A Closer Look at Pay By Touch Empowered, Club DLM

Dorothy Lane Market (DLM) signed a deal to implement personalized marketing kiosks and biometric payment services from Pay By Touch's throughout the entire chain by the end of July 2007, including an upgrade to the store's Club DLM customer loyalty program.

By adopting the Pay By Touch platform, the Club DLM loyalty program will "evolve into its new form", being re-branded as Club DLM 2.U. Under the new program, upgraded members will receive personalized offers from a kiosk as they enter the store (using a biometric finger scan or swiping their Club DLM card to identify themselves).

When shoppers enter the store, they scan their finger or swipe their DLM Club Card at the kiosk. The kiosk prints out a customized page containing up to 10 offers for products that the shopper buys most, based on past shopping history records. At the check-out, shoppers don't need to present the offer sheet because the offers that they've been assigned that day are automatically redeemed and deducted from their bill.

Grocers that have adopted Pay By Touch's kiosk-based personalised marketing system also include Green Hills Market in New York, Foodtown in New York and New Jersey, and Shop n' Save in Pennsylvania.

At the end of August, I blogged about an article in Progressive Grocer which stated that Dorothy Lane Market's biometric loyalty and payment service had already been used in transactions totaling 24 percent of sales, even though the program was launched "only two weeks ago".

As always, click the pictures to enlarge and enable you to read the print.

It said that the system, powered by San Francisco-based Pay By Touch's SmartShop, went live for shoppers on July 25, and had driven a 26 percent average redemption rate, as opposed to a 0.6 percent average redemption rate on FSI coupons. (Sunday Inserts)

Not unlike Green Hills Grocer, Dorothy Lane is no stranger to loyalty programs, and its Club DLM is well known in the industry. So, in essence, the two foremost and well renowned loyalty and rewards pioneers in the industry have both chosen to empower their industry famous programs with Pay By Touch enhancements.

The SmartShop is an enhancement to the program. "Previously, club members would get some mass offers and some personalized offers," Amy Brinkmoeller, Dorothy Lane's manager of information systems told Progressive Grocer.

According to the retailer, more than 36 percent of active shoppers - those who shop the stores on a weekly basis - used SmartShop.

One number Brinkmoeller, who spearheaded the SmartShop deployment, said she is particularly happy about is the number of users now paying via ACH through the Pay By Touch system.

Pay By Touch has invested a lot of time and money shaping this program and, ironically, should themselves be rewarded with a excellent return on their investments. It all started back in December 2005, with the acquisition of 7th Street Software, and Covena, two companies that had made tremendous headway on technology of One-to-One Marketing introducing an entirely new approach referred to as "Statistical Inference." (also known as "Bayesian Inference")

Speaking of "inferences" I've got one: I'll call it the "Full Circle" Inference.

See my next post for details....

45% of Interchange pays for Reward Programs

Yesterday, I blogged about Dubai cutting off Visa because of Interchange Fees and how that could create some momentum for Pay By Touch and other alternative payment companies. Today, I thought I'd do a backgrounder on Interchange:

First, I'd like to make note of an interesting fact. Click on the chart on the left and you'll find out that "Rewards" constitute an amazing 45% of Interchange Costs. That means that loyalty and rewards programs are responsible for almost half of the fees charged by Visa. No wonder Pay By Touch has put such a high priority on their personalized marketing program, which produces "instant" rewards at a fraction of the cost. Here are additional facts on Interchange:

From UnfairCreditCardFees.com

CREDIT CARD INTERCHANGE FEES
Background Each year, in addition to interest, late fees, over-the-limit charges and other fees charged by credit card companies and their banks, consumers pay billions of dollars in hidden fees that never appear on their monthly statements.

These hidden charges are called credit card “interchange fees.” Credit card companies and their banks charge them to merchants every time a credit or debit card is used to pay for a purchase. As much as $2 of every $100 you spend goes to card issuers.

Interchange fees are fixed in secret. There is no real competition in the credit card business. Visa and MasterCard control 80 percent of the credit card purchase volume.

Visa and MasterCard each separately work with their member banks collectively to set the price of interchange fees. This is illegal price fixing and it hurts consumers and merchants. Because banks benefit from higher interchange fees, Visa and MasterCard compete to charge the highest rate.

Interchange fees are hidden from consumers

Consumers have a right to know how much they are really paying when they use a credit card, just as they do when they use an ATM machine. But the credit card interchange fee is the biggest fee you've never heard of. Unlike other credit card fees that show up on your monthly statement, the credit card interchange fee is hidden, and credit card company rules make it practically impossible for merchants to tell customers how much they are really paying.
Interchange fees are too high

Credit card companies and their banks collected more than $36 billion in interchange fees last year alone, up 17 percent from 2005 and 117 percent since 2001. The average American family is now paying more than $300 a year in hidden credit card interchange fees. Merchants are effectively left to pass along the credit card interchange fee to consumers in the form of higher prices. The credit card interchange fee increases the price of everything consumers buy, even those who don't use plastic and choose instead to pay for their purchases in cash or by check.

With the price of gas at more than $3 a gallon, credit card companies and their banks are collecting as much as 8 cents a gallon in interchange fees, even as they continue trying to keep consumers in the dark about how much they are really paying.

Americans are paying pay the highest interchange fees in the world, an average of two percent, compared with less than one percent in most other industrialized countries.

