Big network roll out for rewards programme

News Release kachingoit - 1

October 9, 2001

Big network roll out for innovative rewards programme

It’s believed to be one of the biggest-ever IT point-of-sale roll-outs in New Zealand.

More than 1,500 computer terminals and printers have been installed at 406 different locations from Whangarei to Invercargill during recent months.

The big roll-out is for the re-launch of Kachingo!, a customer rewards programme invented in New Zealand that pays cash and instant product prizes to Kiwis just for doing their shopping.

Kachingo! has been operating successfully at 103 Super Liquor stores throughout the country since December last year.

Now, 272 BP service stations, 31 KFC outlets north of the Bombay Hills and 100 Woolworths New Zealand supermarkets have joined the programme.

That brings the total number of outlets to more than 500, about the same size as the IATA travel agency network in New Zealand.

It also takes the total number of in-store terminals and printers to more than 1,700.

“We’re not giving too much away but I can say we have had to install and test one of the biggest private computer networks since travel agents went on-line,” says Kachingo! project manager Gary Cooper

Kachingo! is a technology-driven product. Shoppers spending a qualifying amount or buying a particular product on Kachingo! promotion are delivered a rewards game lines ticket with their till receipts.

The ticket has a line of six numbers plus a “Power’ number printed on it. Some tickets may provide shoppers with instant prizes, a great way for brands to sample their products.

There are daily, weekly and monthly draws with prizes ranging in size from $20 through to a possible $1 million. Mr Cooper says there will be a million dollar winning Kachingo! ticket before Christmas this year.

Kachingo! works like this. In-store PCs scan each shopper’s transaction, looking for specific products, specified levels of spending and a wide range of consumer behaviour. The rewards are allocated by the central Kachingo! computer.

“There are a lot of transactions - we’re predicting three million every week. We’re also reading the entire transaction - every loaf of bread, every bottle of Coke, every litre of petrol - so you can see there’s a huge amount of data we’re handling,” Mr Cooper says.

While Woolworths’ Big Fresh, Price Chopper and Woolworths supermarkets, BP and Super Liquor are connected over the Telecom network, Walker Wireless has been used to access the KFC stores.

Kachingo! provides some major points of difference from its competitors, Mr Cooper says.

“We’ve set ourselves up for two-way on-line communication so our objective is to have a real-time network - we’re certainly real-time rewards.”

Mr Cooper says that’s the key from a consumer’s point of view.

“We’ve done the research and it tells us many Kiwi shoppers prefer cash rewards and they want the rewards now - they’d rather not have another card, statements and memberships.

“It’s also a great way for suppliers to sample their products so Kachingo! is also a fabulous sales promotion tool.”

Kachingo! has been very active with its patent protection securing core protection around both the consumer offers and how they’re delivered.

Mr Cooper maintains it’s the knowledge wave in practice. He says the business has employed more than 40 “knowledge’ workers in the past 18 months.

“Kachingo! is a global opportunity. It has been developed here and all future development work will be done in New Zealand. We’ve already established offices in Sydney and in San Francisco.

“We have seen nothing to indicate that the capability we have is better anywhere else in the world. We have sat down with some of the major players in the States and they say they’re very impressed.”

Most of the software development has been undertaken by Kachingo! associate company GOTech in Wellington.

Rigorous testing and nine months experience with Super Liquor has seen Kachingo!’s Linux platform host computer perform very well, Mr Cooper says.

“With the addition of 400 new outlets we have had to test quite vigorously,” he says. “For example, the data we’ve been carrying from 10 BP test sites is about the same volume we have been getting from 103 Super Liquor outlets.

“So the jump in scale is significant. The processing capability of the host computer has been a key issue and we’ve had to plan for growth because we need to know that, as sales increase through our network, can we handle it.

“The exponential growth illustrated by going from Super Liquor to BP is indicative also of what we’ll get when other New Zealand retailers come aboard or when we go to the other markets such as the US and Australia.

“We’ve got to have a solution that we can just bolt on; you don’t want to pay for capacity until you need it.”

About Kachingo!

Kachingo! is a customer rewards programme invented in New Zealand. It rewards shoppers with Big Cash prizes and instant rewards just for shopping at any store within the Kachingo! village of partners. The village consists of BP, KFC (north of the Bombay Hills), Super Liquor and Woolworths, Big Fresh and Price Chopper supermarkets.

ends

Issued for Global Online Promotions by Pead PR

Contacts:
Mary Vance -------------Deborah Pead
Managing Director -----Director
Global Online Promotions ---Pead PR
Tel: 0-9-309 4055------ 0-9-981 5556

News release trade - 1

October 9, 2001

Kachingo! go the tills as big retailers

sign up for unique sales promotion tool

The locally-developed, technology-based customer reward scheme Kachingo! has gained a huge boost with the signing of three of New Zealand’s biggest international names in retail.

