BACKGROUND
The first Food City store opened 1918. Today, Food City is a regional supermarket chain (K-VA-T) with over 130 stores located in Georgia, Kentucky, Tennessee, and Virginia. A privately held family and employee-owned company, Food City is dedicated to its mission to ‘run the best store in town.’
CHALLENGE
To deliver on its promise, and in the face of ever-increasing local competition from the likes of Kroger, Walmart, Publix and CVS, Food City recognized that its most direct path to success was knowing its customers and meeting their needs better than the competitors. They had to sidestep the anecdotal beliefs around customer behaviors and accept the reality of facts provided by a good understanding of their data. They also needed the ability to target offers more precisely by taking a different perspective – that of their customers.
SOLUTION
By working with Symphony RetailAI, Food City was able to execute much more targeted marketing campaigns as they began to reap insights from their customer data. Because these insights are not served up in a vacuum, but rather given with suggestions for immediate action, Food City became more nimble and better able to serve their customers.
The speed at which they were able to gain insight into their data — compared to having to wait weeks to have data analyzed as in the past — helped them communicate with customers more effectively.
In perhaps the most rigorous test of their partnership with Symphony RetailAI, Food City put their new data insights to work when they had to close one of their prime location stores for 17 weeks. By using customer intelligence and insight from that store, Food City sent a combination of weekly triggered coupons and mailers. By changing variables in their marketing based on previous marketing efforts they were able to impact customer retention, driving customers back to the original store and to other stores as well. Even more impressive, on average, Food City increased basket spend of these retained customers.
“Closing a store for refurbishment is never an easy decision, particularly when major competitors are in easy reach of our customers. When we started, the goal was to retain 27% of the business. We actually retained 70%! So not only are we keeping the primaries, keeping the secondaries, but we’re also growing the business in addition to that. Once Symphony RetailAI provides you initial results, you get really excited about what you can do and how it can affect your business. In summary, the one who uses the data the best will win in the end.”
Kevin Stafford, VP Marketing, Food City
BENEFITS
Through partnering with Symphony RetailAI and better insight from its data, Food City has been able to move from a culture of opinion- to fact-based marketing planning in which it can execute on more targeted customer initiatives. For example, it has a much better understanding of who comprises its primary, secondary, and price driven customer groups.
Less than a year into the partnership, Food City has seen many benefits:
- A highly successful ad campaign targeted at price-driven customers resulted in a sales increase of 86%, up 64,000 customers, with total sales increasing 1.4%, despite having 3 less stores year over year
- A distinct targeted mailing campaign led to a 3% increase in sales, as well as drawing in nearly 6,000 customers in stores who had not shopped with Food City in the previous 6 weeks
- Coupon redemption rates for their primary customers increased from 12% to 25%