Dr. Stafford Shares Expertise with FOX News
For release: July 12, 2013
Dr. Marla Stafford, Chair of the Marketing and Supply Chain Management Department
at Fogelman College, was recently featured in an investigative piece on FOX News.
The news team researched and reported about the increasing use of loyalty cards and
the effects on businesses and consumers. Dr. Stafford explained some of the positive
outcomes associated with using a loyalty card, such as receiving product benefits
and a more personalized shopping experience.
To read the full report or watch the video clip, please visit http://www.myfoxmemphis.com/story/22808505/do-loyalty-card-programs-work.
Do loyalty card programs work?
Posted: Jul 10, 2013
By Kristin Tallent
MEMPHIS, Tenn. (FOX13) -
Stores are trying now, more than ever, to win over your business. They're offering
cheaper prices, deals on gas and big coupons. But to earn the savings, you have to
give up some of your privacy.
Whether or not your wallet is full of cash, chances are it's full of rewards cards
from loyalty programs. From CVS Pharmacy, to Petco and even gas stations like MAPCO,
it seems almost every business is asking you to sign up for something.
Dr. Marla Royne Stafford says, "They've been around for a long time but they've become
even more popular lately." Dr. Stafford, chair of the Department of Marketing & Supply
Chain Management at the University of Memphis says rewards programs are simply smart
business. "Customers like to be considered valuable to the business and if they keep
coming back to that business where they have some type of rewards program, then, they're
going to get benefits along the way."
Those benefits include anything from cheaper gas to cheaper prices in the store, but
do loyalty programs provide enough incentive to let stores know what you're buying?
Dr. Stafford says, "When you check out at the grocery store and you scan your rewards
card, the store is getting a lot of information about you. But that's not necessarily
a bad thing because they can use that information to contact you if they need for
a recall or something along those lines and they can better target their products
to you. That's why you'll get coupons when you check out at the register."
At places like Kroger, which is the nation's largest grocery chain, certain items
are offered at a much cheaper price by using your loyalty card. For example we found
the following in the cereal aisle: $3.75 a box without your Kroger card and $2.99
with it. That's a savings of $.76 and enough to encourage most shoppers to use their
Joe Bell, with Kroger Company, says stores are simply using the information they get
from rewards cards to provide a more tailor-made shopping experience. "As we start
to see patterns in stores, it helps us to design what types of shops go into a store,
what type of facility we need to build for the clientele that shops that area, because
maybe they don't buy at all out of the nutrition shop but they do buy out of the bakery,
in the deli."
Bell says they also use the information to help organize the layout of a store.
He says while companies are getting better at giving customers what they want, it's
tough to achieve perfection.
Based on the number of stores jumping on the bandwagon, the loyalty program seems
to be working well for companies and with the difference in prices and incentives,
it's working for most customers too.
But, with all the cards people have to keep up with, it's maybe not working so well
for the weight of your wallet.
A small price to pay to save.