Independent Grocers – 3 Ways to Gain a Trade Promotions Edge

NGA, LAS VEGAS – When it comes to capturing their fair share of impact from trade deals, independent grocers have long struggled to match their crosstown, big-chain rivals. Scale is a key challenge. The effort and resources required to identify, negotiate, accept, implement and publish a single promotion are the same, whether the execution is for 12 stores or 1,200.

Big chains may spread these tasks across more hands, but they also suffer from promotion practice logjams and disconnects that may tend to neutralize their advantage, due to versioning complexity, duplication of effort, review and rework.

Make the Effort-to-Benefit Ratio Work for You

The opportunity is open for smaller retailers – who are inherently more consolidated, nimble and fleet of foot – to gain an edge in the promotions game. It comes down to defining and enabling promotion practices that permit streamlining and collaboration across the enterprise. Independents should explore three areas of present opportunity:

  • Streamline and connect your processes. Neutralize the scale advantage by making promotion decisions faster and adopting disciplined executional processes that offset the differential effort. Use automation to reduce and simplify steps and ensure that correct information is in play across functional areas of your business. Harmony is enabled when you successfully align the creative process with the business decisions.
  • Collaborate within your enterprise. Structure your ad process for collaboration and design connectivity throughout the lifecycle of each promotion, from planning, to execution, to measurement. Establish a consistent workflow with roles defined, assigned and tracked.
  • Collaborate with your vendors. Establish a portal-based system that transfers responsibility to vendors to enter complete information about each offered deal and makes it better for them to do so. Online accuracy will make faxes, emails and paper forms a thing of the past. Negotiations and decisions will commence faster while minimizing the need for reviews, changes and reconciliations.

These trade promotion management capabilities are enabled by software solutions but rooted in best practice. They are quite readily available now, and adopting them can be far less disruptive than you might think, especially where web-based technology is available.

The right promotional tools and processes can enable independents to exploit their natural advantages to win with shoppers and capture a fair share of deal profits.

© Copyright 2014 James Tenser
(This article was originally commissioned by Aptaris LLC. Permalink. Republished here by permission. All other rights reserved.)

NRF Bulletin: Personalization Done Right

Lewis and McVie at NRF

I’VE BEEN ON RECORD many times as a hater of shopper loyalty, but an advocate of intelligent personalization.

I admit my position can be construed as mincing words, but I remain stubbornly committed to the distinction. When marketers and retailers try to ascribe loyalty to their card-carrying customers they are usually delusional. When they demonstrate their commitment to those customers through good acts – by providing relevant values and experiences – they embark on a golden path.

Supermarket chains so regularly miss this distinction with their frequent shopper card programs that it is a small revelation to encounter one who seems to have it right. In a presentation at the National Retail Federation Convention and Expo this week in New York, Loblaw Companies, Ltd., the leading grocery operator in Canada, shared some insights about its PC Plus shopper program, launched last May, that suggest it belongs in that exclusive tier.

“From our best customers we capture 55-60% of their share of wallet. That leaves so much opportunity just with them,” said Peter Lewis, Sr. Dir., Customer Analytics & Loyalty at Loblaw (pictured at left in the photo above, with Graeme McVie, VP and GM at LoyaltyOne.)

That’s an insightful way of looking at the return from a frequent shopper program that truly distinguishes highest-value relationships and cultivates them accordingly. Best shoppers deserve our best efforts because they are our best prospects too.

Loblaw has embraced this approach with PC Plus, its digitally-enabled frequent shopper program, said Lewis. On a year-over-year basis, enrolled customers who used the targeted offers changed their behaviors in desirable ways:

  • They increased their number of visits by 12%
  • Their average basket size increased by 5%
  • The number of categories they purchase increased by 7%

Lewis also shared some statistics from the first 6 weeks of the program that indicated rapid acceptance:

  • 40% of sales were made using the card
  • More than 6,000 members were signed per store
  • 50% email open rate
  • 35% click-through rate on those emails

PC Plus uses analytics to deliver relevant, highly personalized offers. With thousands of offers available across the store, the mix is tailored down to the individual level, based on each shopper’s history.

“How big is the prize from personalization?” said Graeme McVie of LoyaltyOne, the company which helps Loblaw implement and operate PC Plus. “Even with best customers, opportunities exist to grow share of spend.” He shared an analysis of the 50 store categories across the top 20% of customers, which indicated a 50-70% share of spending, a finding which underscores the present value of best shoppers, but also their upside potential.

PC Plus is increasingly focused on the smartphone app as the “control center” for the shopper, Lewis said. It allows them to manage shopping lists from their phones, informs them of available offers, and allows them to accept offers in real time, even while waiting in the checkout lane moments before a transaction.

McVie added that the design of PC Plus is oriented toward “democratizing shopper insights.” Its strategy is two-fold: understand the needs of individual customers and consistently execute actions to satisfy them.

I’ve stated previously in this blog that we are entering a “post-loyalty” era, but intelligent personalization is far from dead. In fact it may just be hitting its stride at Loblaw.

© Copyright 2014 James Tenser

Movin’ On Up

TENSER’S TIRADES HAS RELOCATED to this much finer neighborhood following a dispute with the old landlord.

You’ll find the entire blog (past and present) here, along with some useful new features.

If you subscribe to our RSS feed, you can update it using the link you will find at right.

Jamie Tenser

© Copyright 2012 James Tenser

Wrestling With Markdowns?
This Webinar Can Help

FOR SOFTLINES MERCHANTS, end-of-season markdowns are a necessary evil that clears the racks and frees cash, but too often margins are sacrificed in the process. A markdown analytics solution can bring vast improvements to these activities, resulting in markdowns that are fewer, better timed, and less deep.

Our friends at IBM DemandTec have teamed with Deloitte to offer a webinar geared especially for softlines retailers, which explores how integrating in-season (promotions) and end-of season (clearance) pricing decisions can reduce the amount of excess inventory that has to be heavily marked down at the end of each season.

Learn how these decisions can be optimized and implemented at the store and item level, ensuring greater shopper success and business performance. To register and attend this free webinar, click the banner below.

Markdowns in Softlines: Are you cutting your cloth too late?

Webinar Date: Nov. 7, 2012
Time: 8 am Pacific/11 am Eastern
Featured speaker: Chris Goodin, Principal Deloitte Consulting

© Copyright 2012 James Tenser
(This article was commissioned by IBM, which is granted the right of republication. All other rights reserved.)
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