Boots said it is to use smartcard technology for its #50 million loyalty card project, launching next month.
The Advantage Card has already undergone two-year trials in East Anglia and the south west and is to be launched nationally on 1 September.
It includes a microchip for storing and processing of data, unlike a magnetic stripe card which contains only fixed identity information. Shell is already using a smartcard for its loyalty programme, which it plans to extend to joint schemes with other retailers. This could enable it to add additional services in the future, with storage of medical details one possibility.
In total Boots is investing more than #50 million in the project over three years, including #12 million on IT capital and database investment and #8 million on the cards themselves, supplied by GPT and Gemplus.
The chemist chain is planning to develop a massive customer database from information collected when people sign up for the card and will study the shopping data to detect patterns. Boots expects at least 0.7Tbytes of data to be collected within the first year.
"Information technology in support of the Advantage Card will give us a real competitive advantage. It will provide us with invaluable information about our customers," said Ron Furriness, director of information systems.
Boots has outsourced the database operations to AT&T, which will run an Informix database on an NCR platform. A team of 30 dedicated marketing staff will analyse the shopping data using an IBM DB2 database on an RS/6000 server.
"The smartcard linked to the database will provide the kind of targeted analysis that could never have been done any other way," said a spokesperson.
Last month, Boots announced it was ditching its BT leased line wide area network in favour of a massive frame relay network from Energis, connecting all 1,260 Boots stores and costing #27 million over five years.
The upgraded network will enable Boots to handle all the additional traffic from the Advantage Card. Boots is already using video and interactive computer-based training applications over the network to train staff on the new loyalty card.
A total of 13,000 card reader/writer devices will be installed at the 1,260 Boots stores in the UK.
By storing data on the card the store says it will be able to process customers' points and free product requests more quickly than using magnetic strip cards.
Using smartcards also gives Boots the option to add additional services, or link with other retailers' reward schemes. In the long term, the retailer said storing medical details could be a possibility, but there were no specific plans to add to the card functionality just yet.
"There are a million and one things one can do on a smartcard and there is spare room on the chip. But for now we are concentrating on getting the Advantage card right and maximising the value of the information," said a spokesperson.
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