Smith's Food & Drug Centers will no longer mail "5 percent off" coupons to customers who build up $250 worth of purchases using their "Fresh Values" cards.
But the grocery chain still is promoting the card, which officials say helps consumers save money and aids the store with inventory by tracking customer preferences.Smith's discontinued its experiment with the mailed coupons in March, but it will honor those that have not yet been redeemed. "If you have them, we're happy to accept them, but we're not issuing them anymore," said Marsha Gilford, Smith's spokeswoman.
The coupons were part of an "experimental continuity program" that lasted 12 weeks in some areas and was so successful in Utah that it was extended to 16 weeks here.
"We wanted to test it," Gilford said. "We had a few bugs we needed to work out at the front end. We realized that it gave us an opportunity to correct some of the address information that we had."
The company hired a special temporary employment force to help get the addresses corrected. "That was, frankly, wonderful to do. We now have better and more accurate information," Gilford said.
The updated information also helped customers consolidate cards -- many households found that husband, wife and sometimes teenage children had individual cards, which slowed down the accumulation of benefits.
She said the "Fresh Values" program is popular with customers and will continue to give benefits other than the discounts at the cash register on certain items.
"We have more than 4 million card holders companywide right now with 152 stores. Included in that is more than 1 million in Utah. That's a lot of folks," Gilford said.
"We invested $3 million in reward incentives for people (with the 5 percent discount coupon experiment). We think it was a good investment."
Smith's now plans other rewards for frequent shoppers, including some offered only by the store and others involving third parties. These include, for example, dis- counted admission to Lagoon and a Diet Coke promotion to earn points for catalog purchases.
Some questions were raised about privacy when the program was introduced in 1997, but Gilford said that was not an issue with the 5 percent coupon effort.
"People have really enjoyed the rewards," she said. "It's the best way to reward your loyal customers because they receive a benefit for shopping your store on a more regular basis."
Rodney Sonzini of Kaysville said he likes it when he and his wife, Amber, use their Fresh Values card while shopping.
Why?
His response is quick: "The prices are better."
But for Amber Sonzini, the issue isn't so clear. First, there's the inconvenience of finding the card and the dismay of getting out to the parking lot and wondering if you forgot to give it to the clerk and lost out on potential savings.
"I like how Albertson's does it. They give the sale to everyone," Amber Sonzini said.
She said more troubling is the question of privacy, even though Smith's and other major retailers pledge to keep the data strictly confidential.
"I thought, 'They're keeping track of what I'm buying,' " Amber Sonzini said. "I don't want people to know what I'm getting or how much."
Nonetheless, frequent shopper programs, or customer loyalty programs as they're known in the grocery industry, are big nationwide.
"It's really making a huge impact on the retail market," Gilford said, noting that a recent survey showed that 77 percent of shoppers use their cards when shopping.
A report based on a recent Food Marketing Institute survey said, "The proliferation of frequent shopper programs (FSP) climbed from 28 percent in 1996 to 36 percent in 1998. In addition, 23 percent of respondents plan to implement an FSP by the end of 1999."
The primary benefit that stores offer customers is immediate discounts at the checkout counter, the report said.
It also noted that there are two changes in some of the program benefits: Some stores are offering a chance to earn points that provide free items from the store, while others are giving customers the option of earmarking funds for charity.
The report indicates that the frequent shopper programs appear successful.
"FSP participants visit respondents' stores more often than regular shoppers, and they spend more while there. The average frequent shopper member will visit the store twice a week, compared to once for the nonmember. In addition, the average transaction size for frequent shoppers is $50.23, while non-members spend an average of $46.63 on each transaction," the report said.
The report also notes that privacy is an issue on many customers' minds when signing up for a program.
"Retailers tend not to share with manufacturers or third parties customer-specific data they collect," the report said.