Customers Hold All the Cards
By George Anderson
Just about every retailer today (at least it seems) has some type of loyalty/discount card program. Drugstores, department stores, grocery stores, book and music stores, etc.
all offer them and consumers have a wallet, purse or keychain filled to prove it.
A report on the Knoxville News Sentinel Web site, said retailers are really beginning to offer personalized shopper programs based on an analysis of the data they receive
from the cards.
Russell Palk, president of the Tennessee Retail Association said, “It’s solely a way to provide better customer service.”
Even with high profile reports of thieves stealing personal financial information from stores and financial services businesses, most consumers today are comfortable with stores
collecting information based on their purchase histories.
Karl Snyder of Knoxville, who buys groceries at Kroger, Bi-Lo and Food City using each store’s loyalty card, said it’s all about saving money. “There are things that I show a
tendency to buy and if it generates an extra coupon for me at the register, I’m OK with that,” Snyder said.
Debbie Spearman, Kroger’s assistant loyalty manager, said one of the main benefits of the data collected is it helps stores to stay stocked with the products consumers want.
“Not every store is the same and not every shopper is the same,” she said. “It allows us to provide targeted marketing and targeted products to certain stores.”
Moderator’s Comment: How can retailers use shopper cards to differentiate in a market where so many others also offer similar programs? What retailers
have impressed you with their card program? –
George Anderson – Moderator
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13 Comments on "Customers Hold All the Cards"
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As the technology gets better and retailers get smarter about what shopping data means, they should be able to offer increasingly targeted promotions. If you combine that with better customer service in-store, and even personalized customer service for top shoppers, retailers may really be on to something.
What a strange definition of “loyalty” there seems to be in the retail world. Is someone “loyal” because they take advantage of a discount or reward afforded by a customer card? The origin of the word speaks to a “legal obligation.” Clearly that’s not what we have here. The dictionary says it’s a “feeling or attitude of devoted attachment and affection.” That’s not what we have either. Stories where customers have devoted attachment and affection are rare.
I suggest these cards are about nothing more than ‘opportunism.’ When the shopping experience is so positive that we’d shop there, discount or not – then we’re onto real loyalty.
The issue, as I see it, is that retailers are not using the aggregate of information obtained from the cards. I may get a Pepsi coupon when I buy Coke, but the register (and, consequently, the store) aren’t registering, for example, that I never bought soda before and respond accordingly.
Amazon pays attention, in the loosest way, to the genres of books I buy, but not much in the way of specifics. They do not apparently combine information from the variety of stores that fall under the Amazon brand.
The single most important thing retailers can do is pay attention to patterns of buying behavior, rather than in-the-moment behavior.
“But the reality is that I choose my store based on location convenience, assortment fit with my market basket and, to some degree, on perishables quality. But that’s just me. The price discounts I get don’t keep me coming back or send me away.”
Ah … but if you get a surly clerk that insists that you have to have their little card in your fat little fist to get $6 or more dollars off the $16 paper towels, it creates a negative shopper experience. When she cattily responds that she will swipe her card for you just this one time but you have to get your own … it tends to make one not want to return.
I would say, therefore, that the card has created a negative shopping experience and if I can buy my paper towels elsewhere, I will! And I am not even that price sensitive about it!
It would seem that these comments on the value of supermarket card programs reflect their observations on some or most, but would not apply to all card programs.
I have heard others estimate that about one-third of retailers have effective CRM programs that effectively target and deliver meaningful value to the customer. Perhaps these commentators live and shop in markets served by the other two-thirds.