WEGMANS TO ANALYZE PROMOTION EFFECTS ON CUSTOMER LOYALTY

KIM ANN ZIMMERMANN

PALM BEACH GARDENS, Fla. -- Wegmans Food Markets, Rochester, N.Y., will broaden a pilot program in which it shares frequent-shopper data with manufacturers, including Nabisco and Coca-Cola, in an effort to improve marketing efficiencies.

The second phase of the pilot, which the participants will begin planning over the next several weeks, will analyze the effect of promotional events on customer loyalty. "What we want to do in the next phase is take all the transaction and marketing data we've collected and hook it into a marketing event," said Dave MacLeod, partner with Rosemont, Ill.-based PricewaterhouseCoopers, the coordinator of the project.

The expansion of the program was announced at the Grocery Manufacturers of America Information Systems and Logistics/Distribution Conference held here late last month.

"Our objective is to grow the category, and the more we learn about consumers and how they use brands, the more this data becomes a powerful tool," said Tom DiNardo, manager of merchandising support for the retailer.

The first phase of the project sought to examine purchase information such as brand, flavor, size and price along with the demographics of the shopper, such as age, gender, marital status and number of children in the household. Data from 77,000 Wegmans' frequent-shopper households in the Rochester area was analyzed, representing about 25% of Wegmans' frequent shoppers in that area.

In addition to Nabisco and Coca-Cola, manufacturers participating in the project include Anheuser-Busch, Procter & Gamble, Pillsbury and Kraft Foods. Wegmans is the only retailer participating in the project.

Examining the nuances of customer loyalty will ultimately improve the efficiency of marketing campaigns, a benefit to both the manufacturer and the retailer, DiNardo said. Some customers are loyal to the deal itself, while other customers are loyal to package size or flavor but not necessarily the brand, he noted.

The next step of the project is to take past marketing events and examine how they affected category growth as well as brand growth. For example, data could be analyzed to determine if a cookie promotion increased overall cookie sales by generating new customers, or if it simply enticed shoppers who were already buying cookies to switch brands or flavors.

"Now we want to take a look at how we can drive category growth, armed with that knowledge," DiNardo said.