Card companies and their banks collect more revenue from interchange fees by increasing the interchange rate and by pushing consumers into higher-rate premium and rewards cards that carry a higher interchange rate.

The card companies and their banks also increase their revenue from the interchange fee when more customers use credit and debit cards to pay for purchases and when total sales volume increases. The system is structured so that credit card companies and their banks make more money on each transaction as prices increase.

For example, even though it costs essentially the same to process a $1 transaction and a $100 transaction, the card companies and the banks collect a much higher interchange fee on the $100 transaction because the fee is based on a percentage of the total sale.

Interchange fees only benefit card companies and banks

The credit card interchange fee was originally intended, among other things, to pay for transaction processing, but even as new technology continues to lower the cost of credit card processing, credit card interchange fees keep going up.

In fact, according to a recent study, Visa and MasterCard spend only 13 percent of the credit card interchange fees they collect on card transaction processing.

Most of the rest goes to profits, rewards programs that benefit primarily more affluent cardholders and for all those unsolicited credit card offers that fill our mailboxes every day, a total of nine billion pieces of junk mail every year. Many of those unsolicited mailings include so-called "convenience checks" that can be stolen and cashed by someone other than the authorized card holder.

Yet the card companies and their banks spend only four percent of the interchange fees they collect on measures to protect consumers from this and other forms of credit card fraud.

Action is required

Americans have a fundamental right to know about the credit card fees they are forced to pay. Visa and MasterCard have kept interchange fees hidden for years, but the issue has now emerged as a major public policy concern. Congress is looking at interchange fees and other unfair credit card practices, and nearly 50 lawsuits have been filed in federal court charging that current interchange practices violate federal antitrust law. We need full investigations of the broken interchange fee system and reforms to make the system more competitive and transparent so that it better serves consumers and merchants alike.

Rapid Enrollment in PBT SmartShop Program

Press Release

Pay By Touch's New Rapid Enroll Product is an Immediate Hit with Four New Customers

Electronic sign up capability streamlines operational retail loyalty program operations

SAN FRANCISCO, Aug. 2 /PRNewswire/ -- Pay By Touch, the leader in integrated biometric authentication, personalized marketing and payment solutions, today announced that four separate retailers will pilot its internet-based Rapid Enroll kiosks to facilitate loyalty program customer sign up. All four will be live by the end of August.

Participating retailers launching pilot programs are located in New York, Wisconsin, Florida, and New England.

Additional store placements are expected to follow shortly.

Replacing the traditional paper-based enrollment process which is timely and error-prone, the sleek in-store kiosk facilitates simple and efficient electronic loyalty program sign-up. To join a retailers' loyalty program, a shopper needs only to enter a phone number and second identifier such as the first three letters of the last name. The back-end technology then automatically populates address information. The shopper can also enter her information manually.

The system also scrubs profile data against existing databases and automatically corrects any errors. The result is a more accurate loyalty program database that requires less time to process than paper based applications. What once took weeks can now be accomplished in minutes.

The installation of Rapid Enroll is flexible and simple for retailers. To get started, all a retailer needs is an internet connection and a power outlet -- no point of sale integration is required.

"One of the benefits of Rapid Enroll is that it can be customized to leverage custom loyalty program features such as charity donations, pet clubs, wine clubs, baby clubs, or rewards points," said Jeff Grider, VP Personalized Marketing, Pay By Touch. "These capabilities -- combined with lowered enrollment costs and the ability for our clients to know their new customers within a day -- makes this a compelling solution."

"To build and retain a loyal customer base in today's competitive retail environment, retailers must provide personalized service, and the most efficient way to do that is through loyalty programs," said John Rogers, Founder, CEO, and Chairman of Pay By Touch. "At half the cost of paper enrollments and infinitely faster, Rapid Enroll is the most efficient way to facilitate a positive return from loyalty program investment."

Rapid Enroll was developed by the Personalized Marketing division of Pay By Touch, which helps businesses manage loyalty and reward marketing programs with a full range of database management services in addition to its latest product introduction, SmartShop, which delivers customized coupons based on individual shopping history as shoppers enter a store.

Pay By Touch Survey Results

New Consumer Survey Reveals Positive Response

to Discount Coupons In-Store

UK – Despite traditionally low redemption rates and consumer apathy to money-off coupons in the UK, a recent survey carried out on behalf of Pay By Touch has proved shoppers have a positive response to discount schemes if they are both highly targeted and convenient to use.

In fact, the survey revealed that 88% of shoppers would use discount coupons, if these were more focused on their product preferences and were available in store while they were shopping.

Of those surveyed, 95% of shoppers who use a retail loyalty card have received in-store discount coupons. However, 75% of these shoppers said they frequently forget to redeem them even though some of the discounts offered were on items they normally buy.

Other factors that contributed to low redemption rates were the inconvenience of having to carry pieces of paper around and the fact that discounts were mostly for items the shopper did not have a history of buying.

It seems clear, therefore, that retailers who offer targeted discounts and make it easy for those offers to be redeemed, could have a compelling way to develop customer loyalty.

At Retail Solutions this week, Pay By Touch will be demonstrating SmartShop, its new in-store personalized marketing solution. SmartShop combines Pay By Touch's patented biometric technologies with its relevance marketing platform to offer unparalleled targeting based on shoppers' known preferences and established buying habits, to provide the first truly personalized marketing solution for retail environments.

Shoppers collect their offers by simply identifying themselves at the SmartShop kiosk when they enter the store. By identifying themselves again at checkout, discounts are automatically redeemed for any items they have purchased without the need for paper coupons.

