Retailers are taking their marketing messages to a host of advertising vehicles beyond print, including social media and digital signage.
The Times they are a changin’—literally.
In June the Pulitzer Prize-winning Times-Picayune, based in New Orleans, made front page news of its own when officials announced that after 175 years it was changing from a daily newspaper to publishing three days a week. That did not sit lightly with officials of Robért Resources, who use the paper to advertise their three Robért Fresh Market and one Lakeview Grocery Co. stores. The retailer currently advertisers on Thursdays, when its sales break, and executives at the Times-Picayune suggested moving the ads to Wednesdays. Robért officials were so outraged they signed a petition to keep the presses rolling seven days a week.
“We feel that in New Orleans people pick up the paper,” says Marcelle Robért, marketing manager of the New Orleans-based retailer. “A lot of people shop the sales, but there are a lot of people who just want to look at the advertisements. It is our way of keeping ourselves relevant. We feel it helps us a lot. We get a lot of traffic from the newspaper; otherwise we wouldn’t address the majority of our advertising budget into it.”
Plus, there are logistical issues.
“We would have to change our whole billing structure because our payroll structure is based on our sales schedule, as are our weekly sales records,” Robért says.
Nonetheless, the company is exploring moving its ads to Sundays and is also looking at other options such as digital and grassroots efforts. “We are spending some money working on our website,” Robért says. “We are also extending our social media budget, but newspapers ultimately are where our customers are and there has not been much progression in our customer base.”
Retailers in other parts of the country are also struggling with declining newspaper circulation. In Utica, N.Y., the Utica Observer-Dispatch still publishes daily, but circulation has plummeted in concert with the city’s population. “The circulation is going down and we were paying the same price because we were under contract,” says Bill Chanatry, CEO and owner of the one-unit independent Chanatry’s Market. “We finally broke that yoke and after years of being run-of-press we’ve gone to inserts. It is inserted with the newspaper and is working pretty good.”
Chanatry’s is also stepping up its internet and social media marketing, especially as it marks its 100th anniversary this year. “We are taking people’s emails and sending them a coupon for free cases of soda and other free different items,” says Mark Chanatry, president. “If they log on certain days they will get a coupon for a free item if they come into the store. We are trying to make it different by making them have to log on to see what they are getting, as opposed to knowing what they are getting.”
West Valley City, Utah-based Harmons is taking even more drastic steps. As of July 9, the chain was no longer mailing out circulars for its St. George, Utah store, located about 250 miles south of Salt Lake City. “If you are 40 years old or younger you are not even reading the paper, so we are going to move it all electronic,” says Bob Harmon, vice president for the customer.
The chain is examining digital options, including electronic billboards.
“You can put eight ads on an electronic billboard and if you are at a stoplight it changes every three seconds,” Harmon says. “People will look at that because it is entertaining.”
Harmons is also going the social networking route, Harmon says. “We are using our website, and have a tremendous app that does a whole range of personalization: Prescription refills, shopping lists, receipts. You can actually make it yours. That is what people want.”
That is a smart move, say some industry observers.
“A lot of traditional marketing in the old days was marketing ‘to,’ and essentially now we are living in a world of marketing ‘with,’” says Dan Flint, Ph.D., Proffitt’s, Inc. professor of marketing, Shopper Market Forum, at the University of Tennessee-Knoxville. “I tell grocers that you are really in a conversation with shoppers. You are not trying to pitch anything to them. Those days are long gone. If you are pitching something to them you might as well compete on price alone. That gets rather boring and is a downward spiral that never ends.”
Flocking to social networks
Flint sees a bigger portion of advertising dollars shifting to social media. “Collectively we tap into social media by getting involved in the type of lifestyle activities that our shoppers are involved in,” he says. “It is more around education and solving shopping problems. How do I make it easier for the shopper to find the products he or she wants to solve their life problems? Shopping is a chore to most people, so you have to make it as pleasant and experiential as possible.”
“When you compare supermarkets to other industries, they are spending the second highest amount of resources and budget on social media, after radio stations,” says Eileen Smith, program manager at IDC, a research company based in Framingham, Mass.
“Interestingly, the CPG companies are not moving their budgets that way as much,” Smith says. “It seems to be a disconnect, maybe because [CPG companies] are relying so much more on the retail channel to touch the consumer for them.”
Change is coming, albeit slowly, observers say. “Digital and mobile have made tremendous inroads in a lot of different industries, but for CPG companies and supermarket retailers we are somewhat still challenged,” says Lauren DeSimone, senior vice president, strategy, innovation and growth in the Wilton, Conn. office of Jacksonville, Fla.-based Acosta Marketing Group. She says that is because somewhere between the car door and the supermarket door the shopper reverts to paper lists and buying many of the same brands and categories that her mother bought before her.
“So there is a big challenge for CPG retailers and brands in importing, embracing and activating digital technology the way apparel, automotive and electronic manufacturers have been able to do so, along with retailers in other channels,” DeSimone says.
According to Acosta’s semi-annual The Why Behind the Buy report, shoppers still overwhelmingly prefer weekly circulars. “Eighty-three percent of shoppers are still influenced by the store circular and flyer, yet we know digital plays a critical role in her planning process,” DeSimone says. “A lot of the digital focus is around list creation, but she is still printing it out. She is not exporting it or transferring it to her smartphone and shopping from her smartphone. She is shopping with a paper list.”
