Grocery chains intensify loyalty efforts

K-VA-T, a regional chain of grocery stores in the Southeast, has started implementing Retalix Loyalty software to manage the latest phase of its customer loyalty program.

The 106-store chain was already using Retalix StoreLine and HQ software to manage point-of-sale and price management, but still put out an RFP to about 20 vendors before choosing Retalix Loyalty. The new system, which will manage the Food City ValuCard Baby Club, Kids Club, Pet Club and Wine Club programs, delivers targeted, personalized offers to consumers and tracks offer performance in real-time.

“Our stores serve a growing population base of nearly 1 million households in a competitive market, so it’s important to be able to quickly design and execute scalable and robust marketing and promotion campaigns,” said Paul Widener, VP of information services at K-VA-T, in a statement. “The Retalix Loyalty solution will enable us to do more creative and relevant communications and promotions in the store, at the fuel pumps and online.”

Retalix Loyalty also manages the stores’ customer database, which contains demographic information as well as dynamic information like points accumulated. With these data, K-VA-T will be able to send targeted e-mails or direct mail to specific customer segments.

Shoppers must opt in to the K-VA-T loyalty program.

“Grocery folks have been doing loyalty programs for 10-plus years with mixed success because they’re offering the same thing as everyone else: swipe your card and get lower prices,” said Bob Smith, product manager for Retalix Loyalty. “Now, retailers are looking to get more from their loyalty systems because people will collect membership cards and shop at whatever store is most convenient, so it’s not really building loyalty. This system is moving from the current environment, where everyone gets the same treatment, towards an airline miles model, where the more points you have the more perks you get because you’re a more valued or loyal customer.”

In the past few weeks, a number of grocery chains have launched amped-up loyalty programs. Last week, Kroger unveiled plans to offer free cell phone minutes to KrogerPlus card and Kroger-branded MasterCard users, based on the amount they spend at Kroger stores. Earlier in May, Randalls Food Market, a unit of Safeway, partnered with mobile marketing company Cellfire to offer mobile coupons that linked to customers’ loyalty cards.

Retalix, which launched in Italy two years ago, has signed five grocery and convenience store clients in the US while also expanding across Europe and Asia. Smith describes the company’s average client as innovative, regional chains with 100 to 150 stores.

Smith estimated that it would take about six months to get Retalix up and running in K-VA-T stores. The grocery chain plans to have Retalix Loyalty in all stores in time for the holidays.

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