Firm Sees Loyalty Program as Data Magnet

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Shoppers Drug Mart is bracing itself for an expected onslaught of customer data following its launch of the Shoppers Optimum Program, a new customer loyalty program available at its 820 stores throughout Canada.

Shoppers Drug Mart, which generates 300 million customer transactions yearly, expects the program to attract more than 5 million active members. It is estimated that each of these members will use their Optimum cards at least once a month.

"Price, convenience and service were once enough to attract and retain customers, but in today's competitive environment we want to offer our customers more," said David R. Bloom, chairman/CEO of the Toronto-based pharmacy chain.

The program is free and lets customers collect points with nearly every purchase they make, including prescription drugs, except in Newfoundland.

Each dollar spent earns 10 points, and customers can begin redeeming points for discounts on transactions after accumulating more than 3,000 points. Reward point totals are calculated automatically at the cash register and printed on the customer receipt. Discounts range from 20 percent to 100 percent of the cost of the item being purchased.

Optimum members can accelerate their point accumulation by buying products with bonus rewards attached. Each week, several hundred products will be designated to carry bonus points. In addition to benefiting the customer, this feature of the program has the side effect of boosting sales of the products involved. Under the terms of the program, outside product suppliers can purchase blocks of rewards points to use in the promotion of their brands.

Neil Everett, Shoppers' senior vice president of marketing and communications, said the company is amassing customer e-mail addresses and anticipates that it will collect 1 million by Christmas. The e-mail addresses will be used to communicate directly with Optimum members and to offer targeted product promotions and healthcare information, he said.

Three years in the making, Optimum is an extension of Shoppers' Healthwatch program, through which the company dispenses information and advice to its customers about diseases and health problems.

The idea to create the loyalty initiative has its roots in Shoppers' Cosmetics Club, a program introduced in 1996 to promote repeat purchases in the cosmetics department. To become better versed in what constitutes a successful storewide loyalty venture, Shoppers' senior marketers traveled around Europe and the United States inspecting the loyalty efforts of major retailers, such as Boots in the United Kingdom.

Eighteen months after beginning its initial research, Shoppers set up program tests in three cities in different regions of the country: Kingston, Ontario; Halifax, Nova Scotia; and Calgary, Alberta. This enabled the company to test different propositions and strategies with little worry of customer overlap and confusion.

To promote Optimum, Shoppers has launched what it claims is the largest integrated ad campaign in company history. Created by Toronto's TBWA/Chiat/Day, the campaign features TV, radio, print, outdoor, Internet and special events.

The main promotional event involves a team of people traveling from city to city in two Hummer limousines to sign new members.

"People can't miss these cars," said Richard Scheneker, director of the Optimum program. "They're 30 feet long. It's the first time these vehicles have ever been in Canada."

In addition, Shoppers has pledged to match the first 250 million Optimum points collected with donations equaling $550,000 (Canadian) to more than 30 healthcare and community groups across Canada.

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