SmartShop provides retailers with customer-based metrics and accurate data that improves the efficacy of marketing campaigns. SmartShop's sophisticated targeting engine 'learns' from each shopping trip to generate the next set of rewards. It provides analytics to make reporting and account settlement easy and accurate.

SmartShop has been available at Green Hills supermarket in Syracuse, NY, USA for the past 12 months and is now being adopted by other US grocery retailers.

Over 100 shoppers were questioned in May 2007 by an independent research agency.

Incentive Magazine on PBT's SmartShop

Loyalty's Only a Touch Away

Technology puts customer loyalty at your fingertips with Pay By Touch's biometric kiosks.

By Stacy Straczynski


You walk into your favorite coffee shop, a machine scans your finger, and the cashier begins making your usual order—remembering that you prefer soy milk. And your account is automatically charged, without your debit card. Talk about service!

No, it's not the Twilight Zone, it's the future of customer service. Consumers crave personalized experiences, and companies must find innovative ways to treat customers as individuals, not revenue generators. New technology is helping businesses belly up to the bar.

Biometrics...fingerprint authentication, leads the tech savvy trend. The San Francisco–based biometric authentication company Pay By Touch allows customers to use a virtual wallet—accessed by their unique fingerprint at checkout. By placing their finger on a touch pad, customers can pay for purchases without worry of identity theft or need for a wallet.

Pay By Touch's fingerprint recognition is being used to increase loyalty with their SmartShop program.

In-store kiosks distribute loyalty offers to participating customers before they shop, using fingerprint recognition for a personalized experience. Coupons are tailored to their previous shopping purchases.

This one-on-one marketing aims to increase redemption rates.

"SmartShop delivers sixteen offers based on what you like to buy—each customer gets a different set," says Shannon Riordan, vice president of marketing at Pay By Touch.

"[The program] sees if a customer prefers Coke to Pepsi and gives them the appropriate coupons. If a mother buys diapers for her new baby, it knows when [her] baby will turn two and delivers age-relevant products."

At Green Hills grocery store in Syracuse, N.Y., one year of the SmartShop pilot program has already impacted the store's revenue—49 percent of customers are cardholders and use the system every time they shop. The store also saw 10 percent increases in shopping frequency and basket size.

The lesson: Give customers the personal shopping experience they want, and they undoubtedly will come back to do business again.

Editors Note: In a related development, Piggly Wiggly is introducing the SmartShop program which will be known as "The Perkolator" in their brand new state-of-the-art store at the northwest corner of Burnt Church Road and the Bluffton Parkway will open next week.

The Pay By Touch system, where a customer's finger replaces a debit card, and the Pig Favorite Customer loyalty card will be familiar to Piggly Wiggly shoppers.

But the "Perkolator," a computerized kiosk where customers can swipe their savings cards for on-the-spot, individualized daily specials based on a person's shopping history, will be brand new to Lowcountry shoppers, Rita Postell, a spokesman from Piggly Wiggly said.

Powered by ScribeFire.

Pay By Touch Strengthens SmartShop Program

To facilitate rapid consumer adoption and give merchants maximum flexibility, Pay By Touch has added a card-based option to its biometric SmartShop(TM) service.

SmartShop, powered by Pay By Touch, gives shoppers customized offers on the products they buy most when they enter the store -- before they shop.

Pay By Touch, the leader in biometric payment and personalized marketing, is offering card-based SmartShop in addition to the biometric SmartShop service, which launched at NRF in January, 2007.

SmartShop provides merchants and consumer packaged goods companies (CPGs) with an unprecedented return on investment (ROI) by enabling them to deliver the right offer to the right shopper at the right time - both in-store and online.

"At Pay By Touch, we understand that each retailer is unique. Card-based SmartShop enables merchants to immediately engage their best shoppers by letting them use their existing loyalty cards to get personalized offers," said John Rogers, Founder, Chairman and CEO, Pay By Touch. "SmartShop offers unparalleled, automated targeting based on preferences in each particular store. There is no better way for merchants and manufacturers to reach their targets."

Research shows that 70 percent of buying decisions are made in-store, and that less than one percent of grocery store coupons are ever redeemed(1). As a result, millions of marketing dollars are wasted every year. SmartShop turns every shopper into a uniquely qualified marketing lead and delivers value to consumers, merchants and manufacturers alike.

SmartShop enhances retailers' existing loyalty programs by delivering added value to their most important customers. It also provides a robust loyalty solution for retailers who do not yet have a program in place. Best of all, SmartShop 'learns' from each shopping trip to generate the next set of relevant rewards.

Card-based SmartShop at Shop 'n Save and Foodtown Stores.

Card-based SmartShop has been implemented by Shop 'n Save stores in the Pittsburgh, Pennsylvania area, as well as Foodtown stores in New York and New Jersey.

These merchants will migrate to biometric SmartShop, and adopt Pay By Touch's biometric payment solution, to let shoppers identify themselves, pay for purchases and redeem rewards with the simple touch of a finger.

"We are extremely pleased with the SmartShop service, which is branded 'Shop 'n Save Personalized Perks' in three of our Pittsburgh-area stores," said Greg Hartley, Owner of three Shop 'n Save locations. "The service is a huge hit with our shoppers, with kiosks in each store receiving more than 300 visits a day. We are excited to continue using the program and we are looking forward to seeing the kiosk in other Shop 'n Save stores."

