MARION, Ill. -- As technological advances make the use of loyalty programs more prevalent in the industry, one of the questions that retailers are asking is just how big a chain has to be to take advantage of this trend?
Ask Roger Walker of Marion, Ill., and he will tell you that you only need three.
Walker is the vice president of K.R.W. Inc. of Marion, who operates three smoke shops, two of which offer fuel, all in Kentucky. He has had a loyalty program supplied by an application firm called ezMiner Inc., Madison, Ala., for [image-nocss] more than a year now.
It's like handcuffing customers to us, Walker told CSP Daily News, referring to the virtually captive audience. He has a situation where two of his stores and a competitor's location are within walking distance of each other. We saw a lot of people who would share the business between the three of us, and because they're now getting rewarded [by us], they've became [our] weekly customers instead of biweekly customers.
The program ties fuel and tobacco sales to a points program, where after a certain number of points, customers get so much off of fuel or a tobacco purchase. In some cases, customers receive a coupon worth discounts on fourth-tier cigarettes, Walker said. Customers use loyalty cards that identify them as participants and trigger point accumulation.
From a technology standpoint, the program requires a special card reader, but processes the transactions via equipment already in the store, Walker said.
Single-store owners and c-store chains are realizing that it is important to offer more than just convenience to be successful in today's retail market, David Thomas of ezMiner told CSP Daily News. Loyalty programs offer the c-store owners a unique way to differentiate themselves from each other and from the ever-threatening super stores and grocery stores.
As technology evolves, programs are emerging that have no hidden costs or monthly fees, Thomas said, making loyalty more accessible to smaller retailers. This trend is important because, as Thomas pointed out, Convenience stores are not just about gas and tobacco any longer.
CSP has examined the impact loyalty programs are having on the competitive landscape, and will feature its findings in the May issue of CSP magazine.
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