Tide Turns for A&P

Here's a marketing insight you probably didn't know: Cleaner supermarket shoppers tend to be better fed.

Well, one could infer that by looking at A&P Canada Inc.'s shopping-cart data.

The Montreal-based chain discovered that Tide detergent purchasers visited the stores every week at a 26% higher rate than everyone else, and that they spent 70% more.

Rest assured that Tide has since played a more prominent role in A&P's marketing materials, including fliers, direct mail and e-mail.

“The sales profile justifies the investment,” says Douglas Brummer, A&P's vice president of marketing and corporate development. “We don't look at the profit and loss attached to that box of Tide — we look at the profitability of the basket size of people who bought Tide.”

It all started when A&P signed on with the multi-retailer Air Miles Reward Program. The chain hoped to fuel its mass marketing, but it captured so much data that it instead decided to aim tailored promotions at its best customers.

Thanks to shopping-cart analysis, A&P was able to segment its customers into four food groups: Foodies; Fresh and Healthy; Time Pressed; and Price Driven. These groups have responded best to the targeted promotions.

“We send them monthly direct mail pieces full of information and offers,” Brummer says. “A customer could be Time Pressed, but living next door to a Foodie.”

A&P is also able to target fliers based on location (see “Taking a Flier,” page 14).

“A grocery chain has the ability to be very advanced in segmentation and customer identification,” says Bryan Pearson, president of Alliance Data Loyalty Services and Air Miles. “The trick is bridging the gap between data capture and analysis and connecting it to marketing decision-making.”

A&P clearly needs this edge. Most of its stores are in the densely populated provinces of Ontario and Quebec. But Wal-Mart Super Centre and Shoppers Drug Mart recently entered the Ontario market.

Even so, the biggest headache going forward is determining the time frame for return on investment.

“With a two-week promotion, do you look at the two weeks of the program, or a month or six months out?” Brummer says.

It'll be worth it, whatever time period is used. Air Miles captures 55% of all transactions — and since program participants spend more, this amounts to 70% of the till.

NL

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