To Target Promos, Follow Credit Card Trail

Articles
April 22, 2010

Few large-scale retailers, if any, have more insights than supermarkets into what their best customers buy.

Few large-scale retailers, if any, have more insights than supermarkets into what their best customers buy.  Much of it goes to waste, however. Few would say the grocery channel excels at turning their unique close-up views into compelling programs that attract consumers and build category performance.

Ironically, supermarkets may do better by taking a step back from the burden of individual data mining, and targeting promotions on a different basis. Rather than look at specific brands and items people buy in their stores alone, retailers could simply make offers based on where people have been shopping recently. The idea is simply to build traffic—and this seems a valid premise today with so many shoppers switching stores and splitting up trips in order to save money. 

How to target and deliver the offers? Monthly online banking statements include credit and debit card transactions, and show precisely the stores visited, when, and the amount spent.  Want to reward a customer that visited you five times in the past month and spent $300 or more? Post a percent-off reward on the statement page or on a click-through. Want to dissuade someone from going to your closest competitor? Offer a different incentive, perhaps one that steers the customer to your premium private label.

Better still, The Lempert Report suggests using the opportunity to enhance quality of life with healthful eating tips, easy-to-prepare recipes, or a free consult with the store’s nutritionist or dietitian. 

Key to making this happen is a relationship with a bank or multiple banks serving customers in your trading area (many supermarkets already have in-store branches or kiosks). A company called Cardlytics has the technology and relationships with a growing body of financial institutions to link promotional offers with electronic transactions on online bank statements  

An Ad Age account told of how 140 McDonald’s eateries in Houston offered customers 10% cash back on their next bank statements. Among people who had eaten fast food in the prior three months, but not at McDonald’s (according to their e-transactions), 19% converted. The heaviest-spending fast-food customers overall converted at a 60% rate.

We like the stealth aspect of this promotional tactic. And we like its potential ability to engage customers while money is on their mind, and while they might be planning their next trip to a supermarket.