TOP Food & Drug Tests Enriched Rewards Card

Discussion
Apr 07, 2009

By Tom Ryan

TOP Food & Drug, a banner operated by Haggen out
of Bellingham, WA, has been testing a new loyalty card program that it
hopes provides more than just discounts to its best shoppers. Employing
RFID technology, the card links to an internet-based system to offer recall
notifications as well as refunds in the case of price-drops following a
purchase or for spoiled items.

Emily Mallahan,
director of TOP development at Haggen, told RFID
Journal
that the chain had not previously used a rewards program because
it found such cards primarily provided discounts at the point-of-sale.
It was seeking a more “personalized” approach for its customers.

“This stems from wanting to add value,” she
said. “We wanted to establish an open communication with our guests.”

Accelitec’s president, Peter Gruman,
said the system so far offers three key elements:

Low-price guarantee: Customers
are automatically credited whenever an item’s price is reduced within seven
days. The credit is applied to the shopper’s next purchase cost.

Automatic refunds for spoiled product: For instance, if a customer discovers that a gallon
of milk had gone bad, she can call the store, provide her card ID number
and receive a credit automatically.

Automatic recall notification: Customers are sent an alert to a recalled
product either by phone, text message or email.

The card also enables customers to manage
their shopping experience online, including inputting a shopping list and
tracking previous purchases. Mr. Gruman noted
that if the store installs a monitor and RFID interrogator at its entrances,
a customer could access her shopping list upon arrival to learn where needed
items are located and which brands are on sale.

Four stores have been testing the cards since
last fall. Once the test is completed this spring, it may be rolled out
to its remaining 14 locations. Approximately 60 percent of the four TOP
stores’ customers have signed up to use the card since September, with
several hundred new applicants added each week. “We feel the program
has been very successful,” stated Ms. Mallahan.
“I think we’ve just scratched the surface as to what we can do with
it.”

Not surprisingly, the card does have some
discount component. TOP initiated a promotion in which the retailer sent
some of its customers an email stating that if they visited the store
within 48 hours and spent $25, they would earn an extra $5 discount at
the point of sale.

Discussion Question: What do you think of TOP
Food & Drug’s effort to introduce a loyalty card offering amenities
beyond POS discounts? Which added feature do you think provides most
value to customers? What else could the card be offering?

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11 Comments on "TOP Food & Drug Tests Enriched Rewards Card"


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Doron Levy
Guest
Doron Levy
13 years 1 month ago

Loyalty programs that offer just discounts are not loyalty programs. There has to be more to offer the customer to get them to sign up. Most things I’ve seen are newsletters that are specific to the industry. Grocery stores are at an advantage because they could literally fill 20 pages with recipes and other resources that people use everyday.

Now I must say, I love TOP’s idea. Those extra services will differentiate themselves from pretty much everyone else at this point in time. Recall notifications are important and customers will appreciate automatic alerts in this day and age. Price guarantee? I love it! Now there is an excellent customer service gesture. Buy it and don’t worry if it goes on sale. It’s a no brainier. The spoilage refund is probably the best add-on I have seen so far. This will really build confidence and get customers coming back especially if all the credits are loaded onto the card.

Max Goldberg
Guest
13 years 1 month ago

This is an interesting gimmick. The most valuable feature might be the low price guarantee, but overall, the program should be more robust and offer consumers more features. One feature should be a consumer’s ability to load electronic coupons on the card at home and have the discount automatically applied at the store. Or how about connecting the card to a consumer’s preferred method of payment?

Phil Rubin
Guest
Phil Rubin
13 years 1 month ago

Any time a retailer gets beyond simply equating a “loyalty card” with discounts, it is a step in the right direction. When the card proposition systematically provides not only the value guarantee (yes, a price discount mechanism) but also begins to impact and create an easier shopping experience, it is taking much larger steps.

Integrating customer communications (e.g., the $5 off $25 offer) is another important step in connecting what the customer does in-store with relevant communications that will drive incremental visits.

This is a striking illustration of the fact that consumers will opt-in for RFID tracking if the merchant delivers the right value proposition around it. Well done!

Liz Crawford
Guest
13 years 1 month ago

This is certainly a step in the right direction. Personalizing other benefits and amenities could be next. Imagine discount tickets to the art opening cocktail hour for singles. Or discounts for the nearest water park, for families with children under 15.

I love the GEO part of it too. Could this work outside of the store by placing “messages” in other places the shoppers may visit? Very cool. I believe this may manifest differently on cellphones in the future.

J. Peter Deeb
Guest
13 years 1 month ago

This effort sounds exactly like the customer interactive proposition that loyalty cards were designed for originally! Kudos to Haggan for having the foresight to offer more than everyday discounts to their customers.

The possibilities for customer communication, tie-in-marketing opportunities with other business partners and other yet-to-be-discovered programs are endless. I hope Haggan finds a way to prove there is an ROI on what can be a large resource investment.

Len Lewis
Guest
Len Lewis
13 years 1 month ago

Very interesting stuff and a way to get beyond the usual percentage-off discount. But if you really want to create long-term loyalty, shouldn’t you be doing these things for all shoppers?

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
13 years 1 month ago

Other retail outlets that have loyalty programs should take note. TOP is clearly ahead of the curve and their shoppers will benefit. Not having to worry about getting the best price each week builds incredible trust between TOP and their shoppers. The recall notification is also a strong benefit that builds shopper confidence.

Future benefits could incorporate savings on prescriptions since loyalty for that department is extremely high. It would also be interesting to see if their system could review a consumer’s shopping list and offer a recipe that includes a few additional items, increasing the shopper’s basket. Nice work TOP!

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
13 years 1 month ago

I’m still unclear why this really cool system can only be delivered via RFID. What does that have to do with it, and is this system inherently limited due to the relative infancy of RFID? Why can’t these services be delivered with universally-available technology like bar codes? These TOP services have been referenced as “possibles” for decades via conventional loyalty programs. Loyalty guru Brian Woolf has been predicting and recommending these and other advanced services since before the term “CRM” was coined. Unfortunately, few if any retailers have had the vision to offer them. Contrary to the implication of this discussion topic and the referenced CPG News article, “loyalty program” does not have to mean “discount program.” Conventional programs have not been limited by pre-RFID technology, but by weak-kneed retailers.

Cathy Hotka
Guest
13 years 1 month ago

Kudos to TOP for helping customers avoid that cat-and-mouse game of finding the lowest price! Let’s hope that this new concept spurs other retailers to examine ways to provide value-adds to their best customers.

Camille P. Schuster, Ph.D.
Guest
13 years 1 month ago

Definitely a step in the right direction. I look forward to hearing their assessment of the results and plans for the future.

Ralph Jacobson
Guest
13 years 1 month ago

I agree with the others here–that is definitely a great advantage and differentiator over the competition. I get a little nervous with the automatic refund for lower prices, though. That is breaking marketing rule #1; don’t give discounts that the customer didn’t ask for. However, that could be said for most loyalty programs. You get to the POS and the cashier tells you that you saved $20 by using the card. Hey, you would’ve bought most of that stuff anyway.

Bottom line, I like the program. It could/should be incorporated into the customers’ cell phones. Especially those with GPS. The stores could send custom offers via text messages to the customer when they approach a TOP store or even one of their loyalty partner stores.

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