LAKE OSWEGO, Ore. -- The newest Nature's Northwest store here is creating targeted newsletters, printed at the point of sale, using data based both on customers' preferences and their actual purchases.
The retailer, based in Portland, Ore., plans to use frequent-shopper data to achieve a one-to-one relationship with loyal shoppers at its store here, which opened Aug. 10. The newsletters contain promotions and store information customized to specific shoppers' needs, and can be distributed at POS much more cheaply than by direct mail.
"By doing this analysis, we can provide different promotional campaigns and specific offers as unique as our customers are," said Scott Gray, director of information systems for Nature's Northwest. "We want to provide something that our customers will value, and actually take the time to read."
The retailer is compiling customer data on health and personal interests from applications for its frequent-shopper program. Applicants are asked to list birth dates, children, pets, dietary restrictions, hobbies and educational interests.
"By compiling this historical data we can provide newsletters that let the customers get acquainted with our store," Gray said. The new prototype store provides traditional, natural and gourmet groceries, as well as wines, a pharmacy offering both natural remedies and traditional medicines, a cafe, a resource center, a wellness center for exercise classes and health seminars and a spa.
"We have a huge opportunity to introduce new departments to our customers," said Stan Amy, president of Nature's Northwest. "The customized newsletters will allow us to leverage our advertising dollars and our promotions by focusing on customized offers. We can deliver these offers based on our shoppers' demographics, personal interests and shopping patterns.
"To date we have processed between 5,500 and 6,000 card applications," he added. "We estimate 75% of the store's customer base is using the card, and receiving [general] newsletters."
The retailer plans to begin analyzing shopping data acquired at the POS this week, and hopes to distribute its customer-specific newsletters by the last week in September, according to Gray.
In order to get the targeted newsletter, customers present their Nature's Northwest Partnership Program loyalty card during checkout. When the cashier swipes the card's bar code, it accesses the customer's file. A printer, shared by every two checkout lanes, issues a one-page newsletter with up to six articles, promotions, recipes or discounts customized exclusively for individual customers.
"We have the ability to store up to 10 newsletter options," Gray said. "The remaining campaigns are printed during each visit, so a customer never gets the same newsletter twice."
Though the retailer is still compiling its database of loyal shoppers, Nature's Northwest is already planning to link its salon and wellness center databases with its frequent-shopper data.
"We will not only be tracking purchase behavior, but how often customers are visiting our store's other departments," Gray explained.
For example, the retailer can query its database to determine the number of women between the ages of 30 and 40 who are interested in yoga, but have never taken a class at the store. "We could even analyze which customers are taking classes and promote a specific natural product," he said. "We want customers to realize this is a lifestyle store, not a grocery store."
The retailer plans to begin marketing promotions for its departments by the end of October, Gray said.
Nature's Northwest decided to target customers in-store rather than by direct mail because the former is considerably less expensive. "The cost to deliver one newsletter at POS breaks down to about four cents for the paper and laser ink cartridge," he said. "To mail similar promotional pieces, it would cost between 75 cents and $1 for each item, including paper, postage and handling.
"We are reaching our customers far more efficiently and economically at store level than through a mass mailing, which would require sending 10,000 of one type of item in hopes of hitting our target segment," he added.
Nature's Northwest's database marketing program is provided by Consumer Card Marketing, Braintree, Mass. The retailer is owned by General Nutrition Centers, Pittsburgh.
In addition to expanding its targeted newsletter, Nature's Northwest plans to explore more customer-based technology projects. "We do have a home page in connection with the store, and there are so many things we can do with it," he said.
One area the retailer would like to explore is using the Internet for prescription refills. "Why not have our customers sign onto our home page, type in their prescription number and have their refill waiting for them at our store, ready for their next shopping trip?" he said. "We still need to plan our logistics to make this effective, and we are not close yet, but it is a possibility."
The retailer also is interested in tying interactive multimedia kiosks to its customer database and Web site. "It would be great for customers to walk into the store, input any dietary restrictions and get a customer-specific list of items available, and any electronic discounts," he added. "If the Web site is linked to the database, the same information could be available on-line."
The retailer is still exploring these ideas, and Gray did not say when these projects would be in place.