Green Hills Farms Syracuse (NY) USA
Green Hills Farms is a renowned test store in the US. It has been a frontrunner in applying biometric technology for customer identification and loyalty programmes. Therefore, Green Hill Farms is among the first stores to deliver fully personalised offerings to individual customers. But despite the technology in the store, the main driver of loyalty remains the quality of fresh foods on Green Hills Farms’ shelves.
Elsevier Food International, Vol. 10, Number 2, May 2007
Elsevier Food International, Vol. 10, Number 2, May 2007
Jim Cordts
Despite promoting itself on the store’s front as ”The best little grocery store in America”, Green Hills Farms in Syracuse, N.Y., looks from the outside like any other small town American grocery store. However, looks can be very deceiving as this store is well-known for being a testing ground for new technology.
The store’s roots date back to over 70 years ago, when the Hawkins family had a vegetable stand on the side of Route 80 leading into Syracuse. Today it has grown into a full-service supermarket of 3,000 square metres. Still operated by the same family it is a well-known landmark in the city.
Green Hills Farms is a fresh foods grocer, selling fresh produce sourced locally, such as Byrne Dairy and Cavallaro Specialty Foods, both Syracuse-based suppliers. It also sells its own label gourmet foods, and it operates its own bakery and butcher shop. Green Hills Farms can boast an extremely loyal customer base despite tough competition from large operators like Wegmans, Price Chopper and big box retailers like Wal-Mart. Some customers are willing to drive 40 kilometres to buy freshly made donuts and pastries at Green Hills.
Even though the store is small, it is already a legend in the grocery industry by being the first store to pioneer its own card-based customer loyalty programme. The programme, Green Hills Card Program, was launched and developed by entrepreneur Gary Hawkins in 1993. That was years before other larger chains started promoting their own customer loyalty programmes. Currently Gary dedicates most of his time to running his consultancy Hawkins Strategic LLC, while his wife Heather manages the store.
Fingerprint
Sure, Green Hills Farms earns customer loyalty by its fresh foods assortment and shopping experience. But since the early 1990s, the retailer also decided to reward its most loyal customers, which are the 30 per cent of customers who spend the most. It earned Hawkins a lot of publicity, for instance when it awarded free turkeys for its top ’diamond’ class of customers, just before Christmas. This customer loyalty strategy has worked well over the years, and figures from the Food Marketing Institute (FMI) confirm this. According to the FMI, sales at Green Hills Farms are approximately US$18 per square foot, while on average the level of sales per square foot in the US grocery industry is US$10. Furthermore, over 90 per cent of all transactions in the store are done by customers holding a loyalty card.
Despite promoting itself on the store’s front as ”The best little grocery store in America”, Green Hills Farms in Syracuse, N.Y., looks from the outside like any other small town American grocery store. However, looks can be very deceiving as this store is well-known for being a testing ground for new technology.
The store’s roots date back to over 70 years ago, when the Hawkins family had a vegetable stand on the side of Route 80 leading into Syracuse. Today it has grown into a full-service supermarket of 3,000 square metres. Still operated by the same family it is a well-known landmark in the city. Green Hills Farms is a fresh foods grocer, selling fresh produce sourced locally, such as Byrne Dairy and Cavallaro Specialty Foods, both Syracuse-based suppliers. It also sells its own label gourmet foods, and it operates its own bakery and butcher shop. Green Hills Farms can boast an extremely loyal customer base despite tough competition from large operators like Wegmans, Price Chopper and big box retailers like Wal-Mart. Some customers are willing to drive 40 kilometres to buy freshly made donuts and pastries at Green Hills.
Even though the store is small, it is already a legend in the grocery industry by being the first store to pioneer its own card-based customer loyalty programme. The programme, Green Hills Card Program, was launched and developed by entrepreneur Gary Hawkins in 1993. That was years before other larger chains started promoting their own customer loyalty programmes. Currently Gary dedicates most of his time to running his consultancy Hawkins Strategic LLC, while his wife Heather manages the store.
Fingerprint
Sure, Green Hills Farms earns customer loyalty by its fresh foods assortment and shopping experience. But since the early 1990s, the retailer also decided to reward its most loyal customers, which are the 30 per cent of customers who spend the most. It earned Hawkins a lot of publicity, for instance when it awarded free turkeys for its top ’diamond’ class of customers, just before Christmas. This customer loyalty strategy has worked well over the years, and figures from the Food Marketing Institute (FMI) confirm this. According to the FMI, sales at Green Hills Farms are approximately US$18 per square foot, while on average the level of sales per square foot in the US grocery industry is US$10. Furthermore, over 90 per cent of all transactions in the store are done by customers holding a loyalty card.
This, however, is set to change. In May 2006, Green Hills Farms launched a pilot programme of a state-of-the-art loyalty scheme, named SmartShop. Tested at Green Hills Farms, these are biometrically-accessed kiosks that identify shoppers via their fingerprints and subsequently offer relevant savings and promotions based on the shopper’s purchasing behaviour. SmartShop is owned by the company Pay by Touch, which is the US’ leading biometric authentication network for loyalty and payments. Pay by Touch is involved in the pilot which is an outcome of Gary Hawkins operating as a consultant to Pay by Touch.
The aim of the pilot is to replace customer cards with the customers’ fingerprints. ”We ask all our Green Hill Card members to switch over to SmartShop,” says Heather Hawkins. ”The response has been very good and more than 50 per cent of all store transactions are now going through Smart Shop. This year we expect to fully replace the Green Hill Card-system by this new biometric system.
Personalised coupons
Smart Shop is a system where customers can both gather loyalty points and pay by using their fingerprints with the technology that has been developed by Pay by Touch. The system allows customers to access customised coupons, rewards and promotions built on data from earlier shopping visits in the store.
Over 3,000 stores in the US are using Pay by Touch as a payment system today and more than three million customers have registered their fingerprints in the system. Green Hills is the first store to take the biometric payment system into its customer loyalty programme.
There are several kiosks in the store where customers can register their fingerprints which are stored in a secured database. Via this registration, customers can create an electronic wallet connected to a personalised debit- or credit card. Customers who do not want to use their fingerprints for payment use, can choose to only use the system to receive discounts and rewards. Other shoppers can pay by simply scanning their fingerprint at the cashier. This biometric system also allows them to use their fingerprints as a method of payment in all 3,000 stores in the US that use the Pay by Touch system.
When a customer registers, he or she also receives a personalised web page at Green Hills Farms website, where they can write shopping lists that can be retrieved at the in-store kiosks when they visit the store.
”When a customer who uses Smart Shop comes to the store they go to a kiosk and scan their fingerprint to get some 15 to 20 personalised coupons printed out on a paper,” says Heather Hawkins. ”These coupons are based on data of prior shopping done by the customer. This means that we can offer the customer discounts on goods that they have bought before. The data can also alert us on reduced spending. If a customer who normally shops for 50 dollars a week suddenly has dropped to 40 dollars, we can try to stimulate their spending with the help of electronic coupons.”
Every year, hundreds of millions of traditional grocery store coupons are distributed in the US. According to industry reports only one per cent of these coupons are redeemed in the stores. The pilot test with SmartShop and its personalised coupons have so far shown a redemption rate of 20 per cent at Green Hills Farms.
”Smart Shop creates more accurate databases,” says Heather Hawkins. ”Cards can often be used by someone else in the family and thus create data which is not 100 per cent correct for the cardholder. By using your fingerprint we can avoid that problem. We try and target out most loyal customers to increase sales. That’s one way we can survive the competition from Wal-Mart and Wegmans.”
The encouraging results at Green Hills Farms did lead to Pay by Touch deciding to leave the pilot stage and roll out the loyalty system nationwide. Negotiations with other supermarket chains have now started.
The aim of the pilot is to replace customer cards with the customers’ fingerprints. ”We ask all our Green Hill Card members to switch over to SmartShop,” says Heather Hawkins. ”The response has been very good and more than 50 per cent of all store transactions are now going through Smart Shop. This year we expect to fully replace the Green Hill Card-system by this new biometric system.
Personalised coupons
Smart Shop is a system where customers can both gather loyalty points and pay by using their fingerprints with the technology that has been developed by Pay by Touch. The system allows customers to access customised coupons, rewards and promotions built on data from earlier shopping visits in the store.
Over 3,000 stores in the US are using Pay by Touch as a payment system today and more than three million customers have registered their fingerprints in the system. Green Hills is the first store to take the biometric payment system into its customer loyalty programme. There are several kiosks in the store where customers can register their fingerprints which are stored in a secured database. Via this registration, customers can create an electronic wallet connected to a personalised debit- or credit card. Customers who do not want to use their fingerprints for payment use, can choose to only use the system to receive discounts and rewards. Other shoppers can pay by simply scanning their fingerprint at the cashier. This biometric system also allows them to use their fingerprints as a method of payment in all 3,000 stores in the US that use the Pay by Touch system.
When a customer registers, he or she also receives a personalised web page at Green Hills Farms website, where they can write shopping lists that can be retrieved at the in-store kiosks when they visit the store.
”When a customer who uses Smart Shop comes to the store they go to a kiosk and scan their fingerprint to get some 15 to 20 personalised coupons printed out on a paper,” says Heather Hawkins. ”These coupons are based on data of prior shopping done by the customer. This means that we can offer the customer discounts on goods that they have bought before. The data can also alert us on reduced spending. If a customer who normally shops for 50 dollars a week suddenly has dropped to 40 dollars, we can try to stimulate their spending with the help of electronic coupons.”
Every year, hundreds of millions of traditional grocery store coupons are distributed in the US. According to industry reports only one per cent of these coupons are redeemed in the stores. The pilot test with SmartShop and its personalised coupons have so far shown a redemption rate of 20 per cent at Green Hills Farms.
”Smart Shop creates more accurate databases,” says Heather Hawkins. ”Cards can often be used by someone else in the family and thus create data which is not 100 per cent correct for the cardholder. By using your fingerprint we can avoid that problem. We try and target out most loyal customers to increase sales. That’s one way we can survive the competition from Wal-Mart and Wegmans.”
The encouraging results at Green Hills Farms did lead to Pay by Touch deciding to leave the pilot stage and roll out the loyalty system nationwide. Negotiations with other supermarket chains have now started.
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