Free email address extractor. Not sure of the exact date but sometime in the early 90’s a group of folks at Jewel (or The Jewel as they liked to call themselves) in the marketing department got together and crafted a strategy that would change the game in the food and drug industry. They created the first “loyalty” program in food and drug. They had good reason, you see grocers were having a bit of a struggle, they were under attack. It seems everyone from Home Depot to Walgreens, to WalMart was getting into selling food in some form or another. The industry was just starting to notice how big WalMart was getting. There were a ton of “new” stores down in Texas going up called Super Centers, full of the usual WalMart fare but also a huge addition, a full service grocery store to boot.
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And the pricing strategy scared the heck out of them. If you based the retails at WalMart on industry standard costs the folks in Bentonville were selling just about everything at a loss. Supply Chain efficiencies were Wal-Mart’s forte but they weren’t that good. They had to be getting a lower cost from the same suppliers that were supplying the industry and even then it appeared that WalMart was willing to sell groceries for convenience and the carrot to get the folks into the stores. No one knew the plan but it was obvious that if the industry didn’t do something they’d be priced out of business when WalMart came to town. It’s all about the card.no the customer, no the card, I’m confused?
Grocers were already working off horribly low net margins, where the heck were they to get the money to combat the onslaught from Bentonville. Well the folks at Jewel came up with the “card”. They needed to know their customer better, and getting them to use a card at their stores and tell them something about themselves seemed a great way to establish a solid relationship. A relationship that they would / could take advantage of when the big W showed up in their back yard. A relationship that Jewel could call on to keep it’s loyal following from jumping ship for lower pricing.
Trouble was how to get the customer to sign up. They kicked around several ideas and landed on promotion or discount. The king of fighters 98 super plus games online. In order to get the “ad” price the customer must have a card, that’ll guarantee adoption. It certainly did, everyone had a card. And then Dominic’s and other Chicago operators adopted the same process and soon everyone in the Chicago area was using discount cards to entice shoppers to come through their doors. They even reduced the size of the card so you could hang if off your key chain.
It was nothing to see a customer with 5 or 6 cards hanging from their chain. It was also standard practice for the checker to have a “dummy” card at the register in case a customer didn’t have a card to ensure that no one got out the door without the ad price. What was intended to entice the customer to become a loyal Jewel shopper turned into a very expensive way to communicate and create discounts for the shopper. Awash in Data But they still had the customer data to analyze right? Oh they had data, tons and tons of data. You could call it a data tsunami.
So much that they couldn’t really find the shopper in there. They had a good view of what was selling but a horrible view into who was buying. BI was not a strategy at the time, it was a dream. Tera Data sold millions of dollars of nodes to the industry to try and help them get at that data. Micro Strategies, Business Objects, and Cognos were used to report on the data but it was still locked in the vaults and was not providing the value expected.
Even more importantly it certainly did NOT create that relationship with the shopper. The idea swept the nation; every major national grocer and drug store adopted the process. Regional players either adopted the “card” or they didn’t and used that fact to differentiate themselves. It was not uncommon to see advertisements for regional players touting the fact that everyone got the low price. But all of them, including Wal-Mart, were trying to figure out how to get the data around Mrs. Jones and what she wants, and a way to bring all the Mrs. Jones types together and communicate directly with them.