Scoring in-store requires more planning and cooperation than ever before. Unless you’ve got Produce Man on your side.
A well-executed in-store promotion is like a swan in water: Simple and serene above the surface, but paddling like mad beneath.
In-store campaigns have returned to relatively low-tech tactics, but with more sophisticated strategy than ever before. In the wake of the failure of high-tech gizmos from VideOcart to CompuCook kiosks, marketers are relying on old standbys like shelf-talkers and end-cap displays. At the same time, collaboration between retailers and manufacturers has grown increasingly complex.
Manufacturers competing for finite shelf space are paying more attention to what retailers want from in-store promotions. That has made data sharing a crucial step in setting in-store strategy. “Everyone has to think really hard before they take a step,” says Scott Taylor, group vp-sales and marketing for Wilton, CT-based Trade Dimensions.
The kind of data most useful to manufacturers and retailers – category-specific purchases, response to targeted promos, frequency of store visits, and market basket size – can be shared only if both parties identify mutual fields of interest and exchange their views frankly.
Some high-level collaboration is already occurring. Frito-Lay’s Right Fit micro-marketing program determines product mix on a store-by-store basis, using inventory and consumer purchasing data to set a store’s stock. Frito-Lay shares its data with partners such as A&P, Kroger, and Grand Union.
Wal-Mart shares specific store-by-store data with its vendors and establishes at the outset what it expects to gain from joint promos, says Laura Pope, spokeswoman for the Bentonville, AR, chain. Wal-Mart shares in-stock data, seasonal sales profiles, and warehouse alignment. Sharing data is the “keystone” of the chain’s supplier relationships, Pope says.
Pleasing each retailer is a keystone to in-store support. Account-specific campaigns have blossomed under this custom-fit mentality. Keebler Co., Elmhurst, IL, created an account-specific overlay to its Halloween promotion this year “to match our goals with the retailers’ strategies,” says director of market planning and promotion Mike Jurgensen. Impulse items like cookies and crackers thrive on displays. “They’re a gold mine for us,” Jurgenson says. “We have to make it happen in-store.”
Keebler’s Halloween sweeps gives away a trip to Hollywood for a private party with popular swing band Big Bad Voodoo Daddy. In-store support includes poles, four-sided displays, and end-cap hutches, the latter of which boosts Keebler sales 100 to 400 percent, Jurgenson says. A Sunday FSI carries a coupon that doubles as an entry form. Davidson Marketing, Chicago, handles. That media assortment has “proved the most effective mix for our national efforts,” says Jurgensen.
Keebler follows up later this fall with a Holiday of the Century in-pack game giving away $1 million. Instant-win prizes include gift cards (some in the form of Visa debit cards) in $1,000, $100, and $10 denominations, plus 35,000 free product coupons worth $3.29. Gage Marketing Group, Minneapolis, handles verification. Pole toppers, combo cards, holiday recipe dispensers, and four-sided lobby displays “create excitement, a certain wow factor,” Jurgensen says.
Marketers also are paying more attention to the whole store, not just their own aisle. “More marketers are thinking, `Will the incentive I offer attract shoppers in other sections of the store where retailers are building more volume?'” says Jon Kramer, president of J.Brown/LMC Group, Stamford, CT.
At the same time, retailers are weighing brands’ concerns, says Tim Hawkes, president of Westport, CT-based in-store marketing consultancy Trade Zone. Savvy retailers are hiring MBAs and packaged goods people to focus on what drives in-store marketing, which gives them brand-side insights that foster cooperation. Savvy marketers are taking advantage of that by consulting with grocers before setting in-store strategy.
Campbell Soup Co., Camden, NJ, identified a niche before launching its Chunky Baked Potato soups, then presented its plan to select retailers “to give them a rationale of how it would grow both category and brand sales,” says Kevin Tripp, Keebler’s director of consumer promotions.
“Brands have got to approach retailers with the attitude, `We’re here to help you plan the best promotion we can for your chains,'” advises Holly Roper, retail marketing manager at Promo Edge, the research arm of Neenah, WI-based P-O-P printer Menasha Corp. “They should allow retailers the widest choice of tools. They should say, `Here is what we think will work. This is why we’ve picked these components, [but] if you don’t agree, we’ll throw them out.'”
Dressing up
Low-tech doesn’t mean low-impact. “Shoppers want in-store entertainment, something spectacular,” says Roper.
