The Perils of Incrementalism: A New White Paper from Green Hills’ CART

Retailers’ marketing programs, such as temporary price reductions (TPRs), managers’ specials, continuity programs, loyalty programs, clubs, direct mailers, and fuel programs (to name a few), have all steadily increased retailers’ marketing costs. But to what effect?

This is a question community-based independent Green Hills seeks to answer in the latest white paper from its Center for Advanced Retail Technology. “Retail executives fear to drop longtime marketing programs because of the incremental gain they once provided,” said Gary Hawkins, CEO of Syracuse, N.Y.-based Green Hills as well as retail technology consultancy Hawkins Strategic. “By doing so, they steadily increase their marketing costs over time — and render themselves vulnerable to 3.0 Retailers aggressively adopting transformative technologies driven by an understanding of customer behavior.”

According to Hawkins, what happens is that non-participating shoppers actually decline in spending, while participating shoppers drive temporary sales increases that quickly plateau. Yet retailers fear losing this incremental gain the programs drove. Retail 3.0, the new concept of retailing developed by Hawkins, is about taking a transformative approach, and making digital, personalized offer communication a centerpiece of retailers’ go-to-market strategies.

The white paper, “The Perils of Incrementalism,” explores how this concept has found its way into grocery operations, how it affects fuel programs and fixed marketing costs, and how to leverage digital technology to get the most from marketing dollars.

The paper is the fifth in a series that also includes Shopper Data, Marketing Communications, In-Store Activity and the Retail 3.0 Organization. To download the full white paper, visit www.hawkinsstrategic.com.