GEMCON CONFERENCE
NEW ORLEANS -- The majority of future growth from frequent-shopper efforts will come from improving marketing to existing customers rather than adding new participants, according to Jane Perrin, managing director, global information services, at ACNielsen. Perrin presented the findings of Nielsen's fourth annual frequent shopper survey here at last week's GEMCON Conference. She spoke with SN last
March 27, 2000
DAVID GHITELMAN
NEW ORLEANS -- The majority of future growth from frequent-shopper efforts will come from improving marketing to existing customers rather than adding new participants, according to Jane Perrin, managing director, global information services, at ACNielsen. Perrin presented the findings of Nielsen's fourth annual frequent shopper survey here at last week's GEMCON Conference. She spoke with SN last week shortly before the meeting. Nielsen is based in Schaumberg, Ill.
Perrin noted that since frequent shopper programs have doubled the percentage of participating households -- from 35% to 70% -- in the past four years, the programs will grow more slowly in the future. She said rather than focus primarily on how to get more shoppers into their programs, retailers should use the programs more to help them fine-tune their promotions.
"Supermarkets need to use the information to reach out to their customers," she said. "It allows them to tailor their promotions to specific customers, those who always buy diet soda, for example."
Other findings of the survey included:
60% of all frequent-shopper households participate in more than one program.
Frequent-shopper programs are the third most important reason consumers give for their choice of supermarket, behind only a convenient location and store deals.
81% of participating households have been members of a program for more than a year.
In market regions with higher rates of participation, participants tend to have been in programs longer. In Chicago, for example, where 97% of households participate in a program, 97% of participants have been in a program for more than a year.
83% of participants use their frequent-shopper cards every time they shop.
The principal reason people gave for not joining a program, mentioned by 73% of nonmembers, was that the store they shop in does not offer one.
Demographically, frequent-shopper cardholders tend to be college-educated, affluent people living on the East or West Coasts in households with children. Nonmembers tend be blue-collar workers living alone in the South and Midwest.
Perrin pointed out that these demographics were very broad generalizations. "When you look at a place like Chicago, you're not just reaching upscale shoppers," she said. "When you've got more than 90% of the shoppers, you've got everybody."
She also observed the survey found shoppers did not seem particularly concerned about consumer privacy issues, with only 3% of the frequent-shopper program nonmembers saying hesitancy to provide personal information keeps them from joining a program.
"The privacy issue did not surface as a major factor," she said.
Perrin said she was surprised by the survey finding that, in several markets, the introduction of new programs did not result in an increase in overall participation, particularly in markets where 60%-75% of households are members. In Boston, participation dropped 2% to 72%, despite the introduction of a new program by Price Chopper, and in Sacramento participation declined 4% to 64%, despite a new program at Ralphs. "Growth in participation is slowing from where it was," said Perrin.