PARKnSHOP - driving greater retail loyalty

PARKnSHOP is the leading supermarket chain in Hong Kong, with an unrivalled reputation for giving customers outstanding value for money, the highest quality in fresh food, an unmatched range and world-class service.

Since the opening of first store in 1973, it has grown into a network of more than 230 stores in Hong Kong andMacau, with dedicated staff who pride themselves on their commitment to innovation and superior quality of service.

Jessica To, Marketing Director (Greater China) forPARKnSHOPshares her thoughts with us on the reasons behind the continued success of their loyalty programme and also some of the future challenges they face.

1.      Why did PARKnSHOP decide to launch a loyalty programme back 4 years ago? 

We launched our new loyalty programme (called 'MoneyBack') with the primary aims of better understanding the needs of our customers, enhancing our capabilities to mine data, segmenting customers and ultimately increasing customer basket size and profit.  Hong Kong is a densely populated city, people shop either daily or several times per week as there is always a supermarket just a few steps away their homes.  So the key challenge for PARKnSHOP is not to increase customers shopping frequency, but to uplift their basket size. MoneyBack is also an effective below-the-radar tool to get higher share of wallet in competitive locations.  

Furthermore, there are other large scale branded supermarket chains focusing on the lifestyle and international segments, covering both Japanese and Western styles. PARKnSHOP has the largest share of these segments in the supermarket industry but the challenge is that there are significant choices in such a small place, so it is crucial for PARKnSHOP to establish a long-term and meaningful relationship with its customers. 

2.      What were the major challenges when implementing the programme? 

AlthoughHong Kongis pretty homogenous with 95% of the population Chinese; within the ethnic Chinese group, people have different needs in terms of food.  There are wine lovers, organic food lovers or customers who are in flavour of international products.  And at the top end there are some key market segments that have very different needs and a distortion of spending power; for example Expats, though very small in volume, are a significant economic group to food retailers.  For PARKnSHOP, identifying and addressing the needs of the different customer groups has become the essence of MoneyBack.

Again, with a densely populated city like Hong Kong, it is also a challenge to strike a balance between traditional national campaigns and targeted marketing. With national marketing aiming at arousing brand awareness as well as expanding market share, and targeted marketing to build customer loyalty; the two are of equal importance in building the PARKnSHOP brand as a whole.

Other challenges were the lack of CRM experience and the need to align CRM understanding with the Product Trading team who are responsible for sourcing products for each store and relevant offers for our members.  In addition, the IT personnel had significant new technical challenges to contend with, such as how to manage various types of universal and targeted offers; and how to support the kiosks, the daily touch point of members which are installed in almost every store. Finally how to effectively & efficiently measure the results to ensure that the programme delivered against required KPI's and ultimately increased basket size and profit.

3.      What added value does the programme offer its customers - and how does it differentiate itself from competitors? 

Unlike competitors who operate discount card schemes, PARKnSHOP MoneyBack programme is a points-based loyalty card. It is aimed at engaging customers and giving them extra value via targeted communication - including relevant content, tailored promotions via multiple communication channels such as email, direct mail and SMS.

MoneyBack has been designed to be efficient and responsive, so it is difficult and costly for competitors to react.  The points based proposition is attractive - earning across the group's retail partners which include Watson's, the drugstore chain and Fortress, the electrical appliances retail chain.  MoneyBack members can earn points at a total of over 450 outlets across these 3 brands. There are also significant retail partners on the redemption side, which includes Standard Chartered Bank and Asia Miles. This gives a wide variety of redemption choices (not just cash coupon) via the touch screen kiosks in-store.

4.      What challenges do you envisage in the future? 

The key challenges resulted primarily due to the fact that the majority of the PARKnSHOP customers are not truly technology savvy; and that the promotion cycle is really short.  In addition, other obstacles were how to create more interactivity and personalize offers and communications for our customers, whilst utilizing emerging technology to enable greater engagement, incidence and speed of delivery.  Mobile marketing is a huge emerging opportunity and we are actively looking at ways to incorporate this to maximize the performance of our loyalty programme and extend our reach beyond the traditional marketing channels. In general, how to continuously delight our customers.

5.      In your opinion, what are they keys to success for the MoneyBack programme? 

Throughout the project, the commitment of our management team on the rationale behind implementing a CRM and loyalty programme has been vital. Without this commitment and investment we would not be where we are today.

The integration of CRM process and technology systems across the entire organization has resulted in PARKnSHOP becoming the first supermarket inHong Kongto invest in CRM and at an extensive level.  Building on an already well established brand and business model, we were extremely well organized in terms of recruiting and training a dedicated CRM team, plus good planning and implementation of the product choices and member communications. 

PARKnSHOP had the vision from an early stage to change the traditional way in which a supermarket brand promotes itself, stepping away from the traditional price-based discounting strategy, to more targeted and tailored approach to each individual customer. The level of customer analytics at a detailed basket level has provided significant insight which has resulted in PARKnSHOP becoming one of the leading brands inHong Kong, not just in the retail sector.