Is Customized Supermarket Pricing Gleaned From Loyalty Cards Creepy Or A Good Thing?

Whether you’re one of those shoppers with way too many grocery store loyalty cards or just a few, swiping those at checkouts could be doing far more than just giving you a few cents off your favorite cereal. Stores like Safeway and Kroger are building up their research on how their customers shop, developing customized pricing on the things you like the most. So is that a creepy invasion of privacy or worth it if you save money?

While some stores have already found themselves in sticky situations by customizing offers based on shoppers’ preferences — for example, Target accidentally tipping off a teen’s dad that she was pregnant before she told him — many customers are welcoming the discounts that sometime are offered just to them.

The New York Times checks out some of the changes going on in the supermarket arena, including one comparison of products that are priced differently based on who’s buying it. One shopper who buys a certain brand of products gets a deal on a 24-pack of bottled water that she doesn’t usually buy, just because she is a fan of their other offerings, whereas her fellow shopper would pay almost a dollar more for the same product.

Offering different prices for customers isn’t a new thing — after all, savvy shoppers who use coupons have been getting cheaper deals in the grocery aisles for a long time. But is it different, creepy or an invasion of privacy for supermarkets to mine your personal data and target you with such deals, or does it matter if you want the best price? It’s up to each shopper, perhaps.

Safeway’s personalization program started in stores this summer with offers aimed at certain customers, and it might even start to adjust prices based on its shoppers’ habits as well. The company seems pretty confident this is the way to go.

“If our consumer information is right, personalization is really a consumer desire right now, not so much a consumer fear,” Michael R. Minasi, president for marketing at Safeway told the NYT.

Some stores like Stop & Shop are testing out a way to offer deals on the spot: When customers scan an item they’re buying using a special app, a deal could pop up for something related in that same aisle. This could be pretty useful — you want hot dog buns? Maybe you also need hamburger buns, too! Here’s a discount.

Feel free to share any of your own stories of customized and personalized deals in the comments — whether they creeped you out or left you feeling satisfied that you could nab a discount.

Shopper Alert: Price May Drop for You Alone [New York Times]

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  1. pecan 3.14159265 says:

    About a year or two ago, Giant Food sent coupons giving you $5 off a $50 purchase. I was amazed at how many people threw them out. It was even printed like the Bed, Bath, and Beyond coupons (you know, post card size or bigger) so you couldn’t just mistake it for a circular. The lobby trashcans were filled with them. I took all the ones I could find without digging into the trash, and kept doing it for the next few days. I think I saved about $60 just by using the coupons other people kept throwing out.

    • Not Given says:

      I just used a $5 off of a $25 purchase yesterday to pick up a few things from my shopping list.

    • Jawaka says:

      Big Y does this. The problem is that they print them on your receipt when you check out and usually only have a one week expiration date. The problem is that I don’t go shipping every week so most of the time they’re wasted which I’m sure is their plan.

  2. HeisenMeg says:

    I get semi-personalized coupons in the mail from King Soopers about once a quarter. It’s usually a mix of “here, get this thing we notice you buy a lot free or at a discount” and “here’s discounts on some other random things we think you might buy”.

    I get free baking supplies out of it, so I can’t complain :D

    • MeowMaximus says:

      I love King Soopers, and since I order on line, I get all the discounts automatically. Those customized coupons are a nice bonus.

  3. Bladerunner says:

    I buy a lot of expensivey hippy crap (since I can’t do wheat, and I don’t do meat, and a lot of the non-meat has wheat, I have limited hippy options), so I wouldn’t mind it because it would be likely to give me a benefit, but it is kinda creepy.

  4. AdamBC says:

    I do enjoy the handheld scanners that they encourage you to use at Stop&Shop. Wouldn’t surprise me if that’s how they pick the ‘special deals’ only available to people using the handhelds. Wonder if I’ll start seeing more ‘since you bought this, we recommend that’ offers appearing on screen.

  5. MickeyMoo says:

    I think I’ve witnessed this on Amazon to a lesser degree with prices dropping after something sits in your cart a few days, then going back up even higher than the original price when you go look at it again. Safeway’s system seems a little gimmicky in how you have to add specials, Just4You prices, and coupons all separately to your card, and the website isn’t nearly as seamless as it could be. Can I vote 50% Creepy/50% Good Thing? (every penny saved counts with this economy)

  6. MaxH42 needs an edit button says:

    I find something inherently creepy and unfair about targeting these “secret” deals. I’d rather they were open to everyone, even if they’re not advertised. But then, why wouldn’t they let everyone know, it should increase sales, right?

