"Peter Aitken" > wrote in message
.com...
> "Vox Humana" > wrote in message
> ...
> > Ohio grocer "segments" shoppers with personalized prices
> > Shopper card data being put to discriminatory uses, just as we predicted
> > Dorothy Lane Market, an upscale grocery chain in Ohio, has implemented
> > Customer Specific Pricing (CSP), a practice where different prices are
> > charged to each group of customers. Now the majority of all discounts
> > available in the store only go to the identified top 30% of Dorothy Lane
> > shoppers.
> >
> > After starting their card program, Dorothy Lane eliminated newspaper
> > advertising and switched to an "in-store ad-sheet". Once they were able
> to
> > analyze their program data to determine who their most profitable
> customers
> > were they started mailing them exclusive offers while at the same time
> > reducing the size of the discounts on their ad-sheet making them only
> > marginally better than the regular prices.
>
> <snipped>
>
> This goes counter to common sense. Aren't low prices primarily a way to
> attract new customers? And if someone is already a loyal customer why
would
> the store give up profit on them? They already shop at the store
regularly.

Maybe they don't want new customer, only bigger proffits. I have shopped at
Dorothy Lane Market. It caters to an elite crowd who buy lots of up-scale
items with big profit margins. If you can convince your loyal base that
they are getting an exclusive deal, but really give them the same price they
would have given the general public before implementing the loyalty card,
then you have lost nothing. That's how the cards work. You jack-up prices.
Then you give a discount to people who have a card. That "discount" still
results in a sales price higher than the everyday price at other stores.
For the very elite customers, you give them a few more cents off. The elite
base thinks they are "special" but in reality they could go to another store
and get the same item as the unwashed masses. What happens is that you
ultimately create a captive customer base. In order to get the same price
you would have received a couple of years ago without a loyalty card, you
will have to not only have a card, but you will have to purchase all your
groceries at one store in order be in the "elite" group. What you save with
the card on a few loss leaders will be more than lost on other items. But,
If you don't buy the gallon jug of Tide for $3.50 more than it costs at
Meijer, your peaches and chicken breasts will cost more because your total
purchases and your worth to the store will be less. So, not only does the
store end up charging you more, but they now have a database detailing all
your purchases and whether you think it is paranoid or not, there is a good
chance that the database will end up being used against you.