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In today’s oversaturated media market, the cheery greeting “You’ve got mail!” is likely to be accompanied by a message about how to get out of debt, refinance a mortgage, or worse. The fusillade of messages via e-mail, TV, print, and other forms of media certainly creates a challenge for retailers who want to communicate more closely with customers.
But grocers may actually be at an advantage when it comes to marketing in the 21st century, several marketing observers tell Progressive Grocer. For one thing, supermarket operators are already entrenched in customer relationship management (CRM), which has placed them in the minds of their shoppers -- a handy place to be for marketing purposes. Additionally, many companies are a step or two ahead in brand positioning, since that's now a competitive necessity in the retailing environment.
"Grocers are doing marketing better than other retail channels, because [marketing] is becoming more and more about CRM -- and the grocers have been doing that better than anyone," says Mike Gatti, e.v.p. of the Washington-based Retail Advertising and Marketing Association (RAMA), a division of the National Retail Federation. RAMA recently held its annual Retail Advertising Conference, in which supercenter operator Meijer won several prestigious advertising awards.
Media providers are taking note of supermarket operators' marketing savvy, too. "At our firm it's all about content," observes Barry Berman, president of CRN International, Inc., a radio promotion firm based in Hamden, Conn. "Today when we're doing radio vignettes for our manufacturer clients, which often involve cooperative branding with retailers, we'll also look into podcasting, RSFs, streaming audio, and specialized Web sites. I'm impressed that the grocery community is really understanding this -- they're ahead of the game."
While it might be a bit premature for the average grocer to incorporate some of these media into its marketing strategies, plenty of retailers are experimenting with new ways to connect more intimately with their shoppers in store, at home, and elsewhere. In one of the most cutting-edge examples, Chicago-based independent Potash Bros. Markets has signed on with MobileLime to offer a cell phone-enabled loyalty program that will include text messaging.
More common applications include in-store kiosks that are linked with loyalty card programs, to recognize shoppers and display deals of the day, such as those used by Giant Food and Albertsons, and digital displays designed to provide shoppers with useful information, which Pathmark, among others, is employing. Regional chain Meijer, meanwhile, is reaching its customers at home with voice marketing that alerts them when a sale is coming up.
The variety of new marketing vehicles currently available can be mind-boggling. To keep strategies on track, retailers must be focused on the specific consumer target for their messages, and make all other decisions in light of that focus.
"I advise our clients not to be confused by all the media options out there," says CRN's Berman. "Only think about what works with the demographics you're trying to reach. I don't think technology should be used for technology's sake. It should only be used if it helps advance product sales or store traffic."
Beyond driving sales, however, marketing itself must save shoppers time, money, and hassle, observers agree. In a distinct difference from the days of suggestive selling, in the future the marketing that's customer-oriented will have the greatest chance of breaking through the clutter, they say.
David Diamond, a marketing consultant and former chief innovation officer for St. Petersburg, Fla.-based Catalina Marketing, envisions that today's less obtrusive, permission-based marketing could eventually lead to a melding of marketing and customer service. If that's the case, food retailers will be in an ideal position for success, since customer service is what they ideally already do best.
It's hard to deny that in today's retail-marketing landscape, the sexiest new campaigns are those incorporating technology. One of the latest concepts, being tested by Potash Bros. Markets, takes a new twist on loyalty marketing by turning mobile phones into marketing, loyalty, and payment devices.
Potash Bros. is using a solution from Boston-based MobileLime that allows consumers to get rewards and pay for purchases by waving their cell phones over a contactless reader.
"We were looking for a cardless program, so our shoppers wouldn't have to add another card to their wallet or key ring," explains Art Potash, owner and v.p. of Potash Bros. "Plus it fits the lifestyle of our market. Our clientele have an active lifestyle and are on the go, and they're all carrying cell phones. So if we're having a wine tasting on Friday from 4 p.m. to 7 p.m., we can send them an e-mail or text message at 2 to let them know."
In addition to highly targeted, event-specific messages such as Potash's wine-tasting scenario, other messages can be sent automatically by the system when customers make purchases or respond to coupons.
Other technology-based tools, such as in-store kiosks, are finally gaining momentum as a more mainstream option for loyalty marketing in the store. Giant Food's new tech-heavy Giant Super Food Store in Camp Hill, Pa., for instance, includes kiosks that let shoppers access special BonusCard coupons and recipes, or update their BonusCard information. Using the system's capabilities, shoppers can receive personalized offers and coupons based on their shopping histories, and reference information from their loyalty cards.
In a similar initiative, Albertsons has rolled out "avenu" dispensers in its stores, which let preferred card holders see which 12 customized offers are waiting for them when they enter the store. The in-store tool is part of Albertsons' new proprietary marketing program, also called avenu. Cardholders can also access a list of customized specials in an avenu section on Albertsons' Web site.
"Avenu has generated very positive feedback from our customers," noted Larry Johnston, Albertsons' president and c.e.o., during the retailer's fourth-quarter conference call on March 7. "The products featured in the avenu program have demonstrated significant sales increases. In addition, we are partnering with a significant number of vendors, and they have been very pleased with this tool."
More retailers may follow suit with such in-store marketing applications, observes Bill Bishop, president of Barrington, Ill.-based Bishop Consulting. "I think you'll see advances in kiosks. These are potentially very powerful."
A lot of innovation appears to be surfacing beyond the tier of the biggest chains. Some smaller independent retailers and their wholesalers are proving most successful at harnessing the power of kiosks and other in-store loyalty marketing-related applications.
