LANECO PROMOTION TAKES AIM AT 'LOST' CUSTOMERS

LINDA PURPURA

EASTON, Pa. -- Within weeks of launching its frequent-shopper card program, Laneco here, a division of Supervalu, Minneapolis, is analyzing customer data and mailing its first targeted promotion to shoppers.

"Customer-specific marketing typically starts with top decile reports and lost-customer reports, and we started in much the same manner," Lee Armbuster, executive vice president at Laneco said.

"We've been able to identify who the customers are, what categories they buy in, what categories they don't buy in and we're attempting -- though we've only been in the program a short time -- to use this data to market effectively," he explained.

Laneco began its frequent-shopper program May 4, and sign-up was reportedly brisk. As a result, the retailer has been able to begin developing customer-specific targeted promotions using a new system from Catalina Marketing Services, St. Petersburg, Fla.

Armbuster noted that since Laneco is using Catalina Marketing for Universal Product Code-level data storage, it was a "natural progression" to use Catalina's Retail Direct On-Line system.

To use this system, Laneco signs on to the Catalina web site, where the report menu is housed. The retailer can select a report of, for example, lost customers. Within minutes of the request, the completed report is sent by e-mail to Laneco.

Laneco's first mailing is reportedly targeting lost shoppers, defined as customers who purchased groceries at its 21 stores during the month of May but not in June.

An industry source familiar with customer-specific marketing programs said promotions to lost shoppers help retailers determine whether customers come in just to cash in on the promotion, or whether the promotion is enough to get customers to come back and continue shopping at the stores.

Armbuster declined to comment on any specific promotions but did say Laneco intends to reward customers based on their spending levels and buying habits.

Using the new system, Laneco will also be able to create other types of mailings based on analysis of its frequent-shopper data.

"In today's world, if you want to put pet products on sale, you send a pet ad to everyone," Armbuster said. "What the Retail Direct On-Line system enables us to do is send pet ads to people who have pets."

The system in use at Laneco's headquarters also permits it to create customer segmentation reports, which divide customers into groups based on the amounts they spend. With this information, Laneco would be able to pool its customers who aren't spending very much and target them with specific promotions.

In addition, retail summary profiles provide Laneco with the percentage of sales that occur on its frequent-shopper card.