Procter & Gamble lent its branding muscle to Family Dollar stores for an image makeover touting “Big Brands. Small Prices,” putting Family Dollar’s brand at the fore. P&G’s “Relax, Renew, Revive” displays give Stop & Shop’s HBC and pharmacy a consistent, customized look. Nestlé’s Purina division designs pet food aisle displays and signage that build the grocers’ image — without Purina branding.
Packaged goods marketers have gotten good at department makeovers as part of their category management programs. Their next task: Spiffing up center-store.
Savvy retailers — think Starbucks and Sephora, Apple and Barnes & Noble — have raised consumers’ expectations of in-store environments across all classes of trade. “The same people that go to Starbucks go to the grocery store, with heightened expectations,” says Upshot President Brian Kristofek. That has prompted grocers to upgrade their perimeter departments, and has brought CPG brands out of the aisles in search of high-traffic secondary displays. Safeway Stores’ “Lifestyle” format, launched in 2004 and now in about 440 stores, spiffed up perimeters (including bakeries, floral design, sushi bars and olive bars in some stores) and added tables to display complementary dry grocery goods. Endcap displays cross-merchandise companion products (such as baking ingredients) outside the aisle.
Now retailers are starting to think beyond perimeter makeovers, tackling “aisle reinvention” to reinvigorate center-store in its own right. Some departments — baby aisles, pet care, HBC and cosmetics — have been revamped widely by CPG category captains to boost overall department sales (and, mostly, their own top-brand sales).
Grocers want CPGs’ help to create center-store “vignettes” similar to department store displays to showcase brands within whole categories, says Cannondale Associates Partner Ken Harris. He points to curvy, upscale cookie displays from Pepperidge Farm, and Campbell Soup Co.’s IQ shelving as first steps. But retailers have to take charge of in-store makeovers: “If they let manufacturers rule the roost, it would be a jumble of incohesive parts, like Frankenstein sewn together,” Harris says.
Research that tracks shoppers’ paths — around the perimeter, with fewer forays into center-store aisles (July 2005 PROMO) — has made retailers hungry for compelling P-O-P to prompt browsing in center-store aisles. Grocers rely on manufacturers for shopper-friendly displays that pull shoppers into the aisles. But too much P-O-P overwhelms shoppers — and disparate displays from manufacturers can obscure a retailer’s own brand.
“Few companies are willing to produce signage without their name on it,” says John Rand, senior analyst with retail consultancy Management Ventures Inc., Boston. So far, only a handful have, including Nestlé Purina, P&G, Clorox Co. and Kraft Foods.
Purina’s category development and sales reps work with retailers to develop a customized plan that: optimizes product assortment; improves aisle flow and adjacencies; addresses competitive and format pricing issues; focuses on building store loyalty by leveraging their point of difference; and leverages the emotional bond between people and their pets. “Our goal is to make people feel good about the pet aisle…for example, [by] incorporating photos of people interacting with their pets both in the aisle and in the weekly ads,” says Paul Cooke, Purina VP-director of industry development. “Also a dedicated pet care endcap helps to identify the pet aisle and direct those ‘skippers’ back down the aisle.”
Purina has worked in all channels and helped hundreds of retailers nationally, and “the category has seen continuous growth for many years,” Cooke adds.
The strategy supports Purina’s portfolio management: Since grocery accounts for a higher percentage of Purina sales, the manufacturer is motivated to drive aisle traffic for grocers, Rand says.
Last year, P&G funded a TV, print and in-store campaign for Family Dollar after P&G’s research showed that consumers didn’t know Family Dollar carries national brands. Ads showcased P&G products while delivering Family Dollar’s “Big Brands. Small Prices” brand message, which also appeared on signage, bags, even staffers’ aprons. P&G’s customer marketing team brought the idea (and funds) to Family Dollar after P&G’s dollar-store research showed that “national brands have huge perceived value among consumers in that channel,” Kristofek says. P&G paid for the research and campaign — handled by Chicago-based Upshot — but Family Dollar paid for additional TV spots featuring non-P&G brands.
Retailers draw the blueprints
Kristofek contends that retailers should take charge, and can mirror manufacturers’ “collaborative marketing” strategy that uses CPGs’ data and ideas in-store. He calls it “reverse collaborative marketing,” with retailers coordinating efforts between manufacturers — with an assist, he hopes, from a promotion agency with retail expertise.
“If P&G can reinvent the household needs department, why can’t retailers apply that thinking to the whole store? … It’s easy to get CPGs to pay the working dollars [that fund programs], but who will pay for the thought leadership?” Kristofek posits. Grocers such as Safeway, Albertson’s and Ahold have enough national scope to afford the investment, he says.
It’s starting to happen outside grocery. Petco Animal Supplies held the reins on its “Pisces” reformatting that put fish tanks center stage in the center-store. The strategy: Entice families with an entry-level pet, then build up to dogs, cats and more involved pets around the store’s race track. “The big emphasis is on entry-level pet acquisition,” Harris says. Petco asked for manufacturers’ help in departments, but managed the project itself. San Diego-based Petco remodeled 49 stores in 2005.
On the flip side, Toys ‘R’ Us and Target Stores each gave manufacturers sections to design.
“It pit manufacturers against each other, and they got some creative solutions,” Harris says. Toys ‘R’ Us — whose stores are a jumble of brands anyway — gave manufacturers a lot of leeway; Target, on the other hand, imposed strict parameters to keep its distinctive look consistent, Harris adds.
A few retailers have floated RFPs for shopper-based research, a small first step in taking charge of center-store upgrades. Meanwhile, CPGs with ideas to make the entire center-store more shopper-friendly will find an eager audience.
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