According to the 2012 Brick Meets Click report from Willard Bishop Consulting, more than 80% of shoppers find printed circulars helpful, while 69% find online circulars helpful and 62% see benefits in promotional e-mails. “What is very interesting is that the high rating is consistent for young shoppers as well as older shoppers,” says Bill Bishop, chairman of the Barrington, Ill.-based firm.
Grocery shoppers are using their smartphones for a wide range of activities while in the store, according to Brick Meets Click, but only about 20% of shoppers have a grocery app on their phone.
United Supermarkets is working to raise that average. The Lubbock, Texas-based chain has introduced apps to its shoppers in West Texas and greater Dallas/Ft. Worth where it operates under the Market Street banner and offers a Smart Rewards loyalty card.
“Both of our apps will continue to evolve,” says Jennifer Nanz, United’s digital media manager. “We’d like to add more features as time goes on as our apps mimic our website in functionality. With our apps shoppers can access our weekly ad, build their shopping list, access recipes, and for our DFW guests access their Smart Rewards Points.”
Next up is an app for the pharmacy department. “With that guests could actually refill their prescriptions through the app by either scanning the barcode on their prescription or by browsing through their history and selecting a specific prescription,” Nanz says. “Then it would be refilled at their selected pharmacy and send them a status notification when it is available for pick-up as well as a reminder when it is time for a refill.”
United still offers print ads for shoppers who prefer them, but more are transitioning to the electronic versions. “If our guests go on our website and sign up and create an online account they gain access to our ad one day earlier than our print ad,” Nanz says.
Seeing a supermarket app on their phones will remind shoppers about their favorite supermarkets, but seeing it day-in and day-out on a home refrigerator really drives home the message. That is exactly what officials at Refrigerator Media Advertising are doing with their patented Refrigerator Savings Magnet Mailer, an eight-week chronologically released coupon mailer. It is two pages with four coupons per week, printed on perforated 10-point coated stock that is mailed to the consumer’s home and placed on their refrigerator via the magnet on the back.
“It has proven to be effective and continues to drive traffic and increase store sales for the entire eight weeks,” says Vickie Johnson, vice president, sales and marketing, for the Spring Park, Minn.-based firm. “Sometimes week eight does better than weeks four and five.”
Johnson says FSIs average less than 1% redemption, while Refrigerator Savings Magnet Mailers get 6% to 13%. “Retailers have been reporting a 10% lift in store sales while our program is running,” she says. “Our mailer is on the refrigerator 24/7. You don’t lose it. The average family opens the refrigerator 20 to 30 times per day, and you can look ahead and see what is coming up through week eight.”
Consumers are finding it easier to stock that home freezer thanks to Cool-Ads, the division of Deer Park, Ill.-based Wild August that is bringing in-store advertising to the freezer case with its innovative door handle ads.
Cool-Ad is a retrofittable unit that connects to the existing cooler door handle, including full-length ones. “The concept is that on this handle you can put advertising,” says Larry English, CEO. “It is very clean and looks good when you are scanning down the aisle. It is attention getting and psychologically the consumer will be drawn to make a purchase of the advertised item. It is also great for cross-merchandising. An ad near the frozen french fries stating ‘Don’t forget the Heinz ketchup’ is very effective.”
THE GROCERY GURU
Do not turn to the obituary pages looking for the future of newspaper advertising. In fact, the medium is alive and well—at least in Salt Lake City. Just ask the Grocery Guru, a.k.a. Ken Roesbery.
Roesbery works as the “Grocery Guru”/grocery expert for Media One of Utah, the Salt Lake City-based joint advertising agency servicing The Salt Lake Tribune and Deseret News newspapers. His job is to conduct seminars and lead supermarket tours showing shoppers how they can save money using newspaper coupons.
“I will write 6,000 to 7,000 subscriptions to the newspapers every year and they find my retention rate is much higher than anybody else’s because I am teaching people that the newspaper pays you to have a subscription with the coupon savings,” Roesbery tells Grocery Headquarters.
He works with church groups, civic groups and company parties. “I bring a bunch of groceries and hand them out while I am showing what the deals are for that particular week. If you buy what is on sale you will save an average of 40%, and with coupons you can save up to an additional 30%, making it a 70% savings.”
Individual consumers can register for Roesbery’s classes online and pay a $10 fee to learn how to use the newspaper to save money. Working in conjunction with the stores, he conducts group store tours, walking shoppers down each aisle showing them how to build their meals around weekly specials and sale items. Store management makes sure that there are enough sale items on hand for all of his students. Roesbery then talks them into buying subscriptions to the two newspapers for the coupon savings. “What that has done is that at the Deseret News subscriptions are going up,” Roesbery says. “The Tribune was up but is just slightly down, so we are bucking the national trend.”
The program has expanded to include Macy’s and Kohl’s, which run $10 coupons in the paper. “Currently Smith’s is offering $2.00 off on gasoline, making it $1.34 a gallon, simply by buying a Macy’s, Kohl’s or other department store gift card at their store,” Roesbery says.
He tells his students that supermarkets like coupons.
“What people don’t understand is the stores get an extra 8 cents for each coupon redeemed,” Roesbery says. “It doesn’t sound like a lot, but it adds up. When I bring groups of people through it is good business for them.”
Roesbery has become a legend in the Beehive State, hosting an hour Saturday morning radio program and appearing every Monday morning on the local CBS affiliate. “Some of the other newspapers here in Utah have caught on,” Roesbery says. “The Ogden Standard-Examiner and Provo Daily Herald have now hired their own grocery experts. They can see what is happening here.”