    • George4478 says:

      If you think it’s creepy to have a company track your sales and offer you customized deals, you probably shouldn’t voluntarily sign up for a program that tracks your sales and offers you customized deals.

      ‘Cuz then you’ll be creeped out.

    • Xerloq says:

      It might increase sales, but the brands you buy are the ones paying for these discounts. Sales go up, but brand margins go down. The brands work with stores to put certain items on promotion to encourage new consumers to try products, not subsidize the existing consumer purchases.

      A lot of research goes into pricing and price sensitivity. Take frozen dinners, for example. There are consumers who will buy them regardless if they’re at regular price of $2,99 each, or if they’ve got a coupon for $0.50 off. Why would a business (from their point of view) want to reduce the price if their main customer is willing to pay $2.99?

      Then, there are other consumers who will buy them if the meals are $1.99 or less. How does a business get these consumers to buy without cutting into their margins on the regular customer?

      These types of programs let the regular consumer purchase at their max price point of $2.99, and the other consumer at their max price point of $1.99, and everybody’s happy: all the consumers have a product they want at a price they’re willing to pay, and the stores and brands have more sales.

  7. hokiehor14 says:

    I love the new safeway thing. I hope it gets very accurate after some use. I couldn’t even come close to caring if a supermarket tracks what I buy. So for me this is perfect. Why would anyone care if it made shopping easier/cheaper/faster? Got me

    • akiri423 says:

      It does get better after you use it. The personalized deals that I get tend to be either for products that I’ve already purchased or for things that are similar (same product, different brand). Combine it with the regular club card sales and the deals can be significant.

      I also have the benefit of it not being particularly creepy since the cashier, when I signed up, didn’t actually submit my card information, so while there’s no phone number attached to my account if I forget my card… there’s no phone number attached to my account. ;)

    • hawguy says:

      As long as the information stays within Safeway and isn’t sold to other companies, then it’s not so creepy. But when Safeway sees you buying gallon tubs of ice cream and 2 cases of soda every week and suddenly you start getting flyers in the mail from a weight-loss clinic, then it’s progressed to the creepy level. I really don’t want my buying habits sold to the highest bidder — I don’t really want anyone tracking how many condoms I buy in a week, and I don’t want a potential employer to reject my job application because I might be too expensive on their health insurance plan because I buy 2 cartons of cigarettes every week.

      I don’t know that Safeway sells your buying habits to other companies, but I don’t think there’s anything stopping them from doing so.

  8. chefboyardee says:

    I don’t see how it’s creepy. When you sign up for a loyalty card you KNOW that’s what it’s for. Why would you sign up for the card if you didn’t want exactly this to happen? I welcome discounts on the items I use most. I don’t care if Johnny Shoprite knows that I prefer Simply Orange to Tropicana.

    • George4478 says:

      Exactly. This is WHY I joined the program — to get good discounts on things I buy. Kroger sends me coupon packs (2 so far this month) tailored to my past purchases. I will use at least 80% of the coupons, compared to the near 0% from the random mailers that get put in my mailbox.

      I think it’s a great deal.

  9. elangomatt says:

    This is a new thing? For years now Kroger has been giving me checkout coupons for similar products but different brands for things I buy. I thought that was SOP for stores with “track me” loyalty cards.

    • MaxH42 needs an edit button says:

      To me, the difference is that giving me the catalina coupons for certain items is a marketing strategy to make a particular purchase more attractive, and I could still give those coupons to whomever I want. Giving me and only me a discount upon checkout for specific items feels strangely manipulative and controlling to me.

      • elangomatt says:

        I think that the bigger issue is probably the fact that you are actually seeing how good of data they have on you. Allowing stores to track your purchasing habits is the trade off of using the shopper cards at the register. Up until now, you’ve should have known that they were collecting the data but it wasn’t very clear what they were actually doing with it. Now they are actually showing their hand a bit and giving you even more benefits to letting them track your data. To be honest, I’ll welcome the savings if they want to give it to me.

