PIGGLY WIGGLY TESTS MULTILEVEL FREQUENT-SHOPPER PROGRAM

LINDA PURPURA

NEWTON, Miss. -- A Piggly Wiggly franchisee here is testing a frequent-shopper program that uses software capable of segmenting a store's customer base to provide different levels of rewards.

Robert Garvin, owner of the single store, said close to 4,000 customers signed up for the card within the first week of the program, which kicked off in mid-August. On average the store services 8,000 to 9,000 customers a week.

"We're running anywhere from 50% to 59% of transactions from the card on a daily basis," Garvin said. "I think we'll be at 70% in two months."

While the card program is currently being used only to provide customer discounts, Garvin anticipates being able to reward his best customers once the store gathers more information on cardmembers.

"When you change what you've been thinking for the last 26 years, it's a bit scary," Garvin said. "Once in a while I still have to be reminded that pushing for bigger sales is the old way of thinking. The new way of thinking is increasing the bottom line by rewarding the best customers."

The frequent-shopper program was developed by Flash Technologies, a computer consulting company co-owned by Jim Salmon, president of W.E. Salmon, which operates the Piggly Wiggly franchise in Rome, Ga. Salmon said that retailers in Tennessee and North Carolina have also expressed interest in the program.

Salmon explained that while the card is often initially used for discounts, once a store reaches 70% of volume tracked by the card, it can use this data to offer better deals to its best customers. It can also segment customers into groups so the retailer can send different kinds of coupons to each group based on their purchases.

Garvin explained that his unit should be able to reach its program goals because it is the dominant store in its area. The frequent-shopper program was brought in to help the retailer stay in the forefront.

"Jitney Jungle has a frequent-shopper program, but there are rumors more stores are coming in pretty quick with their own programs," Garvin said. "I feel like this is the future of the grocery business.