Third Parties, Different Developments with A&P, Safeway

Last Updated Sep 15, 2009 7:30 PM EDT

One way retailers have been rolling with the economic punches over the past few years has been by launching marketing programs with third parties that have developed new kinds of promotional strategies. Relationships with third parties can work out well or badly depending upon circumstances.

Among the innovations that promotions companies offer retailers, electronic coupons are having a big impact as stores look for new ways to draw â€" and hold â€" customers, and consumer products manufacturers test methods of targeting promotions more cost effectively.

Among the latest company's getting involved, A&P has struck a deal with Zavers, a digital incentive management firm, to tempt customers of its namesake, Food Emporium, Super Fresh and Waldbaum's supermarkets with electronic coupons tied to its loyalty card programs. Customers can sign up for the program then simply downloaded deals to their loyalty cards, which are activated automatically at the store checkout.

Among the range of deals on food, consumables and general merchandise products that A&P currently offers is a coupon that can be redeemed for one of its reusable shopping bags at no charge. So the program has a green cast, in this case a good thing, as it saves materials and landfill space that otherwise would be devoted to used paper coupons and disposable grocery bags.

A&P has been taking a dual approach to the consumer in recent months. Through its "fresh" format stores, it has expanded perishable and prepared items, but it also is promoting value through its Red Tag savings program, which it has been emphasizing more emphatically of late. The electronic couponing effort, developed with Zavers expertise and technical support, falls under the Red Tag umbrella.

Not all the interactions between third party promotional providers and retailers have been friendly, however. Safeway recently ended a popular fuel-rewards program after being hit with a patent-infringement lawsuit by Excentus. The company accused Safeway and a subsidiary, Blackhawk Network, of infringing on a patent it holds for fuel-rewards programs. Safeway responded that the fuel rewards cancellation was unrelated to the lawsuit, although that claim might draw a certain amount of skepticism. Until its cancellation, the PowerPump program provided Safeway customers with a 10-cent-per-gallon discount on fuel for every $100 of groceries they purchased, redeemable at the company's gas stations.

Blackhawk is one of the side operations that Safeway has developed. Established in 2002, Blackhawk's basic business is developing gift card programs of the kind that have been popping up at retail in recent years, the ones that allow consumers to purchase gift cards from one store at another. Safeway was running its PowerPump program in conjunction with Blackhawk. A while back Safeway, through Blackhawk, tried to purchase Excentus and patents owned by another company, Auto-Gas Systems. Excentus now owns those patents. During this period, the suit alleges, Safeway came by information covered by the patents, info that it used to develop PowerPump. Which is now kaput.

So, third party partners can be a good thing, expediting innovative marketing and other programs. Just ask Kroger about that and its work with dunnhumbyUSA. But they can complicate things if a relationship turns sour. A&P certainly will try to keep that from happening, and Kroger--well, it owns enough of dunnhumbyUSA not to worry.