Early results reveal the value of the SmartShop service. These merchants can experience:

* Twenty to 50 percent shopper adoption of SmartShop
* Eight to 12 percent sales lift among customers using SmartShop
* A 25 to 30 percent reduction in advertising and direct mail printing and distribution costs

SC Johnson Among Early CPG Adopters

Already, several leading CPGs have joined the program, including SC Johnson and more.

These companies are leveraging the SmartShop platform to deliver personalized, highly relevant coupons and deepen their relationships with consumers.

With SmartShop, CPGs can experience:

* Twenty percent+ sales lift
* Four to five times greater redemption rates than traditional FSIs
* Twenty to 50 percent reduction in marketing costs per unit sold at retail
* A significant reduction in handling costs

How SmartShop Works:

1. When shoppers enter the store, they simply scan their loyalty card at the SmartShop kiosk to get personalized offers based on their purchase history.

2. Shoppers receive an 8 1/2 x 11 print-out with 16 customized offers on the products they buy most, and then head into the aisles to shop.

3. Shoppers scan their loyalty card at check-out to redeem their offers. They do not need to bring the print-out to check-out; no paper coupons are required.

SmartShop gives merchants customer-based metrics and accurate data that improves the efficacy of marketing efforts. It is easy to implement, with a Web-based management system for algorithmic campaign creation and real-time targeting. The service provides robust analytics to make reporting and account settlement both easy and accurate.

Availability: The card-based version of SmartShop, powered by Pay By Touch, is available now. For sales inquiries, call Sarah Cole at (415) 371- 5620 or email her at : sarah.cole@paybytouch.com

You mad,(could have .Ed) See SmartShop at FMI: An interactive demo of the SmartShop service will be available at the Pay By Touch booth, #411 at The New FMI Show plus MARKETECHNICS(R), May 6-8, 2007 at McCormick Place in Chicago, IL

Self-Service is Good Service

TECHNOLOGY: Groundbreakers
These grocers are among the ones that just get it -- and they're helping pull the industry into retail technology's new age.

The past 12 months saw early adopters bringing entire new classes of technology to bear on food retailing, by making real headway with initiatives such as tying loyalty programs to a consumer's fingerprint, effective marketing to mobile phones, and offering contactless card payment to shoppers on the run.

These pioneering grocers have moved the industry a step closer to the ideal of a fully tech-enabled market, equipped with accurate knowledge of what consumers want, and the ability to efficiently deliver it to them.

Here they are:

Loyalty with a finger

One of grocers' biggest gripes about loyalty programs is that the data most programs generate isn't very reliable or actionable. Shoppers forget to bring their cards for every trip, and/or borrow someone else's, and the integrity of the data is then compromised

Pretty soon all the intelligence that an expensive loyalty program has gathered is useless. This leads grocers to misapply the programs.

"Quite frankly, we've been hard-pressed to find retailers that are doing the customer loyalty program with specific customer successes," says Greg Buzek, president of Franklin, Tenn.-based retail technology consulting firm IHL Consulting. "Most retailers use the loyalty card as a discount card only to identify certain brands, rather than to target specific individuals. Instead of targeting specific offers to specific customers, the system is set up to target certain products to the masses, at a discount."

But now some retailers can take technology that has been relied on for years to identify crooks, and tie that to their loyalty systems so that they can reliably link a transaction to one person -- and one person alone.

In January Green Hills, an independent one-store operator based near Syracuse, N.Y., launched its Pay By Touch SmartShop service, in which biometric technologies teamed with Green Hills' marketing services to provide a loyalty program that's directly linked to individual customers. SmartShop gives shoppers customized offers on the products they buy most when they enter the store -- before they shop.

"The SmartShop service has been extremely popular, and shopper participation is already impacting 50 percent of store revenue," says Gary Hawkins, c.e.o., Hawkins Strategic and proprietor of Green Hills. "We have seen offer redemption rates exceeding 20 percent, and SmartShop is driving a significant increase in revenue."

A new self-awareness

Wegmans' decision last month to close its 20-year-old in-store video rental departments to make way for Redbox video kiosks shows just how far self-service technology has come. Letting shoppers serve themselves is now being recognized by some operators as a new form of valuable service. They've come to realize that self-service systems, including self-checkout units, kiosks for dispensing information and taking orders, and DVD vending machines, can complement even the most service-oriented operation.

The technology may not be new, but the way some retailers view it today certainly is.

Newport Avenue Market, an upscale supermarket in Bend, Ore., is well known for delivering excellent customer service. As such, owner Rudy Dory only reluctantly considered installing a self-checkout system. He ultimately decided it was a competitive necessity, since most of the retailers in his trade area already had such systems.

Still, Dory feared he might be going against his store's roots, and that shoppers might agree. "I thought my shoppers would view it as a reduction in service levels," he recalls.

Sometimes, guessing wrong isn't a bad thing. After Dory installed the Fujitsu U-Scan self-checkout system, he saw customer acceptance and usage take off immediately. Most shoppers were happy to choose self-checkout for a five- to 10-item basket.

"We saw about 20 percent of our total transactions through self-checkout during the first month, and it quickly escalated to 35 percent by the second month," says Dory. "And we've continued to average right around 35 percent since then."

"Self-service is good customer service," agrees Ray Carlin, c.e.o. of StoreNext, which markets the self-checkout system Dory installed, as part of a suite of solutions aimed at independent grocers.

