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LAS VEGAS -- Single-store independent Green Hills of Syracuse, N.Y. is pioneering a new use of biometric payment technology, aimed at targeting its shoppers with individualized promotional offers.
"Grocers go to market using channels that are not really effective," said v.p. Sterling Hawkins, who spoke this week here at the National Grocers Association's technology symposium. "In 1965 Procter & Gamble only needed three 30-second TV spots in order to reach their audience. Today that number stands at 117. Trade promotions are decreasing in effectiveness, as well as are coupons, which are down to a 1.3 percent redemption rate."
He noted that less than 10 percent of Green Hills' customers were buying items that were on the front page of the store's ad flyers. What's more, less than 1 percent were buying products from the inside of the flyers.
"We also see that our loyal customers are receiving a disproportionate amount of our marketing spend," said Hawkins. "The convenient shoppers are receiving much more than they deserve, leaving what little is left over for the loyal shoppers. Added to this, we were seeing a huge amount of customer variance. The top 5 percent of our customers were generating 33 percent of our total sales, while the bottom 30 percent of our customers were generating less than 1 percent. Those best customers are also shopping more frequently -- 127 times a year, spending more each time they visit, and staying with us over longer periods of time."
To address this, Green Hills leveraged its biometric payment system, supplied by Pay By Touch, to provide individual customers with relevant, timely, and differentiated offers to maximize their shopper lifetime value, delivered to the POS with the touch of a finger.
Here's how it works: Green Hills shoppers sign up for the loyalty program as they enroll with the biometric payment system. In addition to their payment options, such as credit and debit cards, they can add the loyalty program to their "electronic wallet."
Each week every customer household receives a set of offers that's customized to them, and when they shop, these offers are delivered to them at the POS when they scan their finger. "There are no coupons, no cards," said Hawkins. "We also have a web-based shopping utility where shoppers can log on and view and manage their shopping list, or print it out at a kiosk in the store using just their finger."
Using the system, Green Hills is able to run multiple reward programs for any one individual, as well as different programs for different individuals. "I may be in the steak club, he may be in the soda club, but we're both in the Thanksgiving Turkey promotion. This way customers are in control of when, where, and how they receive their marketing communications. As such, they can view them by the Pay By Touch system, via e-mail, or on a personalized Web page, and the infrastructure is built to support any digital device that gains critical mass, such as cell phones."
Currently the system is up and running with Green Hills' 200 employees, and is set to go live in just a few weeks.