Wednesday, August 10, 2005
Grocery Store Cards
While I'm wondering aloud, what's up with special "club cards" at grocery stores? Sure, they offer you additional savings on certain items in the store, but we all know they're really just a way for the grocery store to monitor your shopping habits. Every time you give them the card when you check out, they have your name, address, and everything you buy. It's a lot of information they're collecting.
But the problem is, I don't see where any grocery store actually does anything with all that information.
I mean, you'd think they would look to see (or rather, have a computer look to see) what items I buy a lot of, and then mail me coupons for those items, good only in their grocery store. That would ensure that I would keep coming back to their store, and not to their competitors, because they offer a discount on the items I like the most. But despite the fact that nearly every time I go to the grocery store I get Life cereal, orange juice, and a particular brand and flavor of yogurt, I've never received such an offer.
They can't just be sitting on the information. What good would it do them? They already know how many boxes of Life cereal they sell as a store. The club cards allow them to see who is buying all the Life cereal. When they have the power to see that it's me, shouldn't they do something about that?
But the problem is, I don't see where any grocery store actually does anything with all that information.
I mean, you'd think they would look to see (or rather, have a computer look to see) what items I buy a lot of, and then mail me coupons for those items, good only in their grocery store. That would ensure that I would keep coming back to their store, and not to their competitors, because they offer a discount on the items I like the most. But despite the fact that nearly every time I go to the grocery store I get Life cereal, orange juice, and a particular brand and flavor of yogurt, I've never received such an offer.
They can't just be sitting on the information. What good would it do them? They already know how many boxes of Life cereal they sell as a store. The club cards allow them to see who is buying all the Life cereal. When they have the power to see that it's me, shouldn't they do something about that?
Comments:
I can probably shed a little more light on this subject, since I am in the business. I do IT work for a grocery store (who doesn't use loyalty cards). There are a couple things that consumers may not know about how loyalty cards are used.
First, unless it is specifically mentioned on the application form, stores can sell your purchase habits to market research groups to get extra income. It is my understanding that they cannot sell your name, phone, or street address. But they can sell your zip code and all of your buying habits. So a store may not use it specifically but they are still gaining from the card.
Matt, as to your comments about getting coupons. There are a couple reasons that may not happen. First, it is very expensive to do custom marketing in the grocery business. Grocery stores already operate at very slim margins. It costs quite a bit to send specific coupons to specific customers. With over 35,000 items in a store it can get complicated.
If a store does decide to send coupons, it will probably not be for your Life cereal and favorite yogurt. They know you buy those every time you come, so why would they give you a coupon? (Yes it might make you come back to their store but you have already come a few times so there must be a reason you returned) You would probably get a coupon for the new Vanilla Cream Frosted Mini-Wheats and the new Dannon Drinakable Yogurt. The vendors are trying to push new products.
One thing stores will do is try to get customers back to their stores. Say you use your card every week for 2 months and then there is no activity for a month. A store would then make an effort to send something to get you back in the store.
One last way the info is used. Instead of market to individual customers, they will use the data to change store layouts and decide sale items. So if many people like Life and yougurt, they will put them closer together in the store. Or add more varieties of Life and yogurt. Or even put them on a special price more frequently.
Probably more info than you wanted, but that's what is blog is for right?
First, unless it is specifically mentioned on the application form, stores can sell your purchase habits to market research groups to get extra income. It is my understanding that they cannot sell your name, phone, or street address. But they can sell your zip code and all of your buying habits. So a store may not use it specifically but they are still gaining from the card.
Matt, as to your comments about getting coupons. There are a couple reasons that may not happen. First, it is very expensive to do custom marketing in the grocery business. Grocery stores already operate at very slim margins. It costs quite a bit to send specific coupons to specific customers. With over 35,000 items in a store it can get complicated.
If a store does decide to send coupons, it will probably not be for your Life cereal and favorite yogurt. They know you buy those every time you come, so why would they give you a coupon? (Yes it might make you come back to their store but you have already come a few times so there must be a reason you returned) You would probably get a coupon for the new Vanilla Cream Frosted Mini-Wheats and the new Dannon Drinakable Yogurt. The vendors are trying to push new products.
One thing stores will do is try to get customers back to their stores. Say you use your card every week for 2 months and then there is no activity for a month. A store would then make an effort to send something to get you back in the store.
One last way the info is used. Instead of market to individual customers, they will use the data to change store layouts and decide sale items. So if many people like Life and yougurt, they will put them closer together in the store. Or add more varieties of Life and yogurt. Or even put them on a special price more frequently.
Probably more info than you wanted, but that's what is blog is for right?
Duh. I know I have a friend in the grocery business. I should have just given you a call.
So what you're saying is: They don't do this to benefit ME? Phooey.
Post a Comment
So what you're saying is: They don't do this to benefit ME? Phooey.
