NORTHFIELD, Ill. -- Kraft Foods here, in partnership with at least one retailer, plans to embark on a project this summer to analyze consumers' overall grocery spending, going beyond the tracking of purchases at a particular retailer to examine customers' spending at all supermarkets, drugstores and mass merchants, according to a source familiar with the situation.
"We think this kind of analysis of data could be extremely promising for ourselves as well as our retail partners," said Eric Leininger, Kraft's vice president of marketing information services. "The whole area of loyalty marketing is ripe with information which can be used to everyone's benefit," he said.
While Kraft had not yet officially committed to the pilot at press time, Leininger said it was being given serious consideration. The retailer has not been named.
"What the retailer gets is the ability to build more loyalty," said Don Peppers, a partner in the Peppers and Rogers Group, a Stamford, Conn., consulting firm. "This program has the potential to bring some additional insights into the mix, which the smart retailer can use to make adjustments in product offerings and provide additional services in the future to inspire loyalty.
"If, for example, I buy a lot of ingredients for Chinese meals, there may be a suggestion that I buy a wok and some chopsticks; or perhaps meal planning and suggestions based on the kinds of food my household buys," he said.
The project would combine a retailer's frequent-shopper data with data from larger consumer panels.
Based on statistical models comparing a consumer's spending in various categories to overall averages, the data would point to purchases the consumer probably was making at other retailers, including other supermarkets, drugstores and mass merchants. While the consumer's data would be shared with the manufacturer, name and address would not be identified, according to a source.
The manufacturer and retailer could leverage this information to determine what products the customer was not purchasing from the retailer and make adjustments in marketing and product assortment.
This information could be a powerful tool to learn about the products the customer was purchasing at other retailers, Leininger noted. While frequent-shopper data provides retailers with knowledge of their customers' buying habits, they have had a difficult time discerning what items these shoppers are purchasing at other stores.
For example, a consumer panel may show that a person with similar purchasing habits and spending levels of a frequent shopper spends a certain amount on cookies each shopping trip. This information could be matched against the retailer's frequent-shopper data to determine if the levels of spending on these products are in line with the larger group surveyed in the consumer panel. If spending on a category or a specific product is below the norm, the retailer could then analyze the reasons the consumer was purchasing the product elsewhere. The consumer might be buying the item elsewhere at a lower price, or the retailer might not carry the item.
"This data has been available, but it hasn't been a seamless process to put it together," Leininger noted.
The technology is a collaborative effort between ACNielsen, Schaumburg, Ill., and Catalina Marketing, St. Petersburg, Fla. The system would link the information from the retailer's database with ACNielsen's consumer panel, which includes purchasing information from all retail channels, including drugstores, mass merchandisers and warehouse clubs.
