FURR'S STAGES TEST OF SMART LOYALTY CARD PROGRAM

CHRISTINE BLANK

ALBUQUERQUE, N.M. -- Furr's Supermarket here may be the first U.S. grocery chain to use smart card technology for its loyalty program.

Furr's began testing the SmartSource Rewards Machine on Aug. 28 at 12 of its stores in the Albuquerque area.

SmartSource, marketed by SoftCard, Athens, Ga., is an electronic smart code encoder attached to supermarket shelves, similar to traditional paper coupon dispensers. When customers swipe their new Furr's Club Card, which contains a smart chip and replaces the traditional loyalty card, the machine downloads electronic discounts to the memory chip.

The chip, which can store up to 200 discounts at a time, transfers this information at checkout, when the discounts are automatically deducted from the shopper's bill. National brands participating in this test include Bayer, Hormel, Johnson & Johnson and Kraft.

Furr's is providing current loyalty cardholders in Albuquerque with the new smart loyalty cards, and has also made them available at the test stores. Over 100,000 cards will be distributed, the company said.

"This will provide a platform for Furr's to dramatically expand the features of our loyalty program at little to no cost," said Angee Walls, vice president of marketing for Furr's. "We are confident that our customers will love the new technology and the ease and convenience in which it will allow them to save even more money at our stores."

Glen Hausfater, managing partner with Partners in Loyalty Marketing, Chicago, said, "This is the cutting edge, really. In supermarkets in the U.S., you don't see many smart card technologies [at retail] with that kind of interactivity."

The at-shelf promotion also allows Furr's to create more excitement in its stores, according to Hausfater. "If there is anywhere where retail grocery is playing catch-up, it is really making a visit to the store an exciting event. Furr's already makes shopping exciting and I think this will be a very positive aspect of the [loyalty] program," he said.

Hausfater said he is aware of only one other major retail loyalty program using a smart card: drug chain Boot's in the United Kingdom. When Boot's shoppers swipe their Advantage cards at kiosks as they enter stores, the kiosks make recommendations of products and promotions based on the shoppers' purchase histories. Shoppers using their cards at the registers also get a printout of points accumulated. This is just the beginning, said a source close to the Furr's test. "It's a platform for retailers to adopt other features, such as two-tiered pricing, school promotions and point programs," he said. Retailers can also tie discounts to purchases, offering shoppers dollars off their bill after they spend $100, for example.

"It creates a greater opportunity for one-to-one loyalty marketing, rather than just cents off," the source said. More tests of smart card technology like SmartSource from SoftCard will take place later this year and early next year, he said.