business news in context, analysis with attitude

The Los Angeles Times reports that while “times are tough for neighborhood supermarkets as cost-conscious consumers defect to Wal-Mart, Costco and other discounters,” Kroger “seems to be bucking that trend … Industry analysts say Cincinnati-based Kroger's success is probably tied to its efforts to attract bargain hunters, aided by its exhaustive electronic tracking of customers' shopping patterns and a push into marketing house brands.”

Much of the credit is given by Kroger CEO David Dillon to the Dunnhumby marketing system. “We send our very best customers coupon books specifically targeted at what they actually buy. The redemption rate of these coupons is significantly higher than other coupons," Dillon says.

And, he adds, “Ten years ago we paid too much attention -- almost every day -- looking at what our competition was doing. We can't ignore our competitors, but we have to pay more attention to what our customers want in our stores … Profits are the outcome of focusing on the customer.”
KC's View:
Every once in a while, I run into a retailer that has no card program, no tracking program, that allows it to get very specific about who is buying what products, about who the high net worth customers are, that allows it to target shoppers in a highly granular way.

It simply doesn’t make sense. You have to be able to track what you do. You should only do what you can track. To do otherwise, it seems to me, is to waste time, effort and money at a time when few can afford to do so.