1. Explain whether Catalina’s approach to storing customer buyer information and using it to target shoppers who visit the store as a secondary location is a good business practice. Do you think this helps the store build customer retention? 2. Discuss the role of traditional metrics (such as market share) in this new CRM environment. Should they be discarded?
Catalina is Changing Supermarket Shopper Measurement
Catalina Inc. is a Florida-based company specializing in supermarket shopper tracking and coupon issuing. The company has about 1,200 employees and operates in the United States, as well as in major European countries. The company built its business model on issuing coupons to grocery shoppers online when they check out. The basis for this business model is that traditional print media has long production lead times, and the response to these media is not measurable on the individual customer level. Thus, supermarkets and manufacturers cannot run and track individualized campaigns with traditional media. Catalina’s system consists of a printer connected to the cashier’s scanner and a database. The information on each shopping basket that checks out via the scanner is then stored in the database. Using the person’s credit card number or check number, the database links individual shopping baskets over time. If the person pays cash, the system cannot link the basket. The system then allows both manufacturers and retailers to run individualized campaigns based on the information in the database. For example, Catalina could partner with the retailer to improve its cross-selling. A typical issue for any given retailer is that certain customers use the store as their primary shopping location, whereas others use it as their secondary store. To improve the SW with the latter group of customers, Catalina first investigates basket composition of the various buyers. It then finds that certain buyers buy, for example baby or children products (thus, there is apparently a family behind this shopping bask), yet the number of calories in that basket does not match that of an average family. One explanation for this might be that this shopper uses this outlet as a secondary store. Given this interpretation, the decision then is to allocate to this customer a gift of say $10, for shopping for 4 weeks in a row spending at least $40 per week in the store. The goal is to selectively target those shoppers of whom the store captures only a low SW, and to entice them to change their behavior.
Questions :
1. Explain whether Catalina’s approach to storing customer buyer information and using it to target shoppers who visit the store as a secondary location is a good business practice. Do you think this helps the store build customer retention?
2. Discuss the role of traditional metrics (such as market share) in this new CRM environment. Should they be discarded?
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