Associated Wholesalers, Inc. of Robesonia, Pa. is testing a front end kiosk that gives its frequent shoppers special offers, while also notifying a store manager that the frequent shopper is in the store, so that the manager can extend a personal greeting.
In a slightly different case, Clemens Markets, a 20-store operator based in Kulpsville, Pa., uses PDAs to alert store managers when the member of a customer loyalty program is in the store.
"Whoever the customer service manager is, or the manager on duty, they get an alert," explains Roy Powell, Clemens' director of information systems.
Store associates typically don't know the loyal customer is in the store until after the customer swipes his or her loyalty card at the end of an order. Notes Powell, "It takes about 90 seconds until we'll get it on a PDA."
Another tech device that retailers are using for more broad-based in-store marketing is a digital signage system. Pathmark, Albertsons, and Price Chopper Supermarkets are among the retailers that feature customized in-store digital advertising signage supplied by SignStorey, Inc., a company based in Fairfield, Conn.
"Supermarkets are facing a lot of competition, and they're looking for ways to get messages to their consumers," notes Randy Branch, v.p. of retail marketing at SignStorey. "They view digital signage as one way to talk one-on-one with consumers and to get their marketing messages across."
The signs are placed strategically in high-traffic areas of the store -- typically perishables departments -- and offer what Branch sees as "relevant content" that makes for an enjoyable shopping experience. Content can range from the local weather forecast to a cooking demonstration, he notes.
The company recently inked a deal with television network CBS to provide original content in more than 1,300 supermarkets nationwide. SignStorey has also partnered with media outlets such as Meredith Corp.'s Baby magazine and Better Homes & Gardens, as well as Web sites Cooking.com and Epicurious.com. There's even a "produce man," Michael Mart, who shows shoppers how to cut a particular fruit or vegetable.
SignStorey can customize content for groups of stores in a specific region, too, so community organizations can share their messages with shoppers, says Branch. "We can put out messages about retail-sponsored community events or promote seasonal cherries, for example."
New product promotion is another effective use for digital displays. The key is that the information conveyed be of value to shoppers. "Customers always like to find out about new products," says Branch. "We've also found in focus groups that shoppers really like to know about specials in the store. When we include that, it's like a reinforcement of the retailer's sales circular."
Content about new products also lets suppliers in on the marketing action -- which can help retailers defray costs. Observers agree that the costs for technology-based marketing systems continue to concern retailers as they set their overall marketing strategies. Cooperative efforts, which make the most of trade dollars while advancing the retailer's brand, will be increasingly appealing and prevalent.
This isn't new. At CRN International, cooperative marketing is what makes suppliers' radio campaigns so effective, according to Berman. Many of his clients use "integrated 60s," or 60-second advertisements in which a supplier's brand is promoted in half the commercial, and a retailer's brand is promoted in the other half.
Beyond pure-play advertisements, however, the bulk of CRN's business now comes from product spots and contests promoted by deejays. "The opportunities that exist outside the commercial can make more of an impact than the commercial itself," explains Berman. These opportunities might include getting deejays to sample a new grocery product on the air, or having the radio station sponsor a contest that's thematic to a new brand.
In some cases the promotions are virtually free ads for retailers. "We came up with a contest where we ask people a question about something on the coupon pages in the Sunday newspaper," notes Berman. "For the last year or two we've been giving gift cards from one of the grocery accounts as a prize. The grocer loves it, because they get the frequency of visits."
In another example a radio segment featuring time-saving tips could be sponsored by a retailer and a supplier. "If you're doing a series on time saving, and it's brought to you by Albertsons and Lipton's Side Dishes, Albertsons gets associated with saving time," says Berman. "Our clients are working with retailers on a more integrated campaign approach, so that the message can be tied in to their key communication points with their own shoppers."
At least one retailer is branching out with a medium that the grocery industry hasn't been traditionally using. For the past three years supercenter chain Meijer has been working with Irvine, Calif.-based SmartReply to deliver voice messages about events such as its monthly one-day sale to its shoppers.
The messages typically feature a female voice identifying herself as an assistant store manager, and are meant to be friendly reminders from the consumer's local store, explains Dan Jones, v.p. of grocery development at SmartReply. "We only call households that have an existing relationship with the retail client." The voice messages are left on the customer's answering machine or delivered in an amended version if a live voice answers.
Some retailers have been resistant to the idea of voice marketing, in light of the bad rap telemarketing has received, notes Jones. But, he maintains, "This isn't telemarketing. Effective voice marketing is really different."
SmartReply's messages have increased retailers' direct-mail response by 25 percent to 40 percent on average, according to Jones. "Calling in advance of direct mail is a big event. A lot of that can be manufacturer-sponsored, so you can drive people into the store at virtually no cost to the retailer."
SmartReply typically charges about 10 cents per call, and most retailers quickly achieve a return on investment, says Jones. "The response rates have been equally effective as direct mail, but far more efficient."
Clients can apply voice marketing in other, more personalized ways, adds Jones. "We can call a customer to remind them to get refills at the pharmacy -- we're completely HIPAA-compliant. We can call and wish a happy birthday to loyalty card members, when that information is available. We've also called to tell customers about local events such as flu shots, or even to alert them that there's road construction around the store and that they'll receive a discount in the store for going through the hassle to get there. Retailers can also use voice marketing to differentiate themselves from another retailer down the street. You can let them know, for example, that you have the best selection of organics in town."
These are the service-oriented types of messages that are most likely to make an impression on consumers. You can bet it will beat the hundreds of hair replacement e-mails they receive every year.