Unlike data-driven businesses, such as hotels, airlines, banks and online retailers, big retail chains have been slower in using powerful computers to determine optimal product pricing or to match discounts to customers’ specific tastes, wrote Andrew Martin of the New York Times (May 30).

“But now, Sam’s Club, Wal-Mart’s warehouse chain, is offering a program called eValues that strives to offer bargains tailored to each member, based on that member’s buying history,” he adds.

Martin quotes Willard Bishop, a Chicago-based supermarket retail consultant, who says, “This is the holy grail in a sense, pricing to the individual.”

Personally, as a longtime Costco shopper, I immediately saw the appeal of personalized discounts. I am accustomed to being greeted with a flyer full of coupons for things I have no intention of buying. Sam’s Club, on the other hand, has eValues kiosks near the front door, which print out coupons for stuff you actually want.

Other interesting facts about Sam’s Club eValues:

• Sam’s Club coupons normally had a response rate of 1 or 2 percent, while 20 to 30 percent of eligible eValues customers collect the discount they are offered (according to Lindy Vytlacil, Sam’s Club’s vice president for member insights and innovation).
• eValues is available only to Sam’s Club “Plus” members, who pay a higher annual membership fee.
• “The eValues program is the latest iteration in the fast-growing field known as predictive analytics, which uses vast amounts of data to spot trends and anticipate consumer behavior,” writes Martin.
• “And for all of its sophistication, there is no guarantee that eValues will be a hit,” Martin adds. “Most shoppers observed during several recent visits to the Seacaucus (N.J.) store went about their shopping seemingly oblivious to the eValues kiosk.”

Cellphone Acts as Loyalty Card

Over the past few months, we’ve run a number of articles about the growing trend of retailers connecting with customer cellphones as a means to promote location-based services, mobile coupons, pre-purchase research and loyalty programs (see Mobile Customer Interface).

Claire Cain Miller, also of the NY Times, recently wrote (May 31) about how retailers are looking to marry the “buy 10 coffees, get one free” loyalty card concept with smartphone apps and games.

“Some start-ups, like CardStar and CardBank, store existing loyalty cards on cellphones with scannable barcodes,” she writes. “And companies including Motorola and a start-up called mFoundry are providing retailers with the technology to build cellphone loyalty cards.”

Other start-ups like Loopt, Foursquare, Shopkick and Gowalla allow people to indicate their location to friends via their smartphones, writes Cain Miller. The melding of loyalty programs and social media “games” rewards people for frequently checking into particular stores – and encouraging their friends to do the same.

It will be interesting to see which of these types of mobile loyalty programs and social media games really take off. I suspect it will only be a matter of time before everybody is using them. The fundamental concept makes a lot of sense: Instead of carrying around a stack of different cards (for submarine sandwiches, coffee and other everyday purchases), or forgetting them at home when you’re already out shopping, they’re all contained in your phone. And really, who leaves the house without their phone nowadays?

- newsletter@iQmetrix.com

* To read more about the Customer Loyalty, Discounts and the Mobile Customer Interface, check out the following articles from iQmetrix News & Views:

Growing Market for Location-based Ads and Mobile Coupons

Engage Customers with Loyalty Programs

Use Twitter to Monitor Customer Tastes

New Options for Offering Mobile Coupons

Pre-Purchase Research Goes Mobile: Consumers Shift from PC to Smartphone