ACNIELSEN STUDY: USE OF LOYALTY DATA SPORADIC

SCHAUMBURG, Ill. -- While three quarters of the supermarkets surveyed have a frequent-shopper program, the use of that data in day-to-day decision making continues to be "sporadic." That was a key finding of the ninth annual Trade Promotion Practices Study conducted by ACNielsen here.

ting in the study were even less likely to consider frequent-shopper data. Fifty-four percent responded "never" and 34% said they "occasionally" use the data for daily decision-making. Only 5% said they "frequently" use the data, and none responded that they always use the shopper-loyalty information.

There were 21 retailers and 86 manufacturers participated in the study.

Other findings:

Top reasons retailers cited for offering a frequent-shopper program included induce customer loyalty (100%); able to target key consumers (93%); increase basket size (86%); and induce customer purchase frequency (57%).

Manufacturers' objectives for participating in a frequent-shopper program include better use of trade funds (73%); increase brand sales (61%); able to target key customers (48%) and increase brand loyalty (32%). Fifty-three percent of manufacturers said they participate in frequent-shopper programs because it is required by the retailer.

While category management is one of the most important trade promotion practices for both retailers and manufacturers, the two sides use the practice for very different reasons. When asked why they practice category management, manufacturers cited the ability to influence decisions on their categories (87%) and the positive relationship it helps them build with retailers (71%). Retailers noted the ability to identify new opportunities (91%) and target key consumers (81%). Information-gathering and communications systems -- along with analytical software -- play key roles in effective information sharing.

Robert Tomei, senior vice president of marketing for ACNielsen in the United States, said, "It is noteworthy that the No. 1 impediment to category management cited by retailers -- with agreement from manufacturers -- was a lack of clear, common objectives between retailers and manufacturers. Category management, by definition, requires a close working relationship between retailers and manufacturers. Clearly, there is a need to grow this relationship."

Less than one-third of all retailers participating in the study indicated that they share their frequent shopper data with all or most manufacturers. Fourteen percent of the retailers said they are sharing data with all manufacturers, and 14% are sharing data with most manufacturers. Thirty-six percent said they share data with a few manufacturers, and 21% said they are not currently sharing data.

When manufacturers were asked about the willingness of retailers to share frequent shopper data, 22% said retailers "frequently" share data, while 57% responded "occasionally." Eighteen-percent said retailers are never willing to share frequent shopper data.