Progressive Grocer Independent

JUN 2016

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34 | Progressive Grocer Independent | June 2016 The Technology Pragmatist accurate database. Eliminating card issuance and third-party data entry drops the cost per enrolled member from about $1 to just a few cents. Te database also has become far easier to create and manage. Most good POS systems come with a loy- alty module for little or no cost, and that module becomes the database which manages the program. Identi- fying your biggest and most proftable customers becomes a straightforward exercise. Building applets that allow you to identify consumers who are in- creasing or decreasing their spending over time is both easy and low-cost. If your POS system doesn't ofer a good, inexpensive loyalty module, stand-alone solutions can deliver solid infrastructure at a manageable cost. Most importantly, the whole issue of database housing and maintenance has essentially gone away or, more precisely, has risen to the cloud. Years ago, data storage raised huge issues: Should I build a huge database infrastructure, which involves costs, overhead and managing aging tech- nologies, or should I outsource — but to whom, and on what terms? Tese days, the cloud provides low-cost, instantly scalable, highly reliable data storage in a variety of confgurations. Companies like AWS (Amazon Web Services) and Google Cloud deliver a level of cost savings, fexibility and quality that was simply unimaginable 10 years ago. Targeted Messaging Communication becomes far simpler as well. Instead of worrying about expensive direct mail and customized fiers, you can simply use a combina- tion of targeted emails, text mes- sages and customized websites (built "on the fy" after the ID is entered) to provide a steady stream of rich, meaningful, relevant information to your best customers. Building an integrated, highly targeted commu- nication program for loyalty members becomes afordable and proftable. Developing the right kinds of targeted ofers for each group of consumers may be a bit of an intel- lectual challenge, but once you fgure out some basic programs to appeal to basic groups of consumers — de- mographic groups, psychographic groups, new arrivals, declining shoppers, etc. — you quickly develop an evergreen arsenal of relevant programs designed both to deliver value to your customers and improve proftability for you. You don't need to redesign the program over and over — simply build a solid program once, and use it as needed. Smaller retailers might still not have direct access to the large mar- keting budgets ofered by the global consumer packaged goods compa- nies, but by focusing on developing programs that specifcally drive the retailers' own needs — improving volume, proftability and retention among their best shoppers — inde- pendents have the opportunity to use loyalty marketing to drive their own agendas without adding to the confu- sion caused by simultaneously driving the manufacturers' agendas. With all of the technological advances, the best news of all is that loyalty marketing is now afordable and achievable for independent retail- ers. Tis innovation is changing in ways that allow technology to trickle down to the little guys so much fast- er. As Big Data migrates to the cloud, Big Data innovation becomes highly available to all comers, regardless of size. All of a sudden, the newest technological and analytic approaches become afordable for everyone. Machine Learning I recently came across a great example of how technological progress can The remarkable part of the technological advancements we're seeing is not so much that new technologies create new things to do, as that new technologies make existing approaches easier to use and cheaper to execute.

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