Frequent Shopper Programs Short Essay

Topics: Supermarket, Grocery store, Retailing Pages: 2 (421 words) Published: April 10, 2001
Frequent Shopper Programs
Card Programs, or Frequent Shoppers Programs (FSP) are increasing in supermarkets around the country. FSPs are bringing more consumers into the grocery stores more often and studies show that these cardholders are more likely to spend than non card members. One study shows that over 80% of customers shop less than once a week in the same store. Most consumers have low customer loyalty, so retailers are looking for a way to reward them in order to get them to continually shop in their stores. Retailers are looking for a way to increase their profits by having repeat customers. Studies show that cardholders account for 75% of the stores sales. Main goals of using a FSP are to retain customers, have them visit frequently and spend more money. Targeted demographics for card programs consist of larger, upscale, educated families of three or more. Studies show that the top five reasons for a consumer to choose a retail store are due to: 1). Convenient Location

2.)Store Deals
3.)Frequent Shopper Programs
4.)Assortment of Merchadise
5.)Store Cleanliness
Consumers who have cards spend 4xs more each transaction than a non card member. The average non card holding consumer in the store spends $7 versus a card holder who spends $28 per transaction. By using frequent shopper programs, retailers can keep a database to segment their customers by their buying habits in order to better market themselves to the needs of their customers. Databases can help with marketing efforts geared at differentiating themselves from competitors by segmenting customers by how often they shop, how much they spend, and what their shopping patterns are. Grocery retailers are seeing benefits from these programs but there are some glitches to joining one. FSPs are expansive programs to initiate. The program costs anywhere from $15,000 to $20,000 a year. Retailers must consider whether their ready to initiate a program and monitor the database in...
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