According to IHL, stores with self-checkout systems see from 25 percent to 40 percent of transactions, and 15 percent to 25 percent of the total dollar volume gravitates to those systems. In a recent IHL Consulting Group/RIS News survey of retailers, The Consumer-driven Store, 60 percent of respondents said they were planning to purchase self-checkout systems by this June.

Self-checkout is sharing the DIY revolution with information kiosks, as consumers seek to learn more about their purchases. Originally designed to deliver health and drug information -- as with the now widespread Healthnotes kiosks often tied to in-store pharmacies -- these freestanding units are popping up elsewhere in the store, serving as founts of information about products in almost every department.

Supervalu's Farm Fresh Stores division, for example, employs information kiosks in the produce departments to make nutritional data and recipe suggestions for fruits and vegetables easily available.

Personalized Marketing Program Has Good Numbers

Among the lakes, hills and gorges of upstate New York, the Green Hills Market began its retailing life as a farm stand in 1934 just outside of Syracuse. It thrived on local products and service that catered to individual customers. But as it has grown into a modern supermarket known for technology innovation, it has found new ways to offer customers its personal touch.

Green Hills is out to perfect the widely held if elusive desire of retailers to market to a large number of customers on a truly one-to-one basis, says proprietor Gary Hawkins. And he's doing it by applying web-based analytics, the same principle that lets web sites analyze online shopping behavior and create highly personalized shopping experiences and marketing offers to the physical store. One of our goals is to bring to brick-and-mortar retailing the capabilities of the online world,he says.

So when a shopper participating in his store's loyalty program walks in the door, the first thing she does is touch a finger to a web-connected biometrics scanning device at a SmartShop kiosk, placed prominently near the store entrance. Within seconds, the kiosk prints out a list of coupons tailored to her recorded shopping behavior.

When she's done shopping, the shopper touches another fingerprint scanner at checkout, which sends a record of her purchases through a web-services-enabled network to a back-end database, where special algorithms work with sales data and promotional data to configure a new personalized batch of coupon offers.

And so the cycle starts all over. The system is designed so that, when the shopper returns a few days later and again touches the SmartShop fingerprint scanner upon entering the store, it will print out a new list of coupons based on her up-to-date shopping behavior.

Customers respond

PBT's SmartShop system is just one example of how retailers are bringing the web into stores as a way of better understanding and engaging customers. The applications differ, but all focus on developing relationships with shoppers to turn them into long-term, profitable customers, and for most that means across multiple channels.

In-store web-enabled devices provide a foundation to provide the highest level of customer service and provide a link to other channels,says Sunita Gupta, executive vice president of retail consultants LakeWest Group LLC in Cleveland. And two things that most retailers talk to us about are how to offer better customer service, and how to satisfy the requirements of multi-channel retailing.

Deployed a year ago in Green Hills Market, SmartShop has elicited an unusually high coupon redemption rate of 20%, Hawkins says. By comparison, the retail industry average for coupon redemptions is about 1%, according to several sources including research and consulting firm Aberdeen Group Inc.

The program is also helping to generate more repeat store traffic and sales, Hawkins adds.

The SmartShop service has been extremely popular, and shopper participation is already impacting 50% of store revenue he says. Shoppers enrolled in SmartShop have increased their visits by 10% over a comparable period a year ago before the program was available, he adds.

Hawkins and his separate consulting practice, Hawkins Strategic, helped develop the SmartShop system with Pay By Touch, a company that also provides fingerprint activated payment devices. Following a test of the SmartShop system by Green Hills, Pay By Touch made it generally available in January and is talking with at least two other large retail chains about deploying the biometrics version.

IMI on Personalized Marketing from Pay By Touch

Foodtown, Shop 'n Save Test 'Personalized' Offers

Regional grocers Foodtown and Shop 'n Save are testing a new loyalty marketing system developed by San Francisco-based Pay By Touch.

Avenel, NJ-based grocery cooperative Foodtown is testing the program, dubbed "Personalized Savings," in three of its 56 stores, while Supervalu-owned Shop 'n Save is piloting the system in three Pittsburgh-area stores under a "Personalized Perks" moniker.

The Foodtown program tailors discounts and incentives to a shopper's own purchase history. Shoppers scan their loyalty cards at kiosks near store entrances to receive customized printouts of 16 offers for frequently purchased items -- eight from national brands and eight from the retailer. The deals are redeemed automatically at checkout when the shopper's card is scanned. The offers refresh weekly.

In addition to a summary of rewards, shoppers receive two or three coupons at checkout. Determined by the retailer, the coupons can be consistent with purchase history or may convey cross-promotions or other chain-driven campaigns.

Foodtown shoppers can also continue to accrue S&H Greenpoints from the landmark national rewards program. Pay By Touch acquired the S&H Greenpoints program from Sperry & Hutchinson Co. in December 2006. Foodtown stores, which are located in New Jersey, New York and Pennsylvania, have been involved with that program since 2000. (See Related Articles on bottom of page.)

Shop 'n Save, which operates more than 70 stores in Pennsylvania, Ohio and West Virginia, is testing a program identical to Foodtown's minus the Greenpoints component.

Designed to reward brand loyalty, the program doubles as an individualized savings initiative. For retailers, it also serves as a tool to track marketing performance.

The two programs are examples of Pay By Touch's new SmartShop loyalty program, which the company is now offering to chains nationally. Although Foodtown and Shop 'n Save are testing kiosk-based systems activated by standard frequent-shopper cards, Pay by Touch can enhance the program through the addition of biometric technology. The SmartShop concept first rolled out to Green Hills Markets in Syracuse, NY, which utilizes the biometrics option.

