Marketing American Style

January 16, 2008

Down here in, Sunny Arizona, the shopping is fantastic. Not only for clothing, electronics, vehicles and such things but also and especially for food.

As in Canada, each major food store chain has it’s own “VIP Card or “Loyalty Card”. You present this card at the check out to get significant discounts on specially priced items. These items can range from meat and bread to liquor and ice cream. And the discounts are very significant, up to 30-35% in some cases. Another great thing about using these loyalty cards is when you pay for your groceries, you immediately get coupons for competitor’s products for your next shopping trip. If you bought “Tide” soap you may get a “Cheer” coupon. Get the idea? So what can be so wrong with all this?

I signed up for one of these cards at the local “Fry’s” food store. I immediately started reaping the rewards of lower prices. Because of the close proximity and the great prices I have done about 95% of my grocery shopping at this Fry’s location.

Last week I stopped in to get a few last minute things for dinner. When I reached the till I realised that I had forgotten my VIP card in my vehicle. The lady at the till said that I would have to fill out another application in order for her to give me the discounts. I was ready to do just that when an American fellow behind me looked at my purchases and said “No liquor … here use mine”. I thanked him and paid for my groceries. While waiting for my change I thought ….”Why NO LIQUOR?” so I asked him.

The American told me something right out of the book 1984. It seems that when you sign up for these VIP/Loyalty cards you authorize the store to give certain information to third parties for marketing purposes. Hence when you buy one brand of dog food you get a coupon for another brand to try. It is the manufactures and service providers who are sponsoring the discounts.

The reason the American fellow didn’t want to show liquor on his purchases …. because that information is also available to Insurance companies. When you apply for insurance at ABC Insurance Company the information you give them allows them to check a database and ultimately your grocery shopping patterns. If it shows that you purchase a lot of liquor your rates may be significantly higher.

So now you know why you are getting these discounts and who can value from it. I am not suggesting you quit using these cards. Far from it, just now you can be aware of it.

Bye the way there are fantastic discounts on Liquor, Beer and Wine as well.

Comments are closed.