May 7, 2009, 12:00 AM

With new loyalty program, Shoplet cleans up in office supply category

A six-month-old loyalty program at online-only discount office supplies retailer boosts sales by 25% among enrolled customers, who are buying a wider variety of products, CEO Tony Ellison says.

A six-month-old loyalty program at online-only discount office supplies retailer produced 25% more sales in the first quarter of this year, collectively, among the business customers enrolled in the program, compared to sales from the same customers in the year-ago quarter, before the program was launched, the retailer says. Tony Ellison, CEO, says enrolled customers also are buying a wider variety of items than previously.

“There is a lot of cherry-picking in purchasing office supplies,” says Ellison, who notes that the loyalty program gives customers a reason to buy more of the supplies they need from Shoplet.

The program was initially rolled out to customers who fit criteria Shoplet developed to profile what it considered its top customers-generally, businesses who buy regularly at a certain volume. The segment represents less than 5% of Shoplet’s customer base. The program, operated for Shoplet by third-party vendor Rewards Now, offers enrolled customers the opportunity to accrue rewards points for dollars spent, with points redeemable against a variety of rewards ranging from airline miles to consumer electronics.

The recession has hit leading office supply retailers hard, with Office Depot, for example, in April reporting a first-quarter loss of $54.7 million, compared to a profit of $68.8 million a year ago. But Ellison says customers’ greater price and value-consciousness is increasing their willingness to look beyond their customary suppliers and has led to an increase in business for Shoplet, whose prices are about 15% to 30% below those of category leaders. Ellison says privately held Shoplet’s sales in April were up 70% over the previous April.

Shoplet is looking at expanding the loyalty program to additional customer segments, Ellison adds.

Shoplet expects to do $100 million or more in sales this year, a spokeswoman says.

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