"SmartShop provides offers that are more relevant, based on what shoppers like and what they want to buy," says Shannon Riordan, vice president of marketing for Pay By Touch. "There are no cross-promotions. If you are a Pepsi drinker, you receive two-for-one offers or coupons for new Pepsi flavors."

Click Here for: A Case Study on PBT's SmartShop

Since introducing biometric identification technology to Seattle's Thriftway supermarkets in 2002, Pay By Touch has launched pilot programs with supermarket chains including Harris Teeter, Pathmark, Delhaize America's Food Lion, Hy-Vee, Alex Lee's Lowes Foods, Piggly Wiggly, Whole Foods, Winn-Dixie and Supervalu's Albertsons, Cub Foods, Jewel-Osco and Sunflower Market. Non-grocery participants include Citibank.

The technology uses a shopper's fingerprint to access payment information, loyalty accounts and age verification. After entering a search code to begin the transaction, users scan their fingers on Pay By Touch readers at the register. Fingerprints also act as loyalty cards, processing savings and collecting purchase data, and systems at some retailers allow shoppers to cash checks and access health care and flexible spending accounts.

The payment system includes a reader adjacent to checkout scanners and a branded, lime-green kiosk near store entrances, where users establish and maintain their accounts.

Promotional activity includes regional enrollment incentives, such as a "Touch of Holiday Cheer" sweeps in Illinois that awarded 10 grand-prize winners with $10,000 in credit for groceries. Supported by headers atop kiosks, the promotion ran from Nov. 1 to Dec. 31, 2006.

The SmartShop concept mirrors the Avenu kiosk program at Supervalu's Albertsons chains, which uses technology from Concept Shopping to deliver personalized offers to frequent-shopper cardholders. (See Related Articles.)
Published: February 2007
Source: In-Store Marketing Institute

RELATED ARTICLES

Case Studies/Category Reports/Profiles

New Loyalty Program Offers S&H Points

Nationwide Dealer Network to Resell Pay By Touch

PLANO, Texas & SAN FRANCISCO, Jan 25, 2007 (BUSINESS WIRE) --

StoreNext Retail Technologies LLC and Pay By Touch have signed an agreement under which the two companies will market and distribute Pay By Touch's biometric authentication and payment service to independent grocers.

The joint solution minimizes grocers' transaction costs while allowing shoppers to pay for purchases with the simple touch of a finger.

Under the agreement, StoreNext, through its nationwide dealer network, will resell the Pay By Touch store-level hardware, software and interfaces to independent retailers in conjunction with StoreNext point-of-sale (POS) systems. StoreNext dealers also will provide ongoing service and support for the systems. Data and transactions from the independents' POS systems are processed through StoreNext's Connected Services suite of Internet-based store management applications, further lowering independents' networking costs.

"Independent grocers need ways to lower payment transaction costs while giving shoppers faster and more convenient service.

Pay By Touch makes low-cost biometric payment easy for shoppers while providing outstanding security," said Ray Carlin, president and CEO of StoreNext. "This agreement makes this state-of-the-art biometric technology accessible to regional chains and independents".

Pay By Touch makes the checkout process faster, more convenient and more secure by eliminating the need for shoppers to present cards, checks or cash at the point of sale. When checking out, shoppers simply touch a biometric sensor and enter a Personal Search number to authenticate their identity and link to their financial and loyalty accounts. Pay By Touch also provides merchants with a quick, precise way to verify age. Of course, they have also derived a lot of attention with the recent Aite Group Report citing the impressive impact of SmartShop.

"With StoreNext's installed base nearing 10,000 systems, our agreement becomes a watershed event for the industry," said John Rogers, founder, chairman, and CEO of Pay By Touch. "Together, we are empowering independent retailers to integrate, implement and merchandise secure, biometric payment options for consumers - a clear competitive advantage."

"The ever-increasing cost of card-based payments puts smaller grocers among the greatest beneficiaries of our services. Pay By Touch and StoreNext with Connected Services provide quick checkout, shopper convenience, dramatically lower costs and reduced fraud all at once."

StoreNext will market Pay By Touch as a complete plug-and-play solution, which includes StoreNext's ISS45 or ScanMaster POS system and the WinEPS electronic payments system. The MTXEPS, Inc. WinEPS system is the core payment engine used by many major retailers and independents throughout North America.

About Pay By Touch
Pay By Touch ( www.paybytouch.com) is wowing the world one touch at a time as the global leader in biometric authentication, personalized marketing and payment solutions. To date, the company's patented biometric services enable 3.5 million shoppers to quickly and securely access personal accounts using a finger scan to identify themselves, make purchases, earn rewards and cash checks at 3,000 locations nationwide. It also provides robust payment processing solutions for ACH (electronic checking), card-present and card-not-present debit and credit transactions for retail clients. Founded in 2002 and headquartered in San Francisco, Pay By Touch employs 800 professionals and holds more than 50 patents worldwide on secure, convenient and cost-effective transaction solutions.

