SPARTAN RE-EMPHASIZES FREQUENT-SHOPPER PLAN

DENISE ZIMMERMAN

GRAND RAPIDS, Mich. -- Spartan Stores is taking steps to boost retailer involvement in its frequent-shopper program.

To date, only three dozen of the 500 retailers the wholesaler here serves have signed on to the program, said Brian Moore, manager of applications services for management information systems.

But that is expected to change as more and more retailers become aware of the program and realize its potential benefits and its affordability, he said.

As part of a renewed emphasis on the program, Spartan now has an electronic marketing coordinator responsible for going out into the field and working with retailers to develop frequent-shopper programs specifically tailored to their needs, Moore said.

Under the program, Spartan issues cards to customers. When the cards are scanned at stores, the customer is entitled to discounts, some of which may not be advertised. At the same time, the cards make it possible to record who bought what, so Spartan and the retailer learn a great deal about their most important customers.

The push to enroll retailers in the frequent-shopper program follows on the heels of Spartan's highly successful rollout of an electronic payment system called Easy Choice.

About 160 of Spartan's retailers are enrolled in that program, which includes electronic checking and check verification services, he said.

The 36 retailers now on-line with Spartan's frequent-shopper card, introduced about two years ago, are now awarding electronic discounts at the checkstand to some 500,000 customers, Moore said.

The retailers are also collecting point-of-sale shopper data and transmitting it daily to Spartan's data base.

Spartan calls this information "panel diary data." Moore said it "includes every item that is purchased by a customer -- and ties it to that customer. It's the rawest form of point-of-sale data because it is down to the customer level. We provide the large file capacity to store that history for the retailer to use," Moore said.

Spartan, in turn, queries the data base at the retailer's request and provides reports on buying patterns and demographics for use in target marketing. "We are doing reports on who is doing what in the store, the consumer who spends traditionally $100, week in and out," he said. "For the consumer who doesn't buy anything in the deli, we can send or mail a coupon to that customer for deli purchases next time they are in the store.

"This way," he continued, "I can market to age groups, market to cherry-pickers, try to get them to become my permanent customers. I can enhance cross-department purchasing."

A key attribute of the frequent-shopper program, he said, is that the retailer customizes it from start to finish. As an example, Moore said, a retailer "can preload electronic discounts for a specific shopper or all the shoppers in general."

Though Spartan assists in customer enrollment, for instance, it's the retailer who determines how explicit or how general application questions will be.

"It's highly flexible," he continued. "The stores pick the items for electronic discounts, how big they are, how frequent, how they advertise and whether to put out a flier in the store or do mailing."

Moore said Spartan hopes to make use of its own print shop to offer direct-mail services. "We're not there yet, but we have the ability to turn out mailing brochures targeted to special customers."

Venturing into a frequent- shopper program could prove too costly for the smaller retailer on his own, Moore said, but the benefits are too attractive to forgo.

"Given the competition from the alternative formats, the chain stores with which our retailers compete, we as a wholesaler do our best to furnish services so they can live in the big world."

The card used in the frequent-shopper program, customized with the retailer's own logo, is the same card used in Spartan's more broadly accepted electronic payment program, Moore added.

"We provide them check verification services and electronic checking through our switch locally or route credit card transactions and bank debit card transactions appropriately for approval."

The electronic payment and frequent shopper programs are limited to retailers on the IBM 4680/4690, NCR 2127 and Casio 2100 scanning systems. Retailers with other equipment can link up by installing an interface file.