UKROP'S GOES BANANAS INTRODUCING NEW KIOSK

COELI CARR

RICHMOND -- Ukrop's Super Markets used a top-selling produce item to officially launch the full-scale introduction of its shopper kiosk system in 27 of its stores.

A record 30,419 swipes during the chain's five-day "Go Bananas!" promotion increased the overall use of the shopper kiosk by 51.59%, effectively boosting the pre-promo 125 swipes per store, per day, to more than 250.

"Normally, we have no need to promote bananas, but we felt they were such a high-penetration category it was the surest thing to make people use the machines," Derby Adcock, Ukrop's manager, customer marketing, told SN.

During the promotion, a swipe of the Ukrop's Valued Customer card generated a coupon giving the consumer -- considered by Ukrop's to be one household, in this case -- one free pound of bananas. During the rest of the year, the shopper kiosk issues only one set of coupons daily per household.

Ukrop's publicized its "Go Bananas!" promotion by including front page mentions in the store's weekly circular, and banners and banana recipes on the retailer's Web site; sending direct mailers; positioning shelf talkers next to items that complement bananas, such as cereal, milk and peanut butter; and erecting freestanding posters in all the stores.

With its keyboard, swipe area, touch screen, well-lit backdrop and instructional display -- the "Go Bananas!" event also saw promotional posters positioned by the machines -- the shopper kiosks currently stand near each store's entrance area; however, Ukrop's is considering situating them more deeply within the store, so that customers can access the machines when they're more settled with their shopping carts and children, Adcock noted.

Customers spent 8% more at Ukrop's six months after they started using the shopper kiosk than before they started using it, compared with a control group, according to the kiosk's manufacturers.

Bellevue, Wash.-based Meals.com, a subsidiary of Coinstar, designed the shopper kiosk -- officially branded to the retailer as "Ukrop's Shopper Kiosk" -- as part of a cooperative effort with Ukrop's.

"Our shopper kiosk results in a 1%, chainwide, incremental sales increase, which equates to a $10,000 per-store incremental net profit," said Peter Barbaresi, an executive vice president at Meals.com, who noted the numbers are based on proprietary point-of-sale analysis.

The predictive modeling techniques inherent in the shopper kiosk's software -- which Meals.com continues to program and maintain for Ukrop's -- uses a customer's prior purchasing history, specifically point-of-sale data, to determine the best coupon offer for each customer.

These predictive techniques are what make the shopper kiosk a more efficient marketing tool than, say, coupons in a Sunday circular that reach people who may never have bought the advertised product previously or expressed prior interest in the product, Barbaresi said.

The shopper kiosk also differs from other swiping programs that generate coupons after the customer has completed checkout.

"We wanted swiping to be a 'pre-shopping' experience, where customers got their rewards and information before they shopped," Adcock said.

Although Ukrop's rolled out the shopper kiosk a year ago, the retailer waited until Meals.com fine-tuned the system before deciding to "Go Bananas!"

"We wanted to increase our customer-base penetration so we could avail ourselves of the psychological insights that go into rewarding and targeting customers," Adcock said, alluding to Meals.com's staff statistician who analyzes customer behavior based on electronic information stored in the UVC card.

In a typical rundown, with every swipe of a customer's UVC card, the shopper kiosk responds three ways. First, the customer receives a printout of his or her UVC "Rewards List," which consists of in-store specials that typify past purchases by that customer -- in other words, "specials" that reward that customer's behavior.

Second, the customer receives a coupon worth between 25 and 75 cents off a particular category of merchandise that the customer has specifically bought in the past. If the person is a "very best" customer -- either because of amount spent or frequency of shopping -- he or she receives a coupon with more monetary value.

Third, the customer receives information about promotions. Past promos have included "Turkey Points," an opportunity to earn points based on dollars spent toward a free bird; and vouchers for free tickets to local college football opening games.