US Supermarkets Pioneer Customised Pricing
A growing number of food retailers in the US have begun using consumers’ personal data to tailor prices and discounts based on individual shopping habits.
Using customer data amassed by supermarkets via loyalty cards, the ‘enhanced reward programmes’ effectively offer specific customers different prices for the same items. Factors such as how loyal the consumer is to a particular brand, the ages of their children, or how often they visit a certain branch could all taken into account.
Supermarket chain Safeway has launched Just for U, an extra tier of personalised deals incorporated into its established Club Card platform. Digital coupons can be loaded onto a loyalty card in advance or accessed via the Safeway smartphone app while shopping in store.
East Coast food retailer Stop & Shop has introduced a mobile app that generates individualised e-coupons. It identifies consumers by their frequent shopper number or phone number before pinpointing their exact location in the store to ping them a relevant deal.
Cincinnati-based grocer Kroger emails its frequent customers personalised coupons with the help of consumer research firm DunnhumbyUSA. According to Kroger spokesman Keith Dailey, these deals have a very high take-up rate, with 70% of shoppers redeeming at least one of the offers.
It’s a potentially controversial strategy, raising privacy concerns over data mining as well as piquing customers’ sense of fairness. However, as more grocery chains adopt similar pricing structures, this could eventually spell the end for standardised price tags.
Michael R. Minasi, president for marketing at Safeway, said his brand believed the desire for a good deal would outweigh such concerns. “If our consumer information is right, personalisation is really a consumer desire right now, not so much a consumer fear.”