Kroger Linking Loyalty Card with Wireless Phone Service

(MoneyWatch)  Kroger hasn't let the recession put it off strategic programs designed to forge stronger customer relationships, so the company is tying a wireless phone initiative it has been pursuing into its loyalty cards.

Kroger's certainly isn't ignoring the recession, and, in fact, the initiative with partner i-wireless provides customers cost savings. Of course, when a retailer's biggest rival is Wal-Mart, demonstrating that it can provide bargains, particularly on important services, can help it withstand the draw that the competitor's everyday low prices create. So, Kroger is using its circulars and web site to trumpet discounts in essentials such as milk, meat and produce, not to mention a program that provides 30-day supplies of generic prescription drugs for $4. Yet, it also has been providing fresh fodder for those circulars, expanding private label not only in staples but also, for example, adding organic salads and Angus beef to its Private Selection store brand line up and Kroger Active Lifestyle milk, which incorporates cholesterol-lowering plant sterols.

In linking the company loyalty card with a wireless telephone service provided through its stores, Kroger is refining a marketing approach supermarkets particularly have been developing to increase their attractiveness to consumers who might otherwise be tempted by alternative food retailers such as Wal-Mart and Target supercenters, Costco and BJ's warehouse clubs, Trader Joe's, etc., etc., etc. Indeed, with the myriad alternatives available and expanding ?€" Dollar Tree adding refrigerated cases to more stores, in another example ?€" supermarkets can be well served by reinvesting in core initiatives that have worked for them, although loyalty card programs certainly need to be backed up by real rewards if they are going to remain popular.

Kroger has made loyalty card programs particularly important to its marketing function, partnering with strategic research firm dunnhumby to establish dunnhumby USA. In the United Kingdom, dunnhumby worked with Tesco to help that retailer establish its well-regarded loyalty card program. Now, in the United States, Kroger and i-wireless are launching a new wrinkle on the retailer's loyalty efforts. The initiative provides customers who use their KrogerPlus card with 20 free cell phone minutes on i-wireless phones sold at Kroger for every $100 spent in the course of a month. Qualifying cash caps at $1,500 a month, which translates into 300 minutes. Shoppers using Kroger brand MasterCards earn 30 minutes per $100 spent.

The Cincinnati Enquirer reported that Kroger owns a stake in i-wireless, just as it does dunnhumby USA, so developing effective initiatives with the company is that much more of a priority. Consumers can find i-wireless operations in Kroger supermarkets but also in its Fred Meyer supercenters and the convenience stores it operates such as Turkey Hill, which extends the range of i-wireless service from Pennsylvania to the Pacific Northwest.