When company spokeswoman Suzi Robinson taps the app on her phone, coupons generated by her shopping history are already waiting. There are some for organic foods because she always buys them for her 4-year-old son, and one for Canada Dry ginger ale because she was recently sick and bought a lot of it. There’s also one for Cheetos, which Robinson seems to find slightly embarrassing. “I have a total weakness for Cheetos.”
There’s something awfully intimate about a supermarket that can essentially tell when you’ve been ill and when you’ve bought junk food. But the company seems to believe people don’t mind sharing data as long as they get information and offers that are truly useful. “Customers give us [shopping] data with the increased expectation that we’re going to use it to make their experience better,” Keptner says.
Besides, research shows the 80 million or so young people that make up the Millennial Generation aren’t particularly fussed about what’s going on with their data. And by the end of this decade, analyst John Rand says, those digital natives will account for more than half of the country’s retail spending.
NOT LONG AGO, Rand was sorting through his mail when he saw a Stop & Shop flier. He didn’t think much of it; the coupons had never seemed particularly relevant to him. “I used to laugh,” he says. “Stop & Shop would regularly send me Purina Dog Chow coupons, and my cats don’t care.”
But something about this flier was different. There wasn’t a single coupon for dog food, yet there were two or three for things he always bought — like the baby carrots he packs in his lunches. “I’ve never seen a coupon on baby carrots come to my house before,” he says, “but I buy baby carrots every week.”
Although Rand can’t say for sure — and Stop & Shop won’t confirm, because it carefully guards its customers’ privacy — he’s most likely been targeted by the most cutting-edge marketing program in the New England grocery industry, and one that might give supermarkets hope in the battle for a greater share of our food budgets in the future.
Customers now have a sea of options to choose from, so the toughest job for a supermarket is often just getting them in the door. To do that more effectively, Ahold USA has been looking for clues in loyalty data about why customers visit and why they don’t. Then, late last year, it began sending each of between 2.5 million and 3 million households mail and e-mail designed to motivate that family and that family alone.
Most of the fliers are “unique to that household and highly personalized based on purchase decisions in the past,” says Keptner. And by choosing the nine coupons each family gets from a much larger pool, the company is able to ensure that “just about each one of the customers have some unique combination [of them].”
Keptner says the ultra-targeted campaigns performed well from the beginning and have gotten even better, though he won’t share specifics.
If the results are anything like what the Kroger supermarket chain has achieved, Keptner has a hit on his hands. Kroger, which was the country’s largest grocery chain before Walmart arrived, began mailing personalized coupons to customers several years ago, according to The New York Times. Now, 70 percent of customers that get the targeted coupons use at least one. By comparison, only 3.4 percent of customers act on promotions included in old-fashioned mass mailings. Perhaps it’s no surprise that Ahold USA plans to continue its program.
Whatever new species of advertising found its way to Rand’s doorstep, it certainly worked. He may be an industry veteran who’s seen it all, but that doesn’t mean he’s any more immune to a good deal than the rest of us. The next time he went to Stop & Shop, he brought his coupons and bought those baby carrots. It felt nice to finally be understood.
GREAT MOMENTS IN LOCAL SUPERMARKET HISTORY
1926: Clarence Birdseye of Gloucester invents the “quickfreeze” process for fish and vegetables.
1935: Sidney Rabb, head of the chain later called Stop & Shop, debuts New England’s first supermarket in Cambridge. The store—which Rabb’s employees had called “Sidney’s Folly”—goes on to gross $2 million a year.
1972: Alan Haberman, a former Massachusetts grocery exec, can’t get an industry committee to settle on the UPC symbol. He treats them to a fancy dinner in San Francisco, then to a midnight screening of Deep Throat. The committee adopts the bar code within a year.
1978: To offer name-brand quality at lower prices, Star Market chief John M. Mugar debuts the industry’s first line of store-brand products, including frozen French fries.Continued...