Grocery stores all over the United States use coupons to compete for customers and keep customer loyalty high. Safeway produces coupons on demand based on the products currently in the customer’s cart. Kroger analyzes customer loyalty data gathered over several years. Knowing most customers throw junk mail in the garbage, Kroger uses analytics to mine the customer loyalty program data to ensure the coupons are specific for each family, offering only items they have bought in the past. Kroger mails over 15 million coupons per quarter. Safeway and Kroger are gathering data at different points in the supply chain. Safeway does not gather customer data and only analyzes what is currently in the customer’s cart, giving coupons in real time to all daily customers. Kroger gathers customer data over several years and mails coupons based on historical data to loyalty customer cardholders only.
- What are the pros and cons of using these two different strategies to product coupons?
- Explain how coupons impact the extended supply chain for a grocery store?
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