        • MaxH42 needs an edit button says:

          No, I’m quite aware of how marketing works, and how extensive marketing research is by all kinds of retailers and manufacturers. But as I said, the attempt at more actively manipulating which particular consumers buy which particular products bothers me. Still, with all we’ve read just here about “extreme” couponers, I’m not surprised at all that retailers and manufacturers are trying to shift the focus to those who are currently using them less or not at all.

      • Xerloq says:
  10. SnickerDoodle says:

    Everything has a price, the store gets your information you get a discount. I don’t use store cards because it feels strange, like i’m being followed; and I am.

    I would much rather lower prices across the board.

  11. nodaybuttoday says:

    I don’t particularly find it creepy. I mean what can they really do with information on what brand of shampoo I buy?

    • FredKlein says:

      You buy Brand ‘X’ shampoo? You do know that Brand ‘X’ has manufacturing plants in MadeUp-istan, instead of here in America. You therefore don’t support America, and I’m turning you into the Un-American Activities Committee.

      You buy Brand ‘Y’ shampoo? the manufacturer of Brand ‘Y’ tests shampoo on little fluffy bunnies. Maybe I’ll turn your name over to PETA.

      You buy Brand ‘Z’ shampoo? That company is pro [or anti] gay/abortion/Christian/etc. Maybe your unpopular views need to be publicized….

      See the possibilities?

      • longfeltwant says:

        You’ve got it completely backwards. The secret aliens on the dark side of the moon were controlling the minds of all humans starting way back in the renaissance. We were slaves to the aliens, except for a tiny sect of rebels who eventually developed a technology to block the alien’s mind-control device. They have been distributing that technology disguised as grocery store discount cards, helping to wake up from their numb alien slavery. If you don’t use the card, then you can’t block the mind control device, and then the aliens could turn your name over to PETA, or maybe publish your unpopular views about abortion.

        See the possibilities?

    • Xerloq says:

      They’ll use that data to see how often you buy shampoo, which brands, do you switch, what else is in your cart, do you buy anything else on the trips before/after buying shampoo, etc.

      They’ll also measure how profitable of a consumer you are to them. Do you only buy on sale? With coupons? After the FSI (inserts) in the Sunday paper comes out? If they like you they’ll send you more/better coupons for similar products ($1 off, BOGO, etc..). If they don’t like you, they’ll start sending you worse coupons ($0.35 off, for example).

      Then they sell the info to your brand of shampoo, their competitors, or anyone else that is interested in shampoo buyers, along with all of your behavorial data.

      Then, one day, you stop to check your mail on the way to the store to buy shampoo and see a coupon for a competitors brand shampoo, and it won’t be a coincidence.

  12. jenolen2161 says:

    I read the article before seeing it on here–our Stop and Shop just reopened today after a remodel and a good source tells me we now have those scanners. I’d love it if I could save money on “real” food like produce and meats instead of the crap they always offer coupons for.

    I’m in the 50/50 boat: like it, but am slightly creeped out by it. Plus, what happens when my husband, who has no concept of coupons, sales, or other things I normally use to save money, makes a purchase and then ruins my metrics?

  13. CrazyEyed says:

    A cool thing Wegmans does with their bonus card is tracks purchases made on recalled items. If there’s a warning on a product, and you used your loyalty card at the time of purchase, they will call you and warn you about your recent purchase. Not that it happens often but I always found it a nice touch that they were being accountable and forthcoming.

  14. menty666 says:

    With waning price labeling laws and odd pricing schemes (unit costs in odd measurements for example), it’s difficult enough to tell what things might cost. Now after I’ve taken an item and schlepped a few aisles over to find a working price scanner, that price might not actually be the price?

    No thank you.

  15. Sad Sam says:

    I do not like dynamic pricing. I don’t want to be charged a different price based on some behavior dynamic that corporate america is tracking. I think there is a big difference between rewarding loyalty and charging different people different prices based on past purchases.

    I assume corporate america is being very careful but what happens if and when people are charged different prices based on their neighborhood, their race, their tendency to buy higher priced goods, etc. I don’t know why anyone would think that dynamic pricing is going to ultimately favor the customer, rather its going to hide the true price such that we can longer comparison shop and make informed decisions.

    After being a J Crew customer for 20+ years I noticed they were offering me different pricing based on whether I was doing my shopping on my home computer or my work computer (which is routed through a network such that it appears that I’m located in an expensive northeast city). I haven’t shopped at J Crew since.

