GEMCON 2005

LAS VEGAS -- Clemens Family Markets has experienced a 2% increase in same-store sales since converting to a weekly ad circular in September after following an every-other-week circular schedule for eight years."We're maintaining and gaining households," said Teresa Wetmore, director of marketing information, Clemens Family Markets, Kulpsville, Pa., which operates 25 stores in the Philadelphia area.Analysis

LAS VEGAS -- Clemens Family Markets has experienced a 2% increase in same-store sales since converting to a weekly ad circular in September after following an every-other-week circular schedule for eight years.

"We're maintaining and gaining households," said Teresa Wetmore, director of marketing information, Clemens Family Markets, Kulpsville, Pa., which operates 25 stores in the Philadelphia area.

Analysis of loyalty card data led Clemens to make this change while also helping the chain to evaluate the front-page content of its circular as well as its baby and greeting card club programs, Wetmore said. She described these efforts in a session, "The Power of Loyalty Data: From CRM to Circulars," at the GEMCON 2005 conference here Oct. 24 to 26. The conference was sponsored by Ogden Associates, Morristown, N.J.

Clemens decided to investigate the effect that running a circular for two weeks rather than one was having in a market where most of its competitors were running weekly circulars. This was of particular concern, Wetmore said, given a study from Woelfel Research, Hamburg, N.Y., showing that 59% of consumers read circulars when they receive them, rather than waiting. "We had no presence in the second week of the ad," she said.

In doing the analysis, Clemens tracked a variety of data points, including sales with its Customer Choice loyalty card and without the card. The analysis showed that, in the second week of the ad, the chain suffered a 4% to 7% drop in households, a 6% to 10% decline in new households, and a 3.5% dip in the percentage of card sales.

"With this information, we moved to a weekly ad, starting in September," she said. "The data has been powerful in helping us make good decisions."

Clemens has also analyzed its loyalty card data to determine which themes and items it should feature on the front page of its circular. In one example, the retailer found that a 10-for-$10 offer on average draws 5% more households than other front-page programs, such as buy-one-get-one-free, crazy eights or 50% off.

"Were these sales to cherry-pickers?" Wetmore asked. "Not necessarily. Some are new households, which gives us the opportunity to beef up our merchandising and customer service so we can capture them as long-term customers."

Wetmore also showed a chart breaking down the response of top loyalty card shoppers and new shoppers to various items featured in the 10-for-$10 front-page ad. Tastykake cupcakes were found to be the No. 1 item among top shoppers (who spent in excess of $500 over four weeks), with 25.3% buying it.

On the other end of the scale, 6-inch mums were purchased by less than 1% of top shoppers, ranking 12th out of 12 items. That item was thus identified as one that "shouldn't be on the first page of the circular," Wetmore said.

In a market where baby-related items can be purchased at any number of retail formats, Clemens decided to start its First Steps Baby Club program to retain customers. The club is geared not only to new parents but to other relatives such as grandparents, aunts and uncles.

The Baby Club rewards members with $10 coupons -- applicable to any item in the store -- when they reach $100 in purchases of any of 800 baby-related stockkeeping units. The store also runs a monthly "trivia contest," asking club members to answer multiple-choice questions on baby-related subjects, such as, "What's the most popular name for baby girls in 2004?" (Answer: Emily.) Two winners per store each win a $25 Clemens gift certificate.

Starting in January, Baby Club members will be able to register for a free birthday cake for a child's first birthday.

According to Clemens' analysis, since the Baby Club was launched in January 2005, 9% of card members have participated in it, including 87% of members in the top three shopping levels. Redemption rate of reward coupons has been 60%.

In addition, since the start of the program, Clemens has seen a 24% increase in Baby Club members, a 16% increase in members in the top three levels, and a 30% increase in baby product sales.

Clemens also runs an American Greetings Club program, sponsored by the card supplier. Members who purchase five American Greetings cards receive the sixth one free. All program information is printed on checkout receipts.

Analysis of the greeting card program revealed that 11% of loyalty shoppers participate, including 40% of shoppers in the top three spending levels. Mothers Day triggers a 14% jump in participation from April 10 to May 7. The free-card coupon has a 60% redemption rate.