cards. In addition, the chain is developing a children's summer fun book for its Plus members, offering discounts to amusement parks, museums and the Pro Football Hall of Fame in Canton, Ohio.

"We want to be everything to our customers," Nowak said. In fact, today's supermarkets are getting pretty close to that. Selected Seaway stores now also feature in-store banks, credit card purchase and cash advance capability, and a computerized in-store system through which customers can purchase tickets for live theater, including touring Broadway shows, Toledo Museum of Art special exhibits and university sporting events.

But it is the Plus program that helps create a special image for Food Town and a unique bond with its customers, Nowak said.

"We wanted our card to provide savings without [store] coupons. But we also wanted customers to be able to use the card in other ways around the community," Nowak said. "That's why we've taken it a step further and solicited local restaurants, regional Domino's pizza outlets and Tuffy Muffler outlets [to create] the children's fun book."

At Ukrop's Super Markets, Richmond, Va., a similar program has been in place since 1987 and is currently being upgraded to incorporate newer technology, according to Robert Ukrop, executive vice president of the 22-store chain.

Shoppers using the chain's Valued Customer Card receive automatic discounts and electronic coupons at the checkout. Soon, the cards will also be used for check verification and other types of benefits, Ukrop said. "All these card-based systems will continue to grow in value," he said. "We've been very fortunate to have [the program] since 1987. I think ours was one of the first in the country. "The customers see value in the card, and it provides us a platform that allows us to target those customers. We communicate with 200,000 customers with a monthly newsletter" as part of this program, Ukrop said.

Targeted marketing is also a key initiative at Felpausch Food Centers, Hastings, Mich., which is testing a preferred-shopper program in four of its 19 stores, said Mike Hubert, MIS director.

Felpausch's program is two-pronged: Its Felpausch Priority Club offers shoppers automatic discounts at the checkout and a Golden Opportunity program for shoppers 62 and older offers additional discounts on Wednesdays.

"With the frequent-shopper program, we can capture information on who is shopping, when they shop and what they buy. We can develop a profile on each customer that tells us if that shopper has a baby or a cat, for example, and then we can target a direct mail campaign, using vendor coupons, to meet the specific needs of that customer," Hubert said.

"More important, we believe we will be able to attract more shoppers to our more profitable departments," Hubert said. "If a customer never makes a deli purchase, we can offer that shopper some incentive to try our delis."

Hubert said that the program will also be useful in identifying lost customers. "Anyone whose card has not been swiped into the system for three weeks will receive a questionnaire so they can tell us why they haven't been in. Did they switch stores, or have they just been on vacation? We want to know."

These types of targeted marketing programs provide Felpausch with an opportunity to "get better in touch with the customer," he said. The Felpausch program is an upgrade from one in place for several years that used a lightweight plastic card encoded with a bar code, which was used for check verification and video rental.

The new cards have a magnetic stripe that enables them to be swiped through a reader at the checkout to trigger automatic discounts on purchases or create an electronic check.

Schnuck Markets, St. Louis, for its part, is testing a preferred-customer program called ESP -- Extra Shopping Power -- at a limited number of the chain's 63 stores.

ESP shoppers can use their cards to receive special discounts on purchases, to rent videos or to cash checks or trigger an electronic check, said Sue Kunstmann, communications specialist.

Kunstmann herself is an ESP shopper. "It's neat because on a lot of the things I buy, I get a nice surprise of some cents off. I don't have to keep track of anything. The shelf-talker tells me about some savings, but a lot of times I just find a little something extra" when the savings is listed on the register receipt. Kunstmann believes programs such as ESP build customer loyalty and create a special image for the retailer.

"The customer identifies these types of programs with the retailer," Kunstmann said. "It helps distinguish us from our competitors."

Another version of a preferred-shopper program is part of a checkout interactive video system at 77-unit Big Bear Stores, Columbus, Ohio. With that program, frequent shoppers earn points toward free merchandise, said Karen Bennett, director of consumer affairs.

The video system, originally installed almost six years ago, was first upgraded to include a frequent-shopper program in 1991. The system was then again expanded last summer and now offers instant rebates and instant coupons, recipes and a community bulletin board, as well as manufacturer-provided information on various products.

"We get a very positive response from shoppers. We are very pleased with the results," Bennett said.