  16. Not Given says:

    If I’m turning over my information, I want all the good prices not just the ones they think I should get.

  17. DemosCat says:

    Here’s what I wonder about: will the grocery stores begin to behave like the big banks? Meaning, only the high-volume shoppers get the best deals?

    Walmart already distinguishes between high and low income neighborhoods, stocking the cheap crap in Walmarts near lower-income neighborhoods, and the better stuff in stores near higher-income neighborhoods. So if the nearest Walmart happens to be located in a lower income area, I have to drive out of my way to a “good” Walmart to get the better stuff. This in turn reinforces Walmart’s red-lining behavior.

    • Not Given says:

      There are 2 Walmarts and a Sam’s in the town where I go for big stock up trips. I usually hit all 3. The Walmarts often have different stuff.

  18. Cooneymike says:

    Charging different prices to different consumers violates a variety of laws in most states, including mine. The Department of Weights and Measures has specific regulations insuring stores don’t have discretion on who to charge what.

    It is possible to mail out discounts or coupons to more loyal customers, but big stores will be hesitant to do it that way unless completely random or uniform due to the potential allegations of civil rights violations.

    • MuleHeadJoe says:

      Loyalty card programs are open to all customers, hence there is no discrimination … you just have to actively *choose* to engage with the program in the first place. It’s just like clipping coupons … those who choose to clip and redeem the coupons reap the benefits.

      Producers offer the coupons in the first place in order to drive sales of certain products … many (if not most) people will be more likely to buy a higher priced item if there is a coupon for it, even if the coupon savings don’t completely cover the price difference to the lower-cost competition. Producers also count on some percentance of these coupon clippers to become habituated to certain products, and more likely to keep buying said product even without coupons.

      I’m signed up on Safeway’s program, and about 50% of the weekly offerings are for shyte that I’ve no interest in buying … but as long as they do offer discounts on some of the stuff that I want, that makes up for it in my view.

  19. PragmaticGuy says:

    I think personalized advertising is great. Saves me time from having to see all kinds of popups on the computer or leafing through extra junk mail. Wish they could do something like that on TV as there are commercials I don’t mind watching as opposed to most of the ones I do.

    • MuleHeadJoe says:

      I think the exact opposite … I don’t want to see ‘personalized’ advertising based on my purchase history at all. That means that I won’t be exposed to new / different / potentially interesting or rewarding services & products. I don’t need to be ‘advertised at’ for the shyte I already buy … I buy the stuff I already know I like *because* I already know I like it.

      Advertising the same or similar stuff won’t result in more or new purchases by me, it’s just annoying. I buy “brand X” soda pop … don’t send me personalized ads for “brand Y” because I won’t buy it … I buy Brand X because I PREFER brand X. What could you advertise at me instead? anything … if I drink soda pop, maybe advertise shoes. If I buy shoes, advertise bread. If I buy bread, advertise gasoline. I don’t know, I don’t care, except I despise advertising for products that I already buy or have already bought, especially when said purchase is one of those kinds of things one simply does NOT buy on a regular basis. For example, I bought some sandals online … now all these different websites advertise sandals at me. I’VE ALREADY BOUGHT THE ONE PAIR OF SANDALS THAT I’M GOING TO BUY FOR THE FORESEEABLE FUTURE. I’m not going to buy more sandals regardless of how much you advertise them! Additional advertising for sandals just makes me HATE the advertiser. I definitely need to clear my cookies & browser cache ;-)

      • FluteAphrael says:

        I agree. I don’t like targeted advertising because 99% of the time they have no idea why I bought what I did. For instance, I tend to watch movies because an actor or actress I like is in them. Not because of a particular genre or director. I have yet to get a single recommendation from Amazon that tracked me properly at all. Because they don’t know what my purchase criteria ARE.

  20. HungryHippo says:

    Creepy or not, this is the future and this sort of thing will continue. Companies collect so much information on customers from a ton of different channels (social media, loyalty cards, purchase date, etc) and are on a race to see how to monetize on it. One of the hottest topics corporate America right now is tackling “Big Data” for customer insights and marketing and yes, that also includes predicting our every move before we even realize it. The younger generation probably won’t mind as much as they are growing up with this and the idea of privacy is shifting.

