THE BABY CLUB

LISA SAXTON

PHOENIX -- There's a new baby at Abco Foods here: the baby club.

The chain is testing a continuity incentive program in an effort to keep its customers from skirting around the baby aisle, their eyes set on supposedly greener discount store pastures.

The program, which began in August and will run through Feb. 1, 1995, was created to promote frequency shopping and loyalty in Abco customers, according to Les Knox, senior vice president of sales and marketing.

Here's how it works: When Abco customers purchase baby merchandise, they get proofs of purchase through a Catalina Marketing checkout system called Baby Bucks. When they accumulate $100 worth of Baby Bucks, they receive a $10 gift certificate for food, formula or diapers.

Knox told SN that the club's primary objective is to help Abco to stem the tide of consumers who are buying their grocery items at supermarkets, but turning elsewhere to buy their baby products.

"The program was designed to appeal to people shopping in our stores, and who may have been making their baby purchases in other areas outside of the supermarket environment," he said. "For instance, they may have been going to different places like Target, Wal-Mart, Price Club and discount drug stores."

Currently, Knox said the program is not aimed at bringing in new customers. It's trying to make the most of the present, money-conscious clientele. "We obviously knew we had a percentage of expectant and young mothers already shopping with us," he noted. "But we were sure we had seen an erosion in our sales of baby products, and we knew that erosion was because of the underpricing of some of the mass retailers."

Originally, Knox said, Abco considered attracting young mothers by doing a mailing, then decided a mailing was not the most effective way to effect behavioral change in shoppers already in the store. "We said, 'Hey, we've already got this group shopping, but they're not making their baby purchases in our stores.' "

In January, after the holiday sales corridor, Abco will evaluate the program to decide if it wants to continue with the baby club program past the Feb. 1 termination point of the experiment.

If it does continue, the emphasis would be broadened, and a target piece may go out to parents who currently do not shop at Abco and who have kids in the prenatal to 2-year-old age bracket.

"We would do that to get them in the stores. That's still a hold card we have."

But for now, with direct mail not a factor, the emphasis falls squarely on the store, with support from advertising vehicles.

To herald the baby club, Knox said, Abco used in-store signs, along with newspaper, radio and television ads. The advertising message was brief and simple: "Get a free $10 gift certificate; Join the Abco Baby Club; see store for details."

The in-store details are found in the form of a "saver envelope" located at the front of the store as shoppers enter. These envelopes explain how the club works and double as a place to save the Baby Bucks.

Abco has decorated its baby aisles with several large, hanging signs that emphasize the program's "$10 Free" aspect. And in case shoppers somehow miss these signs, there are plenty of shelf talkers with food, formula, diapers and accessories announcing products involved in the program. All the materials are color-coordinated, with the overall effect one of pastel excitement.

While Knox told SN that the certificate redemption rate "is exceeding our expectations," he declined to give exact numbers. "We get a weekly indicator of how many $10 gift certificates we're redeeming, based on hundred-dollar baby club purchases. And from that, I can tell you that it's being received very well."

One unique aspect of this test program is that it's strictly a retail program, initiated by retailers, he said. However, sponsorship from manufacturers in the aisle is on the horizon.

"We are presenting it to manufacturers as something we wanted to try, and told them that we would feed them the results. At that particular time, they could make a decision on whether they wanted to participate or not. We just mailed out those letters."

Indeed, the only potential obstacle for Abco's baby club is steady monetary support, he said. "But that's not a concern at this point, because, if the manufacturers come on board, it'll be a self-sustaining program."

Meanwhile, when the test concludes, the real test begins, said Knox, because another measure of the program's success will be if Abco sustains the new baby business once the signs, advertising teasers and incentives disappear.

"We know that they're continuing to come back now because of the certificates. The question is, if we take away the offer, will they continue to shop?"

Abco's effort is one of a series of projects under the auspices of the American Greetings Research Council, a unit formed to expand general merchandise and health and beauty care sales in the supermarket industry.

The American Greetings Research Council will announce the results of Abco's baby club program, along with those of three other test retailers, at next year's Food Marketing Institute convention in Chicago.

The council was established in 1991 with the endorsement of the of Food Marketing Institute, according to American Greetings, Cleveland. A new council is formed every two years and is made up of a rotating group of senior marketing officials from geographically dispersed supermarket retailers.

Along with Abco Foods, the current council includes representatives from Giant Food, Price Chopper Supermarkets, Buttrey Food & Drug, Raley's, Ukrop's Super Markets and Fred Meyer Inc. Other council members include FMI officials and American Greetings representatives.

"The council provides a noncompetitive environment which encourages the free exchange of ideas," explained Abco's Knox. "Each of us realized we're not alone; we are each experiencing the same difficulties.

"I am energized with new ways to address the critical issues facing the supermarket industry, and specifically those in our own back yard."