MERCHANT LAUNCHES CELL-PHONE LOYALTY PROGRAM

Michael Garry

CAMBRIDGE, Mass. -- Broadway Marketplace, a one-store upscale market catering to the tech-savvy academic community here, is launching a loyalty program today that leverages a shopper's cellular phone instead of a traditional loyalty card.

Under the highly unusual program, shoppers who sign up will be able to secure discounts on 18 to 22 items by presenting their seven-digit cell-phone number to the cashier.

After developing a database of shopper preferences tied to the loyalty program, Broadway Marketplace will send text messages to shoppers on their cell phones, possibly including offers targeted to specific shoppers or groups of shoppers. Shoppers will also be able to send text messages to the store requesting information. This is Broadway Marketplace's first loyalty program.

In January, the store plans to allow shoppers to also pay for their purchases at the point of sale by placing a pre-authorization call and providing the cashier with the last four digits of their cell phone number, which is linked to a payment method such as credit, debit or check. In addition, shoppers will be able to text-message orders to the store, where they will be made ready for pick-up. The program is integrated into the store's ISS45 POS system, from StoreNext Retail Technologies, Plano, Texas.

Given its location in Harvard Square here, one of the academic nerve centers of the nation, Broadway Marketplace decided that a cell-phone program was "more conducive" to its customer base than loyalty cards, said Richard Sabounjian, director of marketing, Broadway Marketplace.

The store's customers, many of whom visit the store on foot, will also appreciate that the program requires "no card to carry," he added. The store has so far signed up between 400 and 500 customers for the program, he told SN last week.

The entire cell-phone program is provided and managed by MobileLime, Watertown, Mass., including cell-phone validation at the POS. MobileLime offers the cell-phone payment and text-messaging capability to a number of Boston-area retailers, but only one other food retailer -- five-store Super 88, Boston. (See SN, May 30, 2005, Page 42.)

Broadway Marketplace is the first retailer to use the system to offer item-level discounts at the POS.

SALES INTELLIGENCE

Sabounjian said the intent of the program was for its combination of savings and technological cachet to persuade shoppers to "come back more and spend more." The store also intends to study the transaction-log data generated through the program to identify sales trends. "We want to get a better feel for whether they are buying just loyalty items or other things," he said. "If we see that sales of one item were high, we can zero in on it to get more people to buy it or to get the same people to buy more of it."

Though a single store, Broadway Marketplace consists of three separately owned entities -- New England Gourmet, Ring Brothers of Cambridge and Broadway Liquors.

The store offers breakfast, lunch and dinner at its Hot Food bar, including a wide array of prepared foods. "We want to know, if someone comes in for breakfast, can we get them to come in for lunch and dinner? With this program we'll find out," Sabounjian said.

MobileLime will store and process all of Broadway Marketplace's loyalty data, and will work with the store on developing a strategy for communicating text messages to shoppers' cell phones, Sabounjian said. MobileLime will also process customers' text-message queries, such as which items are on special.

Initially, the same text communications will be sent to all loyalty shoppers, though targeting is also a possibility, he noted.

Carlene Thissen, president, Retail Systems Consulting, Naples, Fla., said that a cell-phone loyalty product would appeal to young "Gen Y" shoppers, the next big market for food retailers. Assuming enough other shoppers opt in to the process, "I think promotions sent to cell phones can be a new and highly effective promotion vehicle," she said. "It will be even more effective if the retailer uses its data well enough to target the promotions." Retail Systems Consulting will feature a session on Broadway Marketplace's cell-phone program at its GEMCON show in Las Vegas on Oct. 24 to 26.

Mark Heckman, vice president of Retail Insights, Sorensen Associates, Troutdale, Ore., observed that the cell-phone program will be enhanced when it's also used for payments. The program will also require sufficient marketing support. "Technology for technology's sake almost always fails without a strong customer engagement program," he said.

Broadway Marketplace's loyalty program will focus on staple products at first, rotating items every two weeks.

According to Robert Wesley, president and chief executive officer, MobileLime, the cell-phone program costs a retailer between $1,500 and $5,000 per store per year, as well as nominal fees for shopper enrollment and communications.