Kroger Targets Coupons with Customer-Loyalty Data
Even through a recession US consumers redeem just 1-3% of paper coupons, but up to half of the coupons that Kroger sends to its customers are redeemed—because it uses a data-mining firm it part-owns to target specific customers, writes the Associated Press.
Kroger, the largest US traditional grocery chain, owns a share of the data firm, dunnhumbyUSA, and uses it to track and analyze data collected from its 55 million shopper cards.
In a tight economy, “the question is how can you be absolutely certain that you’ve got the right offers in the right places?” Simon Hay, CEO of dunnhumbyUSA is quoted as saying.
British megaretailer Tesco is the majority owner of dunnhumby, which it has deftly used to expand—and is forecast to become the world’s No. 2 retailer by 2012, surpassing France’s Carrefour.
Kroger uses dunnhumby to guide promotions, pricing, placement—even varying stocking patterns from store to store.
“This level of personalization is a direct link to our customers no other US grocery retailer can replicate,” David B. Dillon, Kroger’s chief executive, told investors Dec. 9.
Kroger invested in dunnhumby and five years ago formed dunnhumbyUSA, which also has as clients Coca-Cola Co., The Home Depot Corp., Procter & Gamble Co., Macy’s Inc., General Mills Inc., and Kraft Foods Inc.