  21. Bodger says:

    I have a single grocery loyalty card: Kroger. Right now Kroger sends me a package of customized coupons every month. Sometimes they are for items I buy frequently. Sometimes they are for competing brands of similar items. Occasionally a coupon will seem to have no connection to my past buying but not often. Sometimes the coupons are for rather trivial amounts, sometimes they are quite generous: free eggs or free carrots or $3 off it you spend $15 in a given department. This is in addition to the 5% off I get every Wednesday as a senior citizen. It is all to the good or at least not to the bad.

    If Kroger was to offer me these reduced prices without the coupons what would be the difference? They would save postage and printing costs. They would save me the trouble of sorting through and bringing the coupons. On the other hand they would lose any good will benefit unless they found some other way to tell me how beneficent they were. The product’s makers would lose the benefit of the advertising boost unless they find another way.

    In any case I wouldn’t feel bad if they wanted to give me reduced prices on everything — they already know my shopping habits in great detail and whether they send coupons to selectively reduce prices my privacy is being invaded (or not) to an equal extent. I’ll take anything which makes food cheaper and makes shopping easier.

  22. longfeltwant says:

    Someone explain to me how this could EVER “save money”.

    Premises

    1.) The program costs more than zero to administer.
    2.) Stores want to make the same percentage profit as always, or higher.

    Conclusion

    3.) Customers will pay more with this program in place, not less.

    If we want to go the way of Mexico and have haggle pricing, then okay, but you better expect it on every item. If not, just list your best price.

    • MuleHeadJoe says:

      1) the program drives sufficiently increased revenues, hence profits, to outweigh the cost of administering the program
      2) stores will cut margins on some products as an incentive to consumers to buy more in general which again leads to increased revenues and profits.
      3) customers “pay” with their personal information (being able to track purchasing data in depth allows more accurate stocking / pricing decisions which leads to reduced overhead for the company)

  23. sakanagai says:

    Sam’s Club has been doing this for some time. Their e-Values program adapts to a member’s buying habits to generate useful discounts. Creepy? Maybe, but you have to opt-in. It is convenient, though.

    • erinpac says:

      I wish Sams did. It never includes anything I buy there, and often has things that are useless to advertise to me (like baby stuff). A lot of these programs do track and adjust to some degree, but as far as I can see e-Values gives the same coupons to everyone who uses it. You can even look up what the coupons are that month without your specific account, so it doesn’t seem like it could change much.

  24. Emperor Norton I says:

    Safeway started this at Dominick’s in Chicago just about a year ago.
    Apparently, the NYT didn’t know about this until it spread to California a couple of months ago
    Until 10 days ago, a gallon of milk was $1.97 on Just For U’s personalized deals. It’s now $2.19, which is still cheaper than anyone else.

  25. delicatedisarray says:

    Kroger sends me personalized coupons. They make me insanely happy. I get $5 a $25 purchase. Oh, here is a coupon for the shaving cream you buy, have it for free this time. Save $1 on the apple sauce you buy weekly. They are all usable coupons for the stuff I am already buying. They aren’t for different/more expensive brands, they are to keep me coming back to their store to buy what I always buy. It works and I keep going back.

  26. AzCatz07 says:

    I get them from Fry’s, which makes me very happy. They tend to send me coupons for the things I already buy. Generally I’ll get about five coupons in the packet that are free something (razors, ice cream, cans of soup, etc.), some discount coupons and then a couple for an amount off my total. Very nice, and it doesn’t bother me in the least.

    I also use their gas program, so that’s good too.

  27. soj4life says:

    I have noticed that food lion does this with their coupon printer in the front. I kind of figured that we would see something like that.

  28. LEDZEPPELIN24 says:

    We just got a Kroger “Thanks for being a loyal customer” coupons. My mom is happy. At least it is almost all about stuff we buy. And a free thing of Thomas Bagels. LOVE ME SOME BAGELS!

    • elangomatt says:

      Yeah, bagels are great. Too bad Thomas Bagels aren’t really bagels at all. Even the Panera Bread bagels are much more closely related to a real bagel. Unfortunately, the term “bagel” has been used for so many inferior round hunks of bread with a hole in the middle that people don’t even know what a good bagel is anymore.

  29. Bob A Dobalina says:

    I just say “My wife has our card, Do you have one I can use?” Amazingly enough, most stores have one at the register they will swipe for you.

  30. strouthesm1 says:

    You’re all missing the point. The customized pricing merely lowers the price to the “regular” price. Everything else is inflated. Nobody is losing any money.