About StoreNext
StoreNext Retail Technologies LLC is the No. 1 supplier of retail technology to independent grocers and regional chains. Based in Plano, Texas, StoreNext is a joint venture of Retalix Ltd. (RTLX :
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RTLX 19.27, -0.07, -0.4%) and Fujitsu Transaction Solutions Inc. markets Fujitsu POS hardware, Retalix's ISS45 and ScanMaster POS software, Retalix Store and Retalix HQ, as well as Internet Connected Services for managing stores via Web-enabled applications. StoreNext is the IT company that's dedicated to meeting the needs of this wholesaler-served market with packaged solutions that were previously available, affordable or practical only for large chains. Web site: www.storenext.com.

For sales and product information call (972) 265-4800.

SOURCE: StoreNext Retail Technologies LLC

A Case Study on PBT's SmartShop

Biometric Payments and Rewards: A Case Study

Aite Group provides an in-depth review of the deployment of Pay By Touch technology at a grocery store named Green Hills. Nine months after the introduction of Pay By Touch's SmartShop loyalty and payment solution, 25% of Green Hills' sales are made via biometric payments, and 28% of those are processed over the Automated Clearing House (ACH) network.

Boston, MA, January 23, 2007 – In a new report, Biometric Payments and Rewards: A Case Study, Aite Group discusses the roll-out of Pay By Touch technology at Green Hills, a one-store grocery that is headquartered in Syracuse, NY.

"Given the economic context in Syracuse, NY, Green Hills' pre-existing high average sales per square foot, the sophistication of the previous loyalty program, and the store's stagnant top-line sales in the years leading up to SmartShop's roll-out, the impact of SmartShop on Green Hills' financial performance is impressive," comments Gwenn Bézard, a Research Director with Aite Group and the author of the case study.

In the United States today, beyond two-tier pricing schemes (e.g., grocery stores) and loyalty programs that are tied to private-label credit cards or dual cards (e.g., specialty retailers), most retailers lack sophisticated loyalty programs.

The development of private- label merchant debit/prepaid payment and reward programs is a significant trend that has the potential to reverse that situation, as illustrated by Green Hills' story.

This 8-page Impact Note contains 3 figures. Clients of Aite Group's Retail Banking can download the report by clicking here.

Retailers Tap Into Biometrics

Some executives say that payment technology, known as biometrics, will start to become more commonplace in the retail industry this year.


At a seminar held Wednesday at the National Retail Federation's annual convention, Green Hills Supermarket CEO Gary Hawkins and his son, Sterling Hawkins, vice president of retail industry consulting firm Hawkins Strategic, discussed how biometrics can help personalized marketing.

Do you clip coupons? If so, you're in the minority. Fewer than 1% of coupons ever get redeemed, according to coupon-processing firm CMS. With this unique new personaized marketing program, a supermarket customer logs online, browses special offers created specifically for them based on past purchases, creates a shopping list and then goes to the supermarket where he or she can print out the list. Once the consumer is finished shopping, they can pay via a machine that reads their fingerprint and accesses their stored information, eliminating the need for a credit card or cash.

"It's personalizing shopping," said Sterling Hawkins. "Think of it like a customized ad flier." Instead of sending out 100,000 "generic" fliers and getting less than 1% return, we provide the customer with targeted offers. It will save hundreds of thousands, if not millions, in marketing expenditures.

The system offers advantages over loyalty cards, which are often misused, says Gary Hawkins, including cashiers using their own loyalty cards for shoppers or people swapping cards.

Since the father-and-son team launched the program at Syracuse, N.Y.-based Green Hills in May 2006, 50 percent of sales and transactions are done biometrically, Gary Hawkins said. The program gets 100 new enrollees every week, and customers who enroll typically spend 6 percent more and shop 10 percent more.

While the program exists on a small scale at the supermarket, it can be applied to larger retailers, Gary Hawkins said. He predicts an explosion in using the technology in 2007.

"Personalized marketing is moving into retail," he said. Click Here To Read an Individualized Marketing Whitepaper. (PDF File)

Backgrounder

Green Hills was one of the first supermarkets to deploy loyalty cards, having done so in 1993. It was named "The Best Little Grocery Store in America" by Inc. Magazine.

Green Hills CEO Gary Hawkins achieved significant gains in margin and customer retention with the loyalty program by collecting and analyzing data and using it to personalize the store’s marketing. As a result, he began consulting and advising other retailers (and other industry executives) on how to accomplish this.

Accordingly, Hawkins started a consulting company called Hawkins Strategic, through which he consults for retailers and manufacturers, including global consumer goods manufacturers. Hawkins often uses the Green Hills supermarket as a laboratory, where he experiments with new marketing strategies.

“Two years ago, Pay By Touch contacted me to see if I was interested in pursuing using biometrics to enhance the loyalty program at Green Hills,” says Hawkins. “After significant research, we decided to deploy a payment and loyalty program, called SmartShop, powered by Pay By Touch, at our store. SmartShop is accessed by customers using their fingers, so the loyalty program is distinguishable by individual and by household, and discounts are provided that way as well.”

“Existing customers who choose to continue participation in Green Hills’ loyalty program enroll in the SmartShop program by creating a new identification code through Pay By Touch,” says Hawkins. “Customers can enroll in just the loyalty program or the loyalty program combined with an automated wallet of payment methods. The system accepts any payment method customers choose — any type and any number of credit cards or ACH [automatic clearing house] transactions.” Customers can enroll while visiting the store or the store Web site, in which case the customers’ finger images are linked to their account information during their next visit to the store.

Finger Provides Access To Coupons, Rewards, Payment Methods

When using SmartShop, customers receive store offers through a store kiosk (by placing fingers on a sensor to access their personalized accounts), e-mail, or a pre-established, personalized Web page. The account also provides access to an online grocery list, the weekly store advertisement, and personalized advertisements.

