Driving Consumer Loyalty

Apr 09, 2003

By George Anderson

All retailers are on looking for the magic formula to ensure consumer loyalty.

A research study from the UC Davis Center for Advanced Studies in Nutrition
and Social Marketing says that, for inner-city consumers, the answer may not
lie in loyalty marketing programs but in transportation services.

Supermarket Shuttle Programs: A Feasibility Study for Supermarkets Located
in Low-Income, Transit Dependent, Urban Neighborhoods in California
Numero Uno Market and Ralphs free customer shuttle programs’ success in reducing
shrink, attracting shoppers, increasing shopping trips and growing average expenditures.

One Numero Uno store owns nine vans that transport approximately 2,300 passengers
a week. The store is among the top-grossing supermarkets in the Los Angeles
area. The total cost of the van program is less than 1 percent of the store’s
gross revenues according to the report.

Ralphs on West Adams in Hollywood has vans running daily from 9 a.m. to 8 p.m.
Any customer with a store receipt for at least $25 gets a free ride home.

Terry O’Neil, director of public relations, Ralphs Grocery Co. “credits the
shuttle with significantly reducing shopping cart loss at the store, and with
generating good will among customers.”

“If you walk and you’re buying for a family, you can’t get your groceries home
intact and fresh. We offer the shuttle as a customer service to these shoppers,
and many of them have thanked us.”

Peter Larkin, president of the California Grocers Association said, “Some of
our members already utilize shuttles in their businesses and have found them
to be successful and profitable. This study provides further information and
guidance for those who are interested in expanding the concept into their businesses.”

Moderator’s Comment: What are your thoughts on UC Davis’
research findings?

It is going to take an awful lot of discounts from a retailer
without a shuttle service to overcome the advantage of a free ride home.
Anderson – Moderator

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