Last spring, HEB Grocery Co., San Antonio, constructed the world’s largest banana display at its flagship store in conjunction with Westlake Village, CA-based Dole Food Co.’s fresh fruits division. The 21-ton display used 1,072 bananas, as well as inflatable bananas, floor stickers, yellow balloons, and vivid banners. “It was like a grand opening,” says Arnon Lansing, category produce manager for the grocer’s HEB Foodstores outlets.
The display was dismantled after two days, with the bananas doled out to local stores for smaller-scale promos. “The promo was great,” says Dole vp-marketing Rich Utchell. “Sales spiked between 50 to 75 percent.”
Then there are vegetables. The Produce for Better Health Foundation, Wilmington, DE, last spring staged a 5 A Day East Coast Tour in 16 cities to pitch the health benefits of veggies and fruits. (The tour was prompted by a Food Marketing Institute/Prevention Magazine study which found that 76 percent of consumers think getting health and nutrition information from grocers is an important retail sales service.) The tour stopped at chains including Winn-Dixie, Publix, Kroger, SuperValu, and Bi-Lo, where staffers gave pledge cards to shoppers who vowed to eat five servings of produce a day.
Signs, danglers, demos, and tastings drew attention, but nothing brought crowds like Produce Man, a seven-foot-tall costumed character composed of 104 fruits and vegetables. The Foundation gathered one million pledges and got more than 55,000 hits on its new Web site during the promo. Produce sales rose 13.8 percent during the last four weeks of the 12-week tour. The 5 A Day Across the USA West Coast Tour hit 18 cities this summer – with Produce Man in tow, naturally.
set-up hassles
The biggest hurdle for effective in-store execution is paying someone to put up P-O-P. While industry consolidation has brought fewer retail headquarters to deal with, store managers are still autonomous enough to keep P-O-P logistics complicated. Store operators don’t want to spend time or labor preparing in-store promos. In many cases, only half of P-O-P is set up on schedule, with the other half often getting thrown out for lack of room or staff to put it up. Third-party merchandisers continue to pick up the slack for downsized sales forces and retailers unwilling to assign their own staffers to set up displays.
Campbell’s used News America Merchandising, the Chicago-based arm of News America Marketing, to set up displays for Chunky Baked Potato’s spring launch. That cut Campbell’s execution time down to four weeks from an average of 13 to 18 weeks. “In-store displays are the volume-producing part of any in-store program, and they had to be in place in thousands of outlets,” says Tripp.
Campbell opted for shelf-talkers rather than more expensive sampling or end-cap displays. Many grocers think shelf-talkers are overused, but Campbell “felt something on-shelf would help shoppers locate the product a lot faster” among hundreds of soup varieties, Tripp explains. Shelf-talkers provide a modest sales lift of 12 to 15 percent – but are a lot cheaper than paying up to $10,000 for an end-cap display.
Manufacturers with direct-store delivery (DSD) such as Keebler use their own delivery staff to handle merchandising, and can easily customize displays to each store. Keebler’s 2,000 field staffers deployed Halloween displays in 10,000 stores in time to coincide with the scheduled FSI drop.
“We don’t ship P-O-P or shelf-talkers through customer warehouses, because that way we lack control in getting them on the shelf, and getting them on the shelf is an absolute priority,” says Jurgensen. Warehouse brokers too often operate in a one-size-fits-all fashion, without customizing displays for each retail chain.
“Warehouse brokers don’t investigate enough to find out which in-store media really fit the store,” says Promo Edge’s Roper. A pallet display for Wal-Mart won’t fit in Kmart, because each chain requires different sizes, for example.
Despite the disparities, retailers and manufacturers are finding more common ground on in-store promotions. “In the past, in-store efforts weren’t as satisfactory to manufacturers, because you had retailers controlling the process,” says Trade Zone’s Hawkes. “Every retailer speaks of getting the most value for himself, but they realize marketers have a part to play. They’re saying to marketers, `You create pull, and we’ll create push.'”
And Produce Man shall lead them.
How much has the grocery industry consolidated? The five largest food retailers account for 40 percent of all U.S. sales, according to a study by The Food Institute, the Fair Lawn, NJ-based trade association. That’s twice the share they had five years ago.
Since 1993, nine of the 20 largest food retailers have been acquired by competitors. There were more than 169 total acquisitions between 1994 and July 1999, according to Food Institute data.
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