Household members can create grocery lists through the store’s Web site that can be accessed later and printed in the store by another member of the household to complete the necessary shopping. Upon checkout, the shopper places a finger over the sensor to redeem personal and public sales discounts.

Payment options also are accessed in this manner, as are store rewards, such as free merchandise, and other store promotions. Historical purchase information is made available to the Pay By Touch system.

A library of possible personalized offers (currently 150 offers per week) is available. These are compared to each shopper’s purchase history, and 20 personalized offers are presented to each customer each week. This number may increase; it was selected initially because it fit nicely on an 8½-by-11-inch piece of paper.

Pay By Touch Delivers the First Personalized Marketing Solution

Pay By Touch Officially Launches SmartShop, the first Personalized Marketing Solution for Retail Environments

SmartShop combines Pay By Touch's patented biometric technologies with its data-driven marketing services to provide the first truly personalized marketing solution for retail environments.

SmartShop, powered by Pay By Touch, gives shoppers customized offers on the products they buy most when they enter the store - before they shop. It provides merchants and consumer packaged goods companies (CPGs) with an unprecedented return on investment (ROI) by enabling them to deliver the right offer to the right shopper at the right time - both in-store and online.

"Together, our biometric and personalized marketing technologies will fundamentally change the way the world shops," said John Rogers, Founder, Chairman and CEO, Pay By Touch.

"SmartShop offers unparalleled targeting based on shoppers' known preferences and established buying habits in that particular store. There is simply no better way for merchants and manufacturers to reach their targets."

Research shows that 70 percent of buying decisions are made in the store, and that less than one percent of grocery store coupons are ever redeemed.

As a result, millions of marketing dollars are wasted every year.

SmartShop turns every shopper into a uniquely qualified marketing lead and offers unprecedented value to consumers, merchants and manufacturers alike. It provides shoppers with highly relevant offers and saves them from hours of sorting through mass media and clipping coupons.

Here's how it works:

1. When shoppers enter the store, they simply scan their finger at the SmartShop kiosk to get personalized offers based on their purchase history.

2. Shoppers receive an 8 1/2 x 11 print out with 12 to 16 customized offers for the products they buy most, and then head into the aisles to shop.

3. Shoppers scan their finger again at check-out to automatically redeem their offers. They do not need to bring the print out; no paper coupons are required.

One of the country's most innovative grocers, Green Hills Market of Syracuse, New York, was the first to test the SmartShop service.

"The SmartShop service has been extremely popular, and shopper participation is already impacting 50 percent of store revenue," said Gary Hawkins, CEO, Hawkins Strategic and Proprietor of Green Hills Market. "We have seen offer redemption rates exceeding 20 percent.

Of the customers enrolled in SmartShop, who also shopped last year during the same period, their shopping visits have increased by 10% per week."

"Most importantly," Hawkins added, "SmartShop is driving a significant increase in revenue in a time of new market competition from big box stores. It has given us the tools to compete more effectively and not only retain customer loyalty, but attract new customers."

SmartShop provides merchants with customer-based metrics and accurate data that improves the efficacy of marketing efforts. It is easy to implement, with a Web-based management system for algorithmic campaign creation and real-time targeting.

Best of all, SmartShop's sophisticated targeting engine 'learns' from each shopping trip to generate the next set of rewards. It provides robust analytics to make reporting and account settlement easy and accurate.

Pay By Touch has been developing and acquiring personalized marketing technologies since early 2005 when it acquired 7th Street Software and Convena - two loyalty technology providers - and Capture Resource, which offers turnkey solutions for card-based loyalty programs.

The final building block for SmartShop came through Pay By Touch's acquisition of technology partner, S&H Solutions in December, 2006.

Many years and more than $200 million dollars have gone into developing S&H's retail marketing technologies, including a sophisticated algorithmic offer engine that enables retailers to deliver personalized offers in-store through multiple platforms.

PBT Releases Kiosk Program

Self-Service Kiosks


Do your shoppers receive “Loyalty Cards” without giving you complete enrollment information? Do you regard the “Loyalty Card” as anything more than a discount card from which any shopper can benefit?

If you are serious about rewarding good shoppers on a personalized basis to increase their level of loyalty to your stores, you must look carefully at your enrollment process.

Although Pay By Touch Personalized Marketing uses edits and sophisticated data entry tools to maximize the value of information from traditional paper-based enrollments to Reward Programs, there are inherent obstacles in such a process that keep you from successful communication with all of your loyal shoppers.

In a traditional paper process, enrollment data cannot always be checked for accuracy, completeness, or validity before a card is issued, for card-based enrollees. It often can be weeks, or longer, before store personnel submit the paper applications for data entry. There is no way you can communicate with these shoppers during this time.

SmartShop™ includes self-service kiosk enrollments that can be biometric (finger scan) or card-based. Time used by store personnel is reduced, enrollment information is automatically populated via Drivers Licence scan or real-time reverse phone append to assure accuracy, and the profile information is immediately added to your database.

Requiring only an electrical outlet, these kiosks offer ease of placement due to wireless technology. Splash screen content can display variable specials and promotions.

The kiosks offer additional revenue opportunities from manufacturer advertising, and they are centrally monitored for maintenance and performance requirements.

Each kiosk is also capable of dispensing custom printed gift cards.
Click the picture above to enlarge and read.