And a substantial number of their suppliers stand to benefit in a big way too.

The three - BP, KFC and Woolworths - join national liquor chain Super Liquor in the Kachingo! Village. They’re all banking on Kachingo! to boost sales and increase their market share in New Zealand.

The move adds more than 400 new outlets to the Kachingo! stable.

It’s a good investment if the experience of Super Liquor, Kachingo’s founding retail partner, is anything to go by.

Kachingo! is the customer rewards programme launched late last year that rewards shoppers simply for shopping at a Kachingo! retail partner.

Super Liquor has used the programme to help halt an erosion in sales caused by increased competition - especially from supermarkets which began selling beer late last year.

The programme has been so well received by Super Liquor customers, the nation-wide chain has lifted trade by up to seven per cent ahead of the corresponding months in 2000.

Kachingo! not only rewards customers; it also provides retailers and manufacturers with real-time sales analysis to help them gauge the success of their promotions.

Kachingo! was developed in New Zealand by New Zealanders and around $10 million has been invested in the programme during the past four years.

The software-based technology enables store operators to provide shoppers with the chance to win cash prizes through daily, weekly, and monthly draws of $1,000 through to $250,000. Consumers can also be rewarded with instant prizes at the till.

“Our new retail partners and suppliers work in highly competitive categories and have each carefully looked at all aspects of our programme. That’s a big vote of confidence in a New Zealand-developed product,” says Kachingo!’s Mary Vance.

And if you doubt the value of the invention consider this: in the US last year, retailers spent an estimated US$175 billion on loyalty and reward programmes.

Kachingo! works like this. To get one line of Kachingo! all you have to do is spend a specified amount - the more you spend, the more game lines you receive - or buy goods that are on Kachingo! promotion.

The current qualifying amounts for one game line of Kachingo! are:

- $10 at KFC

- $25 at Super Liquor and BP, and

- $30 at Woolworths, Big Fresh and Price Chopper supermarkets. ($10 for Woolworths stores located at Gull)

Shoppers check their numbers with those drawn daily, weekly or monthly. Monthly draw results are televised on the first Sunday of every month. Numbers can also be checked in-store, on an 0900 number or Teletext, in major newspapers and by visiting GO’s web site at www.kachingo.co.nz/

Ms Vance says Kachingo! is a great sales promotion tool.

“For suppliers it’s a fantastic way of sampling a new product. Brands pay only for performance and it gives them valuable point-in-time information on the performance of their products.

“It also enables brands to leverage on the chance of their customers winning the big prize - there is great PR if the winning game line is for the purchase of one of their products.

“Suppliers can use the technology to target their products at a specific consumer profile. The opportunities are endless,” Ms Vance says

Super Liquor general manager John Sutherland says the beauty of the system is its simplicity and the fact that it requires little effort to manage.

“Customers are drawn to Kachingo! products so they sell themselves!

“While Kachingo! itself is an amazingly simple, cost effective and creative promotional activity, the business information that can be gleaned through the technology side appears to be limitless.

“This should give us previously unknown industry information that we - and our suppliers - will love and that will help keep us ahead of our competitors,” Mr Sutherland says.

Ms Vance maintains Kachingo! captures what New Zealand is trying to achieve with the “knowledge wave’.

“We’re up and surfing now and riding a very big wave. What’s happening here is going to be closely watched internationally by the parent companies of our new three retail partners - and a lot of other retail giants, I’m sure.”

Ms Vance says Kachingo! has major benefits for retailers, providing tactical, advertising and sampling opportunities in addition to sales analysis.

Retailers are linked to Kachingo! through their own point of sale systems and the programme’s patented software technology.

Because the technology captures every transaction as it occurs at every outlet, Kachingo! can provide its retail partners with a wide range of reports to help them better manage their promotions. Ms Vance says retail partners are able to gain a better understanding of shoppers’ buying habits.

“We work closely with our retail partners to provide them with timely and relevant information that enables them to make informed sales and marketing decisions.”

Kachingo! says it is looking to expand its number of partners. The term Kachingo! was developed to resemble the sound of a cash register mixed with the word jingo.

The business is owned by a group of New Zealand investors including listed public company Strathmore Group, Morrison & Co, Eric Watson’s Cullen Investments and Global Online Promotions management.

About Kachingo!

Kachingo! is a customer rewards programme invented in New Zealand. It is the only one to reward shoppers with Big Cash prizes and instant rewards just for shopping at any store within the Kachingo! village of partners. The village consists of BP, KFC (north of the Bombay Hills), Super Liquor and Woolworths, Big Fresh and Price Chopper supermarkets.

ends

Issued for Global Online Promotions Ltd by Pead PR

Contacts:
Mary Vance ------------- Deborah Pead
Managing Director ----- Director
Global Online Promotions --- Pead PR
Tel: 0-9-309 4055 ------ 0-9-981 5556

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