Port Orchard, WA. Reversing the ‘Wal-Mart Effect’
Much has been written over the past twenty years about the "Wal-Mart Effect" -- the devastating retail impact of big box stores on smaller merchants.
Wal-Mart has been compared to a retail plague: it makes all merchants sick, and kills off the weak. In some trade areas, as much as 80% or more of Wal-Mart sales are 'captured' from existing merchants.
There are consultants who travel the nation telling small merchants they can "survive and thrive" in the shadow of a Wal-Mart. But the advice they give -- emphasize service, carry unique products, expand your business hours -- have little impact on survivability. Even large regional chains stores have died off in many parts of the country.
But one small business venture based in Port Orchard, Washington has a different take on how to reverse the Wal-Mart effect. It's called a "loyalty co-op."
Kim Vogler, founder of Family Bundles, says her program rewards consumers for shopping at locally owned businesses. The consumer with a Family Bundles card, earns credits at participating merchants in the Family Bundles network. These credits are used like cash when shopping at any store in the network. The "credits" card is free.
"It became my passion to create a program that would allow these small businesses, 'at risk', to compete with the Super Stores without 'price cutting' and 'discount coupons,' Vogler explains. "After 6 years of development and hundreds of thousands of dollars in software development and test marketing, our Team has perfected the first co-op Loyalty Program that gives businesses the 'tools' to compete in the marketplace. Participating businesses do this by awarding their loyal customers with 'credits' that can be spent like cash, at any participating merchant in our network."
When a Family Bundles shopper makes a purchase, credits are loaded back on their card as a percentage of the sale price (usually 2%) and are redeemed just like an electronic gift card. Vogler says this system allows merchants to compete with corporate super stores without having to give deep discounts. By rewarding consumers with credits and managing consumer demographic data for marketing purposes, Family Bundles helps its merchant partners "build and maintain a loyal audience at a very reasonable cost."
When a shopper presents their Family Bundles 'Credits' card at any participating merchant, they earn credits on every purchase that can be redeemed at any store in the network. You can shop at gift stores, nail salons, furniture stores, have the car repaired, dine out, go to the chiropractor, get a massage, do home repair, or spend the night at a Hotel or Bed & Breakfast. As long as the business you're at is a Family Bundles sponsor, you'll earn credits.
The ratio of credits earned to dollars spent varies based on the type of business you are presenting your card at. For the most common transactions, however, you will earn 2% credit back on your card for every dollar spent. For example, if you have dinner out at a participating restaurant in the Family Bundles network and spend $100, a $2 credit will be applied to your account.
"We take the loyalty program concept to a whole new level," Vogel explains, "through our innovative Group Profit Sharing plan that pays participating businesses residual income whenever their own customers shop elsewhere in the Family Bundles network."
"If we secure 30,000 consumers (cardholders) in the three areas up North (Sequim, Port Angeles, & Port Townsend) and each cardholder spends a minimum of $300 per month at any combination of businesses in our Co-op, the total retail sales dedicated to our local businesses is $9,000,000 per month," Vogler told Sprawl-Busters. "When we take that away from Wal-mart, how does that effect them? That is just the tip of the iceberg. We can do better than that as our volume allows us, and we will give even more back to the consumers! The more we give, the more powerful our program is. Wal-Mart can't compete with that. And even though we gain ground just one community at a time, we are still winning!"
What you can do: If Family Bundles reaches the $9 million per month level, it will be performing at roughly the same level as a Wal-Mart superstore.
According to an article this month in the Kitsap Peninsula Business Journal, Family Bundles is preparing to "re-launch" itself in Kitsap County, Washington, where Vogler originally began test marketing her program a decade ago. During the first phase of the primary launch in Clallam and Jefferson Counties, the Business Journal reports, Family Bundles had over $660,940 passing through the Family Bundles loyalty co-op -- with a membership of just 19 active businesses, and a cardholder base of just under 1,000 consumers.
Vogler now plans to increase the Members to 150 active businesses, in multiple categories, and an active cardholder audience of 30,000. This may seem like a reach, but so did the plans of Sam Walton when he opened his first Wal-Mart in 1962 in Rogers, Arkansas.
For more information about the Family Bundles Loyalty Co-op, go to www.familybundles.com, or call Kim Vogler at 1-888-209-0077.