Officials at Safeway and Fresh Fields said customers have rushed to enroll in the programs, sharing their names, addresses, birth dates, telephone numbers and other data in exchange for discounts. They invariably say, 'I love it. The reality of loyalty programs is far more complex than simple trade-offs at cash registers. At grocery stores, which are just beginning to get a handle on the data they amass, information about individual customers is constantly analyzed in extremely sophisticated ways. After the information is gathered at checkout counters, it typically is stored in swift computer systems known as data warehouses.
Specialists then plumb the data to identify customers with certain buying habits.
The digital records also allow grocers and others to mail out product pitches on behalf of manufacturers, targeted to people who are most likely to be interested in the product. Marketing officials defend these practices and say companies worry about doing anything that might upset customers. The Direct Marketing Association, which has 4,100 members in the United States, also will begin requiring members next year to tell customers how they share data with other marketers, give them a choice to opt out of such sharing and honor requests not to send them junk mail. Safeway already allows customers to opt out of mail pitches. But critics say marketers rarely fully explain such matters, and they complain that even when companies offer consumers a chance to sidestep data collection, they do so in fine print.