Does anyone know what supermarkets (and many other retailers) do with all the data collected from using their club/reward cards? They claim the data is not sold, traded or used for any nefarious purpose. Why then are they selling product to card holders for 1/2 or even less than they sell to non-cardholders?
I just found out that if you register a Ralph’s card using the internet you can complete registration after skipping the page that asks for address phone number ect
I’ll bet they don’t wan that generally known to the public!
Buying patterns give them data about how to arrange their goods so that people will be likely to end up buying more than they had intended to.
I don’t think they give the substantial discounts of these sales in exchange for people using the card. I think they would otherwise have normal sales, but instead of simply lowering the price generally, they require the card be attached to the sale in order to promote card usage and also to foster a sense of exclusivity or benefit to card holders. If the card-required sale products would otherwise simply by on sale products, then it doesn’t really cost them anything, and not only does this give them huge amounts of market research data, it probably makes the user actually feel better about the process. Ingenious really.
I worked for in systems analysis for the supermarket company that pioneered this concept among grocery chains in New England. We quickly found out that it generated way too much data and overwhelmed us. I got a kick out of looking up what my friends and neighbors had bought but that wasn’t really profit generating for the company and we never sold the data to anyone else. There were all sorts of ideas of what to do with it like targeted coupon distributions and some of that ended up working but when you are looking at that volume of information, you have to pick your battles.
One of the primary benefits to the company itself is hinted at in the term “customer loyalty card”. People don’t want to sign up for and carry around dozens of extra cards so offering them will make some people more likely to favor your stores over another. It is like a little advertisement that you have to keep with you all the time and tend to notice once in a while. CVS pharmacies seems to be doing a good job with this concept from both my professional and consumer experience. I get targeted offers for other things on my receipt when I check out that probably apply to me. Just like any other huge databases, the information isn’t much good until someone figures out a great use for it but then it can be a gold mine. In the information age, any large retailer needs to build up as much information as it can about its customers to use when the opportunity arises. They are generally pretty ethical about it unlike say spammers but the science and art are still pretty young.
They are customer loyalty cards. If your experience is that because you have one of these cards you are treated to special discounts when you shop at their store, you’ll be more inclined to shop at their store again. They don’t even have to advertise all of their card-holder discounts because they know you’ll come back to see what else might be on sale.
They can also use their data to see that card holders are likely to buy pizza dough and pizza sauce, but only when pizza dough is on sale. If they don’t mark down pizza dough, and give it that nice bright “on sale for card holders only!” tag, then neither pizza dough nor pizza sauce gets sold.
I don’t know that they don’t give ANY info to third parties. They may not give your name and address but I do know that, at my store at least, manufacturers coupons get printed out right at the checkout based on stuff I’ve bought previously. Especially for new products from a brand I’ve used previously or products from a competing brand.
(**Shagnasty **posted pretty much what I said…oops!)
From my retail experience, Shagnasty is pretty much right on. They can generate huge amounts of data that can be sliced and diced in millions of different ways. The problems becomes a matter of how to use the data. Also, using the data can get expensive. If you want to do target mailings you have to devise copy, print offers and then pay the Postal Service to deliver them.
In actuality, the retail managers are overwhelmed as it is. They really can’t sit around looking for nuggets in the dirt pile while their bosses are crawling up their asses.
It becomes a pile of data with no particular use. But, as noted, the loyalty factor seems to make it worthwhile.
Anecdote, I was shopping in a supermarket that was in a region I rarely visit. I bought an item that would give me a discount if I had an affinity card. The cashier asked me for it, I said I didn’t have one. He asked me if I wanted one, I said OK. He handed it to me with the application and said “Send it in later.” He scanned the card and gave me the discount. I threw it all out when I left the store. That’s what it is all about.
I implemented a “Frequent Reader” program at my bookstore (it doesn’t use cards–just give your phone number when you come to the register). I did it to encourage people to shop local and be regulars. As Shagnasty said, for loyalty.
I don’t have an ultra-sophisticated data-mining system, so here’s what I’ve done with the data:
I pull reports showing who my top customers are. Every so often, I put on a private event, give away advance reading copies of books, or find some other way to tell them “thanks.”
I didn’t expect this one, but customers will come in and ask what they bought (for example) last December, so that they can make sure they aren’t repeating Christmas presents.
Since I have a record tying those people to their purchases, I can accept returns from those customers without a store receipt.
Use the data to predict how much of a new product to bring in, and in some cases, call the customer and say, “Hey, we’ve got a new _____ coming out next week.”
One interesting use of loyalty cards is that stores can broadcast a recall notice via email to all purchasers of a particular product. Recently I received a notice that some applesauce may have contained glass fragments and that I should bring the jar in for a full refund.
That’s something I’m sure parents would appreciate, especially if used for allergy recalls or similar notices. Not giving your information takes all the usefulness out of this.
I also get special targeted coupons or sale notices.
Loyalty cards don’t have to be sinister machinations from evil corporate giants, you know. Maybe you’ve just been hanging around with the wrong crowd.
I’ve always hated those dang cards, and I’ve pretty much refused to ever sign up for them. But our main grocery store just finally got around to implementing a card program recently and I actually like it. The best thing is that if anything you buy goes on sale within 7 days, they automatically credit the difference to your account. So every time we go in, we have at least a couple of bucks sitting there to be applied to our purchase. You can also call them if you have problems with anything you buy, and they’ll just give you a refund onto your account. The convenience is great. And, of course, it also drives loyalty. Not only do we feel like they’re giving us a good deal (I can’t imagine how much this must be costing them), but if we know we have credit on our account, we’re more likely to go back to the store to use it.
They also have a website where you can go and look at your purchase history, etc. It’s the first grocery store card program I’ve actually liked enough to sign up and carry the card around.
In Chicago when Jewel was owned by Albertson’s you used to be able to scan your card into a machine and it it would print out a few coupons especially for you. You’d get cents off of various things based on what you purchased in the past.
It was interesting as the coupons were different from customer to customer but after Albertson’s sold Jewel the discontinued it.
At a level higher than an individual store, you can use the aggregate data to track buying patterns by region, and also to predict them and to negotiate inventory and pricing with vendors.
Cents off deals with the cards can also be used to tweak inventory levels if necessary. I usually figure that is what “unannounced specials!” are about - “Damn, we gotta get rid of this shit fast, how can we drive up the demand?”
Given that every such card I’ve come across allows you to use your phone number in lieu of possessing the physical card, I’m not sure how well this works any longer. My wife signs up for all these cards and, when I’m at any given store, have about a 75% success rate of just entering my number and finding out we have an “account” there. I don’t know if that was the story back in the day though when the cards came out.
As a consumer I find them annoying and insulting. I don’t feel “special” because I get the sale price that everyone should be getting if they didn’t have the program, and I am annoyed to have to carry around the cards or enter my phone number.
The rebate for what was on sale within 7 days is a good idea, but please don’t insult my intelligence with the idea that I am in a “club”.
I’ve noticed that the printed-at-checkout coupons I get at Safeway tend to be for products I purchased once or twice in the past, but haven’t purchased in a while. It’s like they’re saying, “Hmm… you tried it but didn’t like it enough to keep buying it regularly. Here’s a discount - give it a second chance!”
Bizarre. Why would you think people who use the cards think they’re “special” or in some kind of club? I use them because they save me a few bucks. Why would I want to pay more when I can pay less?
As a consumer I find them annoying and insulting. I don’t feel “special” because I get the sale price that everyone should be getting if they didn’t have the program, and I am annoyed to have to carry around the cards or enter my phone number.
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Every 3 months I receive vouchers to the value of between £15- £20 from Tesco.
I noticed that Giant Eagle was giving me register coupons for Kotex on a kind of semi-regular basis. :dubious: I e-mailed them and asked **“Just what is it you are keeping track of here?” **
They stopped giving me those coupons.
Back when Farmer Jack still existed (part of the A&P group, which does still exist, just not in Michigan as far as I can tell), it was the most awesome supermarket there was (my criteria has to do with produce and meat and cheese). They used the stupid cards, too. Then they went bankrupt, and stopped the card program, and came out of bankruptcy, and decided to start using the card again. I was outraged at the re-introduction of the cards, and wrote to customer service, who did respond, and indicated that the customers demanded the card.
Almost all of the register coupons I get are for stupid stuff I’d never dream of buying, like frozen pizza or frozen vegetables that already have some sauce of unknown origin. Why can’t I get coupons for fresh asparagus or salmon from the meat counter?
I don’t understand why you were outraged. If you like the card, use it. If you don’t like it, don’t use it. Why would the mere existence of the program make you not just annoyed or a bit angry, but outright outraged?
The vouchers I get from Tesco aren’t anywhere near that value - I’m not sure if that’s because I buy less than you, or because I live in Rip-off Ireland - but they are certainly the reason I use their loyalty card. If something’s cheaper elsewhere I’ll buy it elsewhere, but if the prices are the same I’ll buy it at Tesco to get more points to get more vouchers. If it saves me money, why not.
And while I certainly don’t want them selling my personal data, I wouldn’t mind it at all if they would use it to send more appropriate offers in my direction. After almost ten years of buying exclusively vegetarian goods (including things like their own-brand vegetarian products), I’d like it if they would figure out I’m not interested in €2 off a sirloin steak or whatever.
The register prints coupons that are being pushed by the manufacturer, not the store. The owner of the coupon brand looks through the data and sees that you like the product but are buying a competitor’s brand. So when you buy that brand the machine is programmed to spit out a coupon that will tempt you to try or go back to the other brand. The store doesn’t care. It gets money from the manufacturer who is paying it for the chance to give out its coupons and it gets the coupon money itself back plus an extra handling change and it gets money from the sale of the item no matter which brand it is.
And that’s why you don’t see these coupons for fresh meat or produce. They aren’t branded and there is no need to pry you away from a competitor.
