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Loyalty Blooms at Smith & Hawken
Chain Store Age,
August 14, 2008
by Dan Scheraga
Smaller retailers frequently find it a challenge to implement the same kind of CRM solutions big-box retailers have, simply because they lack the investment dollars and infrastructure necessary to deploy it. Smith & Hawken, a 60-store, Novato, Calif.-based retailer of outdoor furniture, skirted around those obstacles by choosing an affordable, manageable solution to drive its loyalty program.
Smith & Hawken uses an offering from San Francisco-based Loyalty Lab Inc. to support its Garden Party loyalty program. The program permits Smith & Hawken customers to receive $10 in rewards for every $200 they spend.
Smith & Hawken faced an especially daunting challenge in rolling out its loyalty program in that its back-end IT infrastructure is very rudimentary. Lacking even a central database for CRM data, the retailer had no data store from which to draw for its loyalty program. Additionally, the retailer's POS is supported by a quiet server, which receives data from the POS but does not send it back. Smith & Hawken had no means of getting CRM data to the POS.
The retailer did have one factor in its favor: Its POS already had name-capture functionality. "All we had to do was add a field for capturing the membership-card number, and we had the start of our loyalty program," said Gary Bauman, who manages the Garden Party campaign for Smith & Hawken.
Last year, Smith & Hawken recruited Loyalty Lab to help with the program. The retailer was attracted by the hosted nature of the solution. "Loyalty Lab does all the back-end processing for us. That really helped us deploy the solution quickly, and minimized our burden," Bauman said.
Transaction and CRM information is forwarded from Smith & Hawken to Loyalty Lab, which keeps track of Garden Party members' spending. The vendor regularly sends Smith & Hawken electronic reports detailing which members earned rewards and how much they've earned. The retailer uses that data to print mag-stripe reward cards, which are sent to members through a contracted mailing house. Loyalty Lab also provides Garden Party members with a Web interface for checking up on their membership and reward status.
The vendor's help has enabled Smith & Hawken to establish its loyalty program with minimal effort, Bauman said. The Garden Party program has attracted more than 450,000 members. Smith & Hawken is considering growing the program further by introducing tiered reward levels and expanding "soft benefits," such as a newsletter the retailer sends out to loyalty-program members. The retailer also may expand its use of the Loyalty Lab solution to support the sales of its thriving e-retail and catalog channels.