UKROP'S USES CARD DATA TO ANALYZE ITS SHOPPERS

DENISE ZIMMERMAN

HOUSTON -- Ukrop's Super Markets, Richmond, Va., has assembled a comprehensive customer data base containing behavioral "snapshots" of 293,000 households whose purchases represent 87% of chainwide sales.

The 23-store chain is using the information collected through its card-based frequent shopper program to track and study customers' shopping patterns and develop targeted marketing campaigns for individual households.

Although Ukrop's was among the first retailers to launch a frequent shopper program in 1987, the chain only recently began gathering customer-specific data at the point of sale.

Scott Ukrop, director of marketing, detailed the wide array of data collected through the Ukrop's Valued Customer frequent shopper program during a presentation here last month at the MarkeTechnics convention sponsored by the Food Marketing Institute, Washington.

"We know that the top 10% of our customers account for 40% of our total sales and visit our stores 1.8 times per week. We know that 58% buy Nabisco products," Ukrop said. The chain also analyzes attrition rates, average transaction size and frequency of visits to specific store departments on an ongoing basis.

Through a software program called MarketExpert developed by RMS, Stamford, Conn., Ukrop's tracks transactions and analyzes them according to "behavior groups."

"These behavior groups include total dollars spent by each household in each store, department, category, subcategory, all of the manufacturers' products by lifestyle items like low-fat items, or children's items; by UPC -- basically however we wish to break it down," Ukrop said.

Gathering such information

allows Ukrop's Super Markets to view shopper segments, and develop precise marketing programs, according to different criteria.

During the month of January, for example, the average customer enrolled in the frequent shopper program spent $148 in Ukrop's stores. By comparison, customers whose total purchases ranked among the top 10% spent on average $471 during that same period, with a monthly range of $350 to $3,000. "On the other hand," Ukrop continued, "the bottom 10% spent an average of $8, with a range of 50 cents to $14.50 for the whole month.

"We can now see past these averages and begin to see the impact different sets of customers have on our business," and develop marketing strategies accordingly, he said.

Household-specific shopping data is put to work in newsletters sent out regularly to the 293,000 active cardholders enrolled in the Valued Customer program.

The newsletters contain coupons featuring special offers tailored to individual households based on their purchasing patterns. For example, Ukrop said, a diaper manufacturer might offer a free baby blanket to a household that has purchased a predetermined quantity of diapers.

"We were pleasantly surprised to see our customers did not mind receiving different offers than their neighbors. This was a major concern for our organization [because] the idea of treating customers differently ran counter to the way we've always done business," he said. However, "Customers like to be treated as the individuals they are."

Although the frequent shopper program yielded a wealth of valuable data, Ukrop noted it also revealed information that was somewhat discouraging: "We found that 50% of our customers shop, at most, every other week with us and that our attrition rate is much worse than we suspected," Ukrop said.

At the same time, however, "We can use this information to change the direction of these numbers," he added.

Ukrop's also uses its Valued Customer program to evaluate services and solicit shopper feedback. In one promotion, the retailer rewarded its top kitchen department shoppers with a $1 discount off their next kitchen purchase while at the same time requesting suggestions for items to offer in the kitchen department.

"Through targeted research we can get the information we need to serve our specific groups of customers better," Ukrop said. "Not only does this research help us enhance our